INCREDIBLE INDIA 2.

0
SYNERGIES FOR GROWTH AND GOVERNANCE

INTRODUCTION
INDIA’S JOURNEY FROM LOWER-MIDDLEINCOME TO UPPER-MIDDLE INCOME

Introduction

5th – 6th largest economy but income per capita (PPP) is $6430 (CHN is at 15,308). In 1990,
India was at 1754, CHN at 1526.

The goals in front of India is clear- we need to transition towards a $5T economy, taking us
from lower per capita income to middle income.

The path of this transition [into a highly competitive, efficient economy with social equity] is
to be paved with reforms.

Competitiveness = micro level + macro level

Micro level= business envt. + regional development + sophistication of company operations
Macro level= monetary and fiscal policies + human devpt. + public instns
Recently, we have had good macro-level comp. factors (as stable inflation, deficit, etc.).
Now, focus on firm level competitiveness.

Agriculture

One cannot talk of transforming India without transforming agriculture sector first. We need
to move from agriculture to robust agri-business systems, whilst maintaining our food
security and income security for farmers.

Productivity needs to be enhanced, and at the same time, we need to ensure input use
efficiency to lower costs of production.

Developing aggregation centres, pack-houses and markets close to the farmgate in

partnership with private sector is the way forward.

Gradually, we need towards a unified, real-time national market for farmers, enabling them
to get the best price for their produce.

Need to reduce dependency of the population on agri as a source of livelihood- 43% of

labour force is involved in agri. Mfg (esp. labour intensive export-led growth of this sector),
then, becomes imp. – companies need to become globally competitive.  rationalize
electricity tariffs, labour and land laws

Industries

Industries of the future (Industries 4.0) need to be mainstreamed in India

Adoption and application of AI, IoT and blockchain (key drivers of transition) is heavily dep
on innovation and entrepreneurship  Atal Innovation Mission (AIM)
Infrastructure- key for competitiveness

Roads, airports, etc.  have picked up

Improvement needed  regional distri, e.g. NE needs more; inland waterways need to be
tapped into.

More infra = lesser costs of transportation costs + fillip to construction sector (high
employment sector- absorb labour from agri)

Cities: Aspirational Districts

The economic centre of gravity is increasingly shifting towards cities. According to Michael
Porter, regions tend to be the most important economic unit for competitiveness.

By 2030, > 600M will live in cities

Cities are drivers of growth, innovation and job creation. Innovation, job creation and
sustainable urbanization hold the key to India’s future.

Thus, strategise around cities to address regional disparities. And use technology to recycle
water, convert waste into energy and embed our cities with public transportation.

Aspirational Districts Programme:

The Aspirational District programme is a giant leap towards transforming India. It identified
115 of the most backwards districts and makes them compete on a real-time basis on 49
indicators cutting across edu, health, nutrition, skill development, infra, agri.

The programme ranks the districts with the objective of making them the best performing
districts of their states in 3 years and of India in 5 years’ time.

Coal Sector

Opening up the coal sector for commercial mining, along with enhancing domestic oil and
gas production and exploration, will also go a long way towards reducing India’s
dependence on the import of fossil fuels. In allocating these blocks, the focus shld be on
production, rather than revenue maximization.

India must also continue its thrust towards renewable energy, esp. in storage and batteries.
Will help to popularise electric mobility.

Future of Mobility
Need to revolutionise mobility, esp. shared mobility- imp. as economic gravity shifts
towards urban areas. Shared mobility is a sunrise area and India create size and scale to
become mfrer of electric vehicles and batteries.

How? Shift from internal combustion engines to electric vehicles, esp. in 2-, 3-wheelers, bus.

Social Development
Connection between economic and economic development is symbiotic.

