Agenda for the Decade 2023-2032 Part II

Agenda for the Decade 2023-2032 Part-II

This is in continuity with our previous series of articles, wherein the contour for the priorities of social and industrial sectors was drawn and subsequently in Part-I, the Agenda and detailed plan for the Energy Sector was also elaborated. This is in continuity of Part I of the Agenda and shall dwell on the following sectors.

1.????Mining and Metals

2.????Rail, Road, Air and Sea Transportation

3.????Hospitals, Education and IT

4.????Manufacturing

We reckon that if these sectors, along with energy sector are adequately catered to, there is no reason to believe, as to why the country will not set itself on the path of sustained progress for emerging as a major Nation by the culmination of the next decade and perhaps, a super power by the turn of the century celebrations of the country’s Independence in 2047.

Mining and Metals

One of the core industries on which India needs to build upon, pertains to Mining and Processing of ores for recovery of metals. It is a travesty, that on account of paucity of funds and misplaced priorities and leakages, adequate exploration and processing Industries for Mining and metals have not been created in the country. Consequently, most of the ores explored and mined in the country could only be partially processed domestically and the unprocessed balance ore was exported at a relatively low price. The tragedy of course has been that the country ends up importing substantial quantum of finished products, with a significant differential cost penalty between price of the ore and the finished product. This cycle has to be completely altered in the forth-coming decade and additional processing capacity must be established in the country to ensure, that only value added finished products are exported from the country after catering to the rising domestic demand.

It is well known, that while the country has not been blessed with bountiful fossil fuels, it is probably better placed to compensate for this shortcoming through the renewable initiative with a clear bias towards solar energy. However, the mining sector is extremely vital for the country, which is relatively rich in coal, iron ore, alumina, copper and zinc ores. These are crucial areas on which a very concerted policy and initiative needs to be undertaken, as the per capita consumption of the metals in the country is atrociously low as compared to the average per capita consumption of the developed world, including China. This has to change in the unfolding decade as possibly it could be reasonable aim, to attain large export status on Steel and Aluminum after meeting the domestic requirements to over 90%, even while we continue to import some Copper and Zinc.

Incidentally, somewhat similar to fossil fuels, India so far has not been able to prognosticate any substantive domestic potential of rare earth minerals, which are required for the renewable and EV industry. For instance, cobalt, lithium, tungsten are all?critical rare earth minerals that may be required to be imported substantially in future, to support the ambitious plans linked with renewable Energy development, that the country has launched itself into. It is therefore, all the more important to exploit on the potential of what we seem to have in plenty, such as Iron ore and Alumina, to ensure that the mining segment does not have a trade deficit. Huge plans for capacity building in the basic metals such as Steel, Alumina, Copper and Zinc must be built quickly. Copper perhaps, is going to be an industry on careful watch of the policy makers, as very significant quantum of the same would be required to serve the industrial requirements, led predominantly by solar and wind energy in the forthcoming decade.

Coal

In current times, coal perhaps began to be recognized as a dirty power producing fuel and therefore plans for phasing it have consistently been under the focus of deliberations amongst the Nation’s. Except for Australia, and to an extent India and Russia, where the coal requirement continues to be a dominating fuel for thermal power production, most of the other coal consumption requirements seem to be moderating in the world, including that of China and USA. Europe seemed to be very determined to phase out coal and was gradually and slowly on the path of achieving their objectives. Ukraine crisis however has completely changed the paradigm, wherein, Europe is compelled to resort to rejuvenation of their coal based power plants, and also to examine the revival of their nuclear power plants which had been / or were heading to closure over a period of time. So much for the concern and consistent goading of the Asian countries to be singled out as climate baiters! Nature has its own way of establishing balance and equilibrium!