We need to also focus on health, nutrition and education outcomes- we cannot achieve 9-
10% growth without transforming our human capital. E.g. labour out of agri needs to be
skilled to be absorbed.
 PART I
GOVERNANCE
Chapter 1: Lateral Induction and Cross-Mobility Will Bring a Fresh Perspective

Context: Recently, GoI declared opening 10 JS level positions as lateral entries. (out of 450+
JS level positions)
Earlier inductions: Vijay Kelkar, Montek Singh Ahluwalia, RV Shahi

Why?
1. Devpt  need for reforms  specific complexities + reqts. For Addnal thought
leadership at policy and implementation stages

2. First step towards a broad-based institutionalization of a wider and deeper talent

pool focusing on specific skill sets that fill the existing absence of talent in the govt.,
tailored to the particular sector enhanced by the industry-specific work experience
that the lateral entry admissions will possess.

3. Opportunity to attract and retain the best from across the world having a sector
perspective.

4. “Civil servants, together with fresh inputs form lateral entrants, can provide synergies
to policy and implementation like never before.”

How?
1. The process must be transparent, objective and entirely merit-based.
2. UPSC is time-tested to select them
3. Civil servants will have to help the entrants climb the steep learning curve. LBSNAA
can also help.

Synergies and Cross-Mobility:

- Also, imperative to allow civil servants and govt. officials to be placed in private
sector for 3-5 years  for well-rounded experience and specialisations.
- “Cross-mobility will provide the ultimate synergy”

NITI Aayog Experience with late entrants has been great

Way Forward

This forward-thinking move by the government sets the ball rolling towards congenial
competition based on merit on both the private and the public side. A free flowing of
exposure and opportunity will be the difference in integrating progressive reforms across
the board, as India motors towards a New India in 2022.
Chapter 2: India’s Quiet Administrative Reforms

Introduction

There have been 2 ARCs- 1996 and 2005 and both have submitted vast number of
recommendations- most of which remain unimplemented.

Last Three years:

- Outcome-based monitoring of schemes
- Fast-tracking of projects at the highest levels
- Creating a sense of competition among states and cities and ranking them
- Breaking silos between ministries
- Lateral entries

Four key reforms

1. Shift in administrative focus from inputs and outputs to outcomes that are reviewed
and monitored by PM personally.
a. With focus on creating a citizen-centric and participatory model of governance,
moving to an outcome-based system is a natural first step.
b. For 1st time, an outcome-based budget prepared by NITI Aayog was presented to
the Parl along with the main budget.
c. Sophisticated dashboards created for regular monitoring of projects and periodic
updates
d. Outcome-based reviews have a broad sweep- 15 infra and social sectors have
been reviewed, covering 72% of the total budget outlay.
2. PRAGATI (Pro-Active Governance and Timely Implementation)
a. Initiative where key infra and social sector projects that are facing
implementation bottlenecks or are delayed, are being taken up for discussion
and review at PM level
b. Forum for all stakeholders to voice their views and resolve issues, assign clear
responsibilities to officials and strict timelines.
c. Break walls between govt agencies
3. Creation of immense sense of competitive spirit amongst states and cities by ranking
them and selecting them for challenge through a challenge method.
E.g. EoDB index for states, ranking in terms of cleanliness, selection of cities for
Smart Cities Project
4. Formation of GoSs (supported by similar GoJSs) to break silos, stimulate thinking and
develop a roadmap for growth with commitment of all stakeholders.
Chapter 3: NITI Aayog as an Agent of India’s Transformation

Mandate:
a. Reimagine devpt. agenda- e. As platform for resoln of cross-
dismantle old central planning. sectoral issues (centre+ states)
b. Fostering cooperative federalism f. Capacity-building
c. National consensus devptal goals g. Act as a knowledge +innovation
d. Redefine reform agenda hub

Did NITI-A live up to its mandate? My answer- YES

1. Federalism:
a. Coopve + compve fedsm- firmly entrenched by NITI in planning landscape. Major
policy processes have been preceded by consultation in different for fora. e.g. 28
umbrella schemes have been rationalized based on such recommendations.
b. Innovative schemes launched (based on centre-state partnership):
i. SATH Sustainable Action for Transforming Initiating transformation in edu+
Human Capital health by hand-holding the states
ii. DSSS Developing Support Services to States Infra devpt.
iii. Aspirational Districts
iv. PPP in distt. hospitals in Tier II/III for treatment of some non-communicable process
v. EBSB Ek Bharat To make country united, strong and promote excellence
Shreshtha Bharat in all walks of life through long-term inter-state
engagements in cultural exchanges and education
c. Instead of Planning Commission methodology of fund allocation, outcome-based
ranking as a nudge for healthy competition between states
d. States assisted in critical areas, HD Report, reforms, law consolidation, resoln of
issues with centre
2. Productive efficiency: Enabled strengthening PSUs’ performance through strategic
disinvest. Of >30 CPSEs
3. Balanced regional Development:
a. roadmap for new industrial policy for NE and Himalayan states
b. Unique ex. of holistic and SD of 10 islands (+constituted IDA- Island Devpt. Agncy)
c. GIS-based planning in all states + UTs
4. Health and Education: Medical Council Bill, National Nutrition Strategy, prepd by NITI
5. Governance:
a. Paradigm shift from outlays to outcome-based governance  institutionalizing
monitoring outcomes of schemes
b. Stakeholder consultation + expert advice:
i. SAMAVESH: 34 knowledge and research instns’ MoU with NITI to share
knowledge and linking policy with practice
ii. NITI Lectures iii. Champions of Change- young professionals make recom.
6. Entrepreneurial ecosystem: AIM, Atal Tinkering Labs (ATLs)(in schools), Atal
Incubation Centres (start-ups)
7. Technology and Digital Payts.
8. Clean mobility solns in smart cities
9. Adoption of AI, Blockchain in good governance
Chapter 4: The Technological Leapfrog of Governance: How Technology is Driving
Efficiency and Effectiveness in Government

In the last few years, governance in India across sectors has been redefined through
business process re-engineering, technology and data analytics
In coming years- new culture ML, AI, etc.

How technology has brought better efficiency?

1. Combining unique biometrics identifiers and financial inclusion for effectiveness in
social benefits and reduce inclusion error.
DBT implemented in 437 schemes and ₹83k crore saved till date.
2.75 cr ration cards deleted; 3.85 cr LPG subsidy consumers eliminated.
2. Public Financial Management System (PFMS)  creation of a financial management
platform for all plan schemes, a database for all recipient agencies, integration of
state treasurers and tracking of fund flow to the lowest tier of implementation on
real-time basis
3. Digitisation  lower cost of collecting direct taxes (98.5% of income tax filed online)
4. UPI and BBPS (Bharat Bill Payments System)  triggered a plethora of private-sector
innovated apps that eased cz’ payt towards services by govt.
5. Bhim UPI – easy digital payts.
6. GST 50% (3.4M) inc in unique indirect taxpayers  radical formalization of Indian
economy

2017  4% of GDP from digital prods and services created using AI, IoT, Cloud
2035  (Acc to Accenture) AI can add 15% of current GVA to Indian economy

NITI
a. trying to implement AI solns to improve crop productivity and soil health using
remote sensing images and other data available
b. exploring inception of a natural language processing platform
c. trying to build a ‘biobank’- radiological and pathological images
d. Blockchain based smart contracts  reduce litigations and land registry
e. Drug authenticity project (as 255 of domestic drugs are fake)

Modicare linked with Aadhar

India has a billion biometric on Aadhar. We have a unique opportunity to leverage our
public identities to have many applications on the blockchain architecture.
Chapter 5: NewSpace Technologies for a New India

1960s: launch of a sounding rocket (Nike-Apache) supplied by NASA.

Today: In top 4 countries in space exploration and capability
a. Indigenously designed and developed IRS (Indian Remote Sensing) and INSAT (Indian
National Satellite System) satellite series have been operating in the entire Asia-
Pacific region, offering communication and imagery services in multiple resolns,
bands and swaths to cater to a wide user base in India and its neighbourhood.
b. Recent successes: Chandrayaan-1, Mangalyaan, IRNSS or NaViC programme, ASAT
capability development and sig design improvements in LVs and Earth-based
processing analytics.