As the situation is evolving, there is good reason to believe, that the renewed trend of enhanced coal requirements in Europe will continue to increase at least for a period of 4-5 years, inspite of all the chest thumping and brow beating. It can safely be assumed that this would be the minimum time required, for Europe to recover from the harakiri which it has recently committed of self inflicting pain and economic hardship on its populace. In this intervening period perhaps, alternative modes of energy, led by renewable, green hydrogen, gas integration could be created. While Europe will be subjected to hardship during this period of time, the world at large will also suffer from energy and food crises. New geo political formations will unfold and suddenly the world may begin to look a little different. Till such time sadly, a larger part of the globe may have to undergo recession and Economic travails!

India has bountiful quantities of coal and on an average has been mining about 780 MT plus only in recent times. This quantum is likely to increase to about 900 MT by 2025 and about 1.5 Billion Tons by the end of the decade under consideration i.e.2023-2032. As per IEA report 2021 India is likely to consume about 1.18 Billion MT of coal by 2024 as the power demand is on the increase on account of new house hold connections. In 2021 the India coal requirement was 1.05 Billion Mt of which about 705 million Mt was utilized for power generation. Inspite of a coal reserve of 1087 Billion MT, India continues to import a lot of Coal, suggesting that a lot of coal mining will have to be increased in the years to follow in the decade.?Since the quality of coal in India has been relatively poor in quality, laden with high ash, coal has hitherto been primarily used for power generation purposes, both for the utility power plants as well as the major power generation facilities serving the steel and aluminum industry in particular in general and the metal industry in particular. Since only a very small quantum of high quality coal is produced in the country, significant high quality metallurgical coal import does take place to meet the requirements of the industry. In recent times, coal mining have been eased out through new leasing policies, and therefore, there has been a good case of backward integration by some of the metal processing companies to acquire coal mines to meet their captive requirements. This is particularly important for steel and aluminum industries, which are very high power consumption centers. Therefore, it can safely be concluded that incremental coal production shall continue to cater to the power generation requirements with back end emission control facilities and perhaps, it may not be feasible to have coal based power plants phased out in the forthcoming decade.

As mentioned in Part-I of the Analysis, a very significant quantum of coal might find way into the gasification for production of chemicals, there could be a case of moderate power generation through coal in the utility power plants as they are gradually phased out, in preference to gasification for chemicals and distillate blenders.

Similarly, with the emergence of green hydrogen as a potential carbon free fuel, there is likelihood of all new facilities of the steel plants to be integrated with green hydrogen to meet the heating requirements of the ore in the blast furnaces. This will consequentially lead to reduction of carbon foot print of the steel plants, besides rationalizing several other facilities within the steel complex. Green hydrogen integration with steel plants additionally will enable reduction of high quality coal import as well.

It is estimated that about Rs.13 Lakh crores of investment towards additional coal mining would be undertaken in the forthcoming decade, for gradually increasing the coal production to about 1.5 billion tons per annum or so, before it starts declining gradually, as the momentum and thrust towards solar, wind energy and green hydrogen picks up.

Steel

India is currently placed as No.2 steel producer in the world. However, the difference in quality of steel production between the No.1 country i.e. China and India is significantly high. China produces about 1033 MMTPA Whereas India produces 118 MMTPA.?The following table compares the data of the four major steel producers as of 2021:

As a first step therefore, a very concerted plan has to be devised to establish Green field steel complexes with State of the Art Technologies to ensure that the final steel produced is not only used in the construction industry, but significant quantum of high grade steel is produced indigenously to support the equipment manufacturing industry, Automotive Industry etc; to practically eliminate steel import in the forthcoming decade including the high value added steel used in the automotive industry. ?In 2020 India exported Iron ore to the tune of $ 3.93 billion worth which happened to be the sixth largest iron ore export in the world. In 2021 India ended up importing about 5 MMTPA of finished steel valued at about Rs 8900 Crores. This anomaly has to rectified to reverse the cycle wherein Iron ore export is eliminated, and export of finished steel is maximized!