What was once curiosity for scientists has become cash for business. Space-based systems
provide services to civil society and national security. E.g. US’ Air Force Space Command,
India’s Defence Space Agency and Defence Space Research Orgn; Elon Musk’s SpaceX
(reduced cost of launching to 1/4th of NASA), Bezos’s Blue Origin Programme is introducing
Reusable LVs and visualizing offshoring production into space/ moon to leverage the
benefits of ZERO power cost.

These space applications can be broadly classified into:

1. Communications and Entertainment}
2. Imagery and Analytics
3. Position Navigation and Timing Services
(1) + (2)- successful; (3)- with the commissioning of IRNSS India, we join a select league of
nations with their own space-based positioning and navigational systems—imp. for national
security.

We are in NewSpace era/ Next Space era. Subsequent developments can be called ‘New
Space after Next’ and then ‘NextGen Space’. Overarching elements driving innovations in
the space sector are the key opportunities in national security and science objectives- the
expansion of downstream space applications with new-use cases developing every day in
the pursuit of exploration and exploitation of space.

Entrance of private players, esp. from Internet economy, into Space economy. The key
technologies driving the business are newer and sustained:
1. Access to Space: now available for space tourism; e.g. Virgin Galactic and SpaceX;
key enabler= replacement of expendable LVs with reusable LVs + smaller size of sats
2. opening of 5G communications technologies: Backwards areas can get internet only
through satellites. Tradnally, stable geostationary satellites; new dynamics within
the market are expected to be provided by low-flying small satellite constellations.
E.g. OneWeb is building ‘world’s first global communications network in space that
will deliver high throughput, high-speed services capable of connecting everywhere,
to everyone’.
3. Higher resolution and revisit rates for Earth Observation: A huge portfolio of active
and passive sensors are already in operation- optical, infrared and radar regions of
the electromagnetic spectrum. Smarter sensors like LiDAR and I-SAR are in the
 offing. Nations and economies today are developing new-use cases for a variety of
applications in security, services and industry.
4. Developing faster and more accurate Positioning Timing and Navigation: Space-
based Synthetic Aperture Radars able to detect ships and crafts that have ‘gone
silent’, and become dark vessels  help beat sanctions, do illegal fishing and
poaching, illegal human trafficking, drugs, etc.—all of which have downstream effect
on national security; role of GNSS
Space Economy in Blue Economy- ability of sats for Dark Vessel detection, Oil Spill
monitoring, IUU (Illegal, Unreported and unregulated) Fishing, iceberg monitoring,
pollution and erosion of coastal regions, etc.
5. Space Exploration and Human Flight and Cybersecurity/ Data Science:

Use cases being promoted:

1. National Security
2. Commercial
3. Farm sectors: Sats can
a. monitor crop health and forecast crop yields with timely sub-meter imagery
b. detect and identify pest augmentation and plan irrigation levels to augment
precision agri techniques; monitor soil moisture and irrigation- save water (imp.
as water is subsidized)- intro water-dynamic water pricing, assist in crop
selection, market intelligence and access
c. (not in book)- think in terms of beneficial in new market created by the farm bills
4. Fisheries sector: SDG 14= restore fish stocks to sustainable level
a. Sat to locate potential fish zones, find asymmetries and help SDG 14
b. Sat synthetic aperture radar (SAR) sys- can detect offshore vessels-all weather
5. Early warnings on refugee movements and infra devpt in conflict areas
6. Monitoring oil, gas and pipeline for storage, volms, pilferage, etc.
7. Digital Elevation Models (DEMs) in mining sector, water-scarce areas, flood-prone
areas

Cybersecurity + space security = cyberspace

Chapter 6: DRDO Spearheads Transformation

Recent moves:
a. Technology Development Fund
b. Opened test labs and test centres to private sector use
c. Private sector can license from DRDO a host of military and dual-use technologies

What can we ask DRDO to do?