Since the raw material availability is not an issue and the significance of loss of energy and steel capacity in Europe is a strong signal for India, the country should not only try and consolidate its domestic requirements, but also plan big for export of steel / steel products to Europe and Africa. As is evident, Europe has practically halved their steel manufacturing capacities in the past couple of months, and perhaps in the ensuing couple of months, there could be a situation of major closures of their steel plants as they begin to run out of gas and an immediate substitute for the same would not be readily available. China already has tremendous capacity, and India as a Nation is on the move, prompted by strong growth projections, it is an absolute necessity that a distinct bias to grow their steel led metal industry substantially must find way to the desk of policy makers in the ensuing decade. It would not be an exaggeration to assume that most of the steel producing giants may began to evince interest in India for establishing capacities in India. Some movement in the country has already taken place, with Mittal Group taking control of Essar steel facility at Hazira and perhaps, in the next quarter the auxiliary infrastructure facilities related with ports and mines associated with the project could also be acquired. Possibilities of a major expansion of the acquired facilities thereafter, could commence rapidly.

As per our estimate, an incremental capacity of about 40 MMT of steel to be produced additionally in the country in the forthcoming decade can be envisaged. At least two mega steel complexes each of 10 MMTPA capacity and 4 plants of at least 5 MMTPA capacity including debottlenecking and green field capacity can also be foreseen. This will, as a first step ensure that most of the iron ore produced in the country is captively processed for value addition, and India’s dependence of importing steel from other countries, particularly China can be minimized, if not eliminated. All these steel plants could be located strategically, and if possible, closer to gasification facilities, wherein horizontal integration can also be conceptualized between the steel plants as well as the gasification facilities. Similarly, all these plants need to be equipped with green hydrogen facilities, such that, they are environmental friendly with considerably reduced carbon foot print.

It is well known, that per capita consumption of steel is an extremely important parameter to gauge the prosperity and economic strength of the country. India’s per capita consumption is extremely low, 71 vis-à-vis 500 plus as compared to China and other Developed Nations of the world. Installation of the additional steel production capacity as mentioned can help in bridging some gap. The recent news of the steel required for INS Vikrant hull was supplied through indigenous sources, is a strong indicator of the fact, that the entire steel requirements of the domestic requirements for Hydrocarbon, Transportation, Infrastructure, Manufacturing and Construction industry must be sourced indigenously in totality by 2032.

Once this target is achieved and the commensurate capacity is captively established, imports can be largely obviated. This will further enable the conversion industries to become more cost effective and economical and therefore, capital investments towards new mega projects and complexes will also reduce correspondingly.

As part of the larger plan, steel as a basic ingredient in the manufacturing industry can serve as a very strong initiative, to set up economical manufacturing hubs and clusters in the country. It goes without saying, that steel for the transportation industry, particularly Railways and automobiles must be captively sourced to ensure that the import content is practically eliminated in the decade to unfold. About Rs.7,25,000 crores of investment is foreseen towards setting up 40 MT additional capacity of steel production in the country.

Aluminum

India produces considerable amount of Bauxite and aluminum ore, but for a variety of reasons, it has been tentative in increasing the production capacity in the country as aluminum prices have been fluctuating in the past decade. In 2021 India produced about 6.67 MMTPA of Alumina. It is surprising therefore, that after the initial fillip of major aluminum facility being created by NALCO and expanding it further, virgin complexes for aluminum production have not materialized in a big way. As of 2021 the Aluminum production capacity in the country was to the tune of 3.96 MMTPA, as some aluminum smelters have been set up based on ore sourced from others. Nevertheless, India exported about 1.53 MMT of Alumina in 2021 and imported and imported Aluminum?and Aluminum products worth Rs 14 000 crores. This is completely avoidable as dearth of domestic capacity leads to a situation of loss of realistic differential value between the price of Alumina and finished Aluminum. ?

Somewhat like steel, aluminum is an important building block for which it would be worthwhile to establish additional capacity, to not only meet domestic requirements, but also to export substantially to neighboring countries, Africa and elsewhere. In fact, Europe too could be targeted as a market, as high cost of energy in Europe for the next few years, will practically incapacitate their existing aluminum complexes.

Aluminum Industry is a highly energy intensive one. With incremental capacity of coal and also a horizontal switch to renewable energy in the times to come, the price of the Aluminum could be controlled strategically. Countries where domestic ore and capability exists, along with availability of relatively inexpensive power will stand to gain. India must look to the Aluminum sector as an important strategic sector in this newly emerging scenario.?Incidentally, India has a bauxite reserves of about 3900 MMT and therefore, there is urgent need to exploit the bauxite to higher levels of production. ?

It is envisaged, that at least 10 MT of virgin aluminum capacity should be additionally created in the country, divided in four separate plants each of 2.5 MMTPA capacity each. All these complexes must be integrated with an upfront mine, alumina refinery as well as a downstream smelter. Aluminum thus produced from these plants could be an extremely strong initiative to meet all the captive requirements and spare considerable quantity for export. About Rs.3,25,000 crores of investment is foreseen towards setting up of the four integrated plants, besides ensuring that not only the export of alumina can be eliminated, but larger quantities of bauxite is additionally mined, to support the total installed capacity by the end of the decade in 2032.

Zinc & Copper

India is not particularly rich in Copper and zinc reserves. The Copper reserves are estimated to be around 4.13 MMT and India has a capacity of about 153 Lakh ton per annum in the country. This certainly has to be augmented. Similarly, the Zinc production in the country is to the tune of 1.46 MMT against a total reserve of 727 MMT and current ore production of 12 MMT. One of the Copper producing facilities in Chennai has been under shutdown for a couple of years forcing the country to import copper in the recent times.

The total Metals required in the Globe o phase out Fossil fuels indicates a phenomenal global shortfall of metals. Suggesting that even down the line in future a one size fits all type of solution is completely ruled out. We will have to live with a combination of solutions and India certainly could take the lead the way. The table below provides the approximate assessment of the production required vs known reserves to complete phase out the utopian dream of completely phasing out fossil fuels globally.

The above indicates that India will have to tighten its belt, if it is to meet the ambitious plans it has drawn for itself. Not only is the situation of the reserves of the metals required for renewable energy inadequate, India has a larger problem as its share of the reserves of the above metals is rather low. In the decade to unfold , serious emphasis on exploitation of whatever we can explore and mine as a country, we must. In the decade to unfold two complexes for Zinc and 3 plants for production of copper tied up with integrated back up mining facilities are foreseen, to augment the capacity of copper and zinc production in the country. An investment of Rs.1,50,000 crores towards setting up additional copper and zinc processing facilities is envisaged in the forthcoming decade.

With the above emphasis on the major metals to be produced domestically, the country would perhaps be heading for reasonable degree of self-sufficiency by 2032.?This important area needs strict vigil and sustained attention of the policy framers. Hopefully, the new mining and metal policy will address the subject holistically for the larger benefit of the Nation.

Transportation

Transportation and mobility is the core infrastructure facility that needs to be continuously built and upgraded. During the past 8 years considerable fillip has been provided to the transportation industry wherein road, rail, air and port connectivity is consistently on the increase. This momentum has to be sustained in the forthcoming decade as well such that connectivity infrastructure, by and large, reaches its maturity level by the end of the decade. Current rate of road and highways progress of 35-40 Kilometers / day will have to be sustained for a while, before all the plans currently under way and others to be developed begin to take shape. Similarly, the target for the Railway network augmentation has to be increased significantly. While the current railway net work is to the tune of 100 thousand kilometers this may have to be augmented even further, such that the pressure from the roads is consistently taken out for cargo movement at lower costs.

It is envisaged that about 60,000 Kilometers of roads, 20000 Kilometers of railways, 250 new small airports, 10 major airports and about 25 additional ports needs to be created in the forthcoming decade to ensure that connectivity on all the fronts is enhanced. In fact, by the close of the decade in 2032 rail, road and air connectivity should have generally achieved a state of maturity to cater to the requirements of the Nation. Additionally, possibilities of water transport also need to be explored and developed as it is the cheapest mode of transportation. ?

Currently India is pegged back on account of relatively higher transportation cost which constitutes about 13-15 % of the product cost, however with enhanced mobility, quality of connectivity and the directional shift towards alternate modes of renewable power, the transportation / logistics component of the costs is likely to reduce substantially. In fact, GOI has already announced a transportation policy which intends to bring down the logistics costs below 10% levels. This will make the exports from the country, a lot more competitive and also enable to strengthen its domestic transportation costs to curtail inflation and other such issues of which the country is repeatedly subjected to.?

India is currently on course to build more National Highways and rail lines during the decade ending 2025 than it has cumulatively done in the period 1950-2015, between 1950-2015 India built about 4000 Kilometers of National Highways, taking total length of the Highways to 77,000 Kilometers by 2015. It is anticipated though that by 2025 the highways are likely to cross 1,18,000 Kilometers registering a significant growth in a short period of time.

Similarly, Railways had only 10,000 Kilometers of rail lines in 1950 which rose to 63,000 Kilometers by 2015. These rail lines are however slated to increase to 1,20,000 Kilometers by 2025. This is again very significant as almost double the capacity of what was cumulatively achieved till 2015 is likely to be added.

In continuation the port capacity in 2015 was about 1,911 MMTPA which is likely to increase to 3000 MMTPA by 2025 which is again a significant growth suggesting that the country is strongly focused towards building the country’s infrastructure.????

As part of the overall National Strategy the exports for the country must quadruple by 2032. While import will also increase, they will perhaps not increase as much, as the country begins to attain self reliance including a renewed strategy it perhaps

needs to be doubled further from its 2025 level, to ensure that the trade to and from the country is carried out efficiently and without major hold ups at the ports. This will minimize demurrage charges through efficient handling of cargo at the ports. A total investment of Rs.13,00,000 crores is envisaged towards the transportation segment in the forthcoming decade to augment its current infrastructure level to a state of maturity by 2032.

Health Care, Education and IT

The other important segment which is likely to be involved in providing a fillip to the Nation’s development agenda pertains to Health Care, Education and IT segment which are clearly under the focus of Government, as well as are critical to the immediate growing needs of the economy. It is true, that over the past few decades all these sectors somehow have not been under prime focus of the country’s priorities except for minor tinkering in the resources allocation. Somehow a clear strategy direction has been put on the table recently only where the thrust seems to be to bring about a major and radical change in this segment. ?

For this segment, Covid-19 itself has been a major teacher which subjected the health and education sector to serious duress. It is encouraging to note that in recent times, since some exceptional work had been done in the IT segment, a lot of problems of the health care as well as educational system could be partially obviated. This is of course work in progress and there is a lot more that needs to be undertaken. What is important is the fact that the process has commenced! Sometimes, it is possibly an earth shaking event, which enables Leaders to re-visit the policies of the country ab-initio. Possibly, Covid-19 being once in a century kind of an event, warranted extraordinary effort and effective strategy to be put in place at break neck pace. It was good that the Government had been putting considerable emphasis on augmenting the IT infrastructure in the erstwhile times which enabled the necessary paraphernalia required to contend with the pandemic to be put in position quickly for real time alignment. The pandemic brutally shook the basic foundations of the weak health care and education sector infrastructure which was subjected to strain to elastic limits, during the hurly burly times when the pandemic was at sway. This structure has to alter dramatically in the decade to unfold.

We expect that at least 1500 new large size hospitals would be required pan India to ensure that a semblance of health care security is extended to the citizens. These additional hospitals will spur their own chain of cascading activity in the industrial corridors and provide considerable fillip to the associated medical equipment and pharmaceutical wings to support the initiative. However as India is already recognized as fairly advanced in medical support, it can be anticipated that the country will attain near self sufficiency in pharmaceuticals by 2032.

In parallel, it would be prudent to acknowledge the fact, that given a chance India and its scientific community can actually end up serving many wonders. The invention of the indigenous vaccines in a short period of time against hugely negative atmospherics has upheld the country’s credentials, and has enabled it to raise the bar of excellence. India is strong on pharmaceuticals and the support industries / infrastructure available in the country to manufacture vaccines, drugs pharma products, are well placed. Over a period of time though, there have to be changes enforced in the system wherein, most of the production of medicines currently under international patents will have to gradually find way to indigenize. This will amongst other things, lead to reduction in prices of medicines which is a prime requisite for a country like India, where a vast majority of people continue to struggle with poverty. The Government’s current plan of JanAushidhi scheme is an important initiative, which needs to be given additional fillip to ensure the range and reach of medicines at affordable prices to the poor.

The Policy of Government to bring a 100 million people under the Aayushman Bharat Scheme for extending free treatment, surgery and hospitalization and low priced medicines through the JanAushidhi scheme is the best form of social welfare and security, which a developing country can render to its people. This momentum has to be sustained, as the process has just begun and would require considerable efforts before it can be considered to have reached any degree of maturity. There is good reason to believe that all the physical infrastructure of hospitals, tied up with Industry, Phamaceuticals, JanAushidi, Aayushman Bharat through a robust IT connect will be a major step ahead in the decade to strengthen the Health care infrastructure of the country.

Education

The Indian Education system, particularly at the undergraduate level associated with engineering, management, medical and law is fairly matured and Indian students and academicians, since time immemorial, have been making substantial contribution towards serving the global community. However, paucity of appropriate higher level specialization and proficiency development linked institutes, has led to a vast problem of brain drain from the country. The education system in the country lacks in compatibility with fundamental research oriented R&D hitherto, as the country could never find adequate resources to support such research oriented advanced education. This is also evident by the fact that the number of patents, which the country enters into annually, is far below what competitive requirements demand and what the developed Nations undertake. This has to change to ensure that in modern India, the country is equipped with an education system with a slant towards R&D and emphasis both on fundamental research as well as encouragement to entrepreneurship and industrialization. This is vital as this could be game changing for setting the agenda for professionalizing the education system of the country in the decade to follow.

Hitherto, most of the education policies in the country have had a thrust towards academics and degrees with little connect with Industry. Often what is taught in schools, colleges and institutes is more towards aptitude building rather than direct practical connect with real life. The result therefore is, that after college the moment one is in profession, career building and learning starts de-novo. This disconnect has to be replaced with a positive and forward looking connect between academics and industry gaps to be bridged.

Similarly, the renewed focus on skilling rather than degrees alone is an important initiative, in which vocation will take precedence over rote learning. This should be immensely beneficial for the country as the education system, if tuned towards skilling will improve the overall employability levels of individuals, as well as provide a thrust to the economy in the process, as the likelihood of a strong and robust increase in the GDP of the country for a sustained period of time is bound to happen, as the people are skilled and vocation oriented. ?Most of the unskilled workers will move to the semi skilled/skilled category, and mechanization therefore, is bound to follow. This would be critical for enabling the country to leapfrog ahead with a clear line of sight.?Huge investment and resources in the education system therefore would be required to be invested in the forthcoming decade to make the country ready to surmount the lack of education barrier to emerge as a major/ super power. ?

We estimate at least 8000 new State of the Art Schools, Colleges and Institutes to enable 6 to 8 lakhs of high quality students to be come out from colleges annually as distinguished fellows, engineers, doctors, lawyers, artisans, skilled workers are required. This will additionally have a cascading effect on the associated chain of industries connected with the education sector to serve the construction industry, printing industry, textiles, furniture, transportation, IT and other associated facilities which will gain fillip to contribute to GDP. This decade should be treated as an extremely important decade to professionalize education to a large extent, such that the subsequent decade and a half to 2047 shall see the Nation completely obliterating lack of education and illiteracy for helping the country to find itself amongst the illustrious league of developed Nations.

An important aspect associated with education which is directly linked with the commensurate development of the country, is to gradually eliminate gender bias and ensure that the girl child gets as many opportunities. Some great signals towards the same are already under way, it would be prudent to imagine that by 2032, at least 30 - 35% of all the professionals, senior Management positions, representations in Parliament and down the line in industries including the forces are held by the women folk. Nations cannot develop unless the availability of opportunity is available with all in the country, irrespective of their gender, religion, caste, class and creed. The next two decades would serve as a critical test for the country on this bench mark.

IT

The intervention of IT Industry in several services and industry engagement has been under the vigil and focus of the current disposition. The way digitalization has picked up in institutions, education, banking and administration, health care it augurs extremely well for the social milieu of the country. The emphasis of fiber connectivity penetrating deep into hinterland to ensure, that all digital services are available with the last mile at the press of a button, is a vital initiative. This is perhaps, almost essential for any strongly developing / developed economy.

Smart instrument availability, mobile connectivity and access to 5G network across the Nation, in its fullest measure, is a strong objective to be fulfilled in the forthcoming decade. This could be consolidated further between 2032 -2047 for enabling the country to attain maturity and advancement substantially.?IT connectivity is a near sine qua non for the Nation to emerge as a strong and distinguished super power by 2047. Artificial Intelligence and robotics are bound

to follow with enhanced IT connect. While in an over populated country like India, robotics may be an issue, it will have to be reared up in selective industries where automation and efficiency are of paramount importance. There are several industries where perhaps the robotics may have an important role to play. This is a point to unfold in its fullest measure in the forthcoming decade, and the ones to follow.??It is estimated that close to Rs.13 lakh crores of investment would be on the anvil to support the health care, pharmaceuticals, education, IT connectivity and its appropriate, effective and efficient utilization in the forthcoming decade. Such an investment is bound to yield its own beneficial effects on the overall standard of living of the citizenry as well.

Manufacturing

The Country’s ambitions of emerging as a developed country rests crucially on how well it unfolds a policy in which, incentives and momentum is provided to the manufacturing sector. While post Independence, India has had its manufacturing sector serving significant indigenization, the problem always has been with respect to associated infrastructure, which could not make manufacturing an important and effective destination for the world majors to come forward. It is encouraging to note though, that in the past few years this scenario has been changing substantially and the mind set towards Industrial development is being understood more pragmatically.

In all the industries, including electronics, communications and IT segment, significant indigenization trends are beginning to emerge which augurs well for the future. Amidst the changing geo political dynamics a shift of the large manufacturing base from China to India is also likely. Apple’s entry into the mobile segment to manufacture in India is a first major step towards imagining that something big and major will happen in the country sooner than later. Similarly the GOI initiative to promote manufacturing of semiconductors and chips in the country is a big Positive. With Vedanta already making the first move to set up a large semiconductor manufacturing base in Gujarat the floodgates will open. GOI is determined to ensure that the 5G technology and services will largely be provided by the Indian companies and perhaps through domestic technology. All this sets up the stage beautifully to combine the software skill of the company with hardware manufacturing to maximize the benefits for the country.??

Similarly in heavy industry segment the country has made major strides forward. With Power, Transmission, Hydrocarbon and Chemical, Steel and Aluminum projects considerable indigenization levels have already been achieved. This is consistently helping in minimization of imports. Defense is a great sector which is showing the way as to how with a vision and concerted efforts things can be turned around. This gradual industrialization has brought the country to a pedestal for where it can be launched forward for vertical take-off. With a strong It connect, a sound infrastructure and a robust education system the manufacturing sector is bound to leap forward with strong backing of skilled manpower and innovative bent of mind available to take the Sector and therefore the country forward.

However, a good measure of success in the manufacturing segment always has to be an equitable balance between meeting the domestic requirements as well as catering to the export requirements. It is only in the last one or two years that India’s exports have come into limelight wherein, under the concerted policy efforts of the Government of India strong fillip towards Make in India and Atam Nirbharta has been gaining traction. This is changing things as the Nation is well and truly involved towards providing momentum to national growth and development in the truest sense. This is significant!

As mentioned above, a strong and efficient infrastructure which promises efficient transportation, high quality education, prompt and pro-active health care and significant IT connect, are probably the basics without which, it would be difficult to see industry progressing rapidly. While in Part-1 of this series of articles the focus has been on the critical energy industry (barring utility power generation and transmission) has been discussed extensively, the other core segment of the industry involving mining and metals along with social infrastructure has been focused upon herein. A combination of all these segments necessarily need to work in tandem to serve as a key sub-set to the manufacturing industry for it to make giant strides forward in a massive way. ?It is important for manufacturing to flourish, that domestic availability of raw materials is enhanced, energy is reasonably priced for its efficient availability, skilled manpower is available, and focus on R&D and State of Art Technology is never lost sight of.?Additionally, enhanced automation and creation of vast tracts of land is organized to support mega manufacturing capacities under an industry friendly taxation and fiscal setup.

While the segment involving manufacturing in itself is a large subject, we would in this Article be restricting ourselves to the manufacturing entities associated with semi conductors, chips, ship building, indigenization of all wagons, coaches, locomotive for metros and long distance trains and all equipment and hardware requirement to support the green energy initiatives. In the changing geo political setup the ship building segment, is recognized as an important one as in the times to come the shipping of cargoes is bound to come under pressure. India has to develop a robust and efficient setup for manufacturing and fabrication of a wide variety of vessels which could be used to transport Hydrocarbons, LNG, FSRUs, fleet of cargo ships and significant number of naval ships, submarines etc to make the country self sufficient. This is an absolute necessity. All these and various other sub sectors discussed between Part-1 and this concluding part would involve a very high degree of manufacturing of equipment, machinery and hardware to proficiently serve the industry. We will take the opportunity of discussing some of these sectors one by one.

Manufacturing Clusters

Since the target of $ 5 trillion or more by 2032 has already been set, it is imperative that manufacturing must gain fillip and place in the higher agenda of the Nation. Amongst other things, one of the major problems with the manufacturing industry, particularly large scale foreign direct investment, was the fact of lack of availability of identified land mass, power at affordable price and above all logistics and proper connectivity with respect to the road, rail, water, air transport, such that manufacturing could be fast tracked and efficiently delivered. Unless these aspects are adequately addressed efficient manufacturing to serve the low cost domestic market, as well as the high cost export markets would remain elusive.

However with the initiative under way, we foresee at least four manufacturing clusters in the country spread between East, West, North and South. To keep the transportation costs at bay, perhaps the Northern manufacturing cluster could slip somewhat into Central India, such that, it remains equally distant to the domestic markets in various directions, as well as, does not remain way off from water connectivity. At least three of the four manufacturing clusters have to be located along the coastal areas for ease of export.

These manufacturing sectors are anticipated to be world scale size mega cities, in which from electronics to heavy machinery, all would be expected to be produced though of course, based on the geography and the relative requirements of the region and low cost raw material availability the product mix in each of the clusters could be somewhat different. Each of the clusters is anticipated to involve about Rs.25 lakh crores of investment for development and setting up of the infrastructure, buildings, machinery. Power and Transmission System, dedicated ports and port handling Infrastructure, Road and rail connect which can be supported by investments from the domestic industry, as well as foreign direct investment to encourage domestic production of goods on World scale size. ??At least 40% of the produce from these clusters need to have an export orientation.

These clusters would gradually enable movement of a lot of industries from China by providing an appropriate environment for setting of various industries to produce goods of International quality. The clusters could particularly focus on Africa as a major subcontinent wherein major infrastructure and Industry related projects could be set up. Government of India interventions for line of credit projects and quid pro quo of setting up large scale projects could be conceived in exchange of Energy. Major Financial Institutions of the world could be roped in to support the initiative.

We reckon that all these four clusters should become operational in the forthcoming decade, with commensurate