1. Achieve and retain technological asymmetry

Sail and wooden hulls + spears, swords and shields  steam and steel + cannons and
guns (Industry 1.0)  electric power, sensors, commns (Industry 2.0)  Digital tech
 Industry 4.0- new basket of disruptive technologies that can create asymmetries:
a. Military surveillance and communications:
i. Surveillance: Terahertz electronics, nano- technology, smart materials
and bio-computational and quantum computing techniques on the one
hand, and with miniaturization and MEMS-based sensors on the other,
together combined with ML/ assd. Intelligence algorithms and IoE
ii. Commns: high-output, secure and encrypted sat commns, big data
analytics, ML and robotics and cloud is the future. DRDO has high
competence in developing BC and AI tech for encrypted commns.

b. Advanced materials comprising ultra-powerful, ultra-light, ultra-conductive man-

made metals, that can combine to create meta-materials, polymers, alloys and
composites  revolnary refinements in add.ve mfg. using 3D P  create
asymmetries. Thus, DRDO is working Carbon Nano-Tubes (CNT) and graphene.
c. Autonomous vehicles, leveraging new innovations in robotics, automation and
miniaturization and AI- transfer risk from soldiers to machines. Can also be used
in road transport, etc.
d. Transformational energy and storage systems: have applications in submarines;
rapidly evolving propulsion tech (can render gas and diesel obsolete). DRDO shld
work on post-Li ion battery generation- dual use, lighter wt., fast recharging, etc.

2. Review role in national devpt narrative by identifying its ‘new’ core business.
Focus on fund research (not applied research and system integration) to
manufacture ahead-of-the-art defence products. Research based to be based on:
a. Sound knowledge and pushing frontiers of sc. knowledge
b. Design and engg. design i.e. integration of sc. knowledge
c. Technology solns i.e. integrate engg. knowledge
d. Develop a product that integrates several technologies

3. Reconsider its focus: Primary focus must remain defence, but it cannot be the only
focus- dual-use disruptive technologies

4. Rearticulate mission to include more things like climate, financial inclusion, etc.

5. Greater outreach to Young India

Chapter 7: Unlimited Potential for the Navy to Reinvent

Brits, etc. came exploited through their maritime powerwe missed the industrial revoln

Post-independence, the nation learnt its lesson. Whilst the army and Air Force were
downsized, the cabinet accepted that India’s future shld be centered on 2 carriers with 138
other ships and crafts- a force level that is yet to be reached.

Indian Navy= always at forefront of the indig. production. Recent initiatives in Make in India:

1. Shipping and defence are identified as strategic sectors for rapid growth of national
industrial base. Some measures undertaken are:
a. MoD shared TPCR Technology Perspective and Capability Road-Map with indy.
b. DRDO’s Long Term Technology Perspective Plan
c. The list of Defence items requiring industrial license was pruned down to 16,
process streamlined and validity  from 7 to 15 years (extd. For 3 years)
d. JVs that can achieve a min. 30% indig content exempt from offset obligations
e. ERV Exch. rate variation protection was extended to all Indian companies
f. Removed anomalies in Duties, taxes, etc.

2. A defence security manual for defence manufacturing units promulgated

Outsourcing and Vendor Devpt Guidelines for SoEs promulgated to  outsourcing
from private sector incl. SMEs
Technology Development Fund under DRDO
AIM of NITI can also be used

3. A defence export strategy,

a. List of items that no longer require approval for exports
b. SOP for NOC and reqt of End User Certificate (EUC) shared,
c. provision for issuing advance/ in principle clearance for exploring business
opportunities abroad

4. DRDO issued a compendium of its products having export potential to help Indian
manufacturing to explore potential export market.

5. National Manuf Policy:

a. objective= GDP contri of manufacturing to 25% +  100M jobs (in 10 years)
b. Govt is pushing exports through a Line of Credit for defence goods
c. DIPP also issued a Public procurement (Make in India) order.

6. NITI-A recommended:
a. Discontinue nominations for shipbuilding projects and reqts of previous
experience for real price discovery and  cost/ time overruns
b. Demand aggregation + life cycle production-cum-maintenance agt for various
common use items such as aircrafts, etc. wld make a viable business case for
investor. MoD and MHA demand can be aggregated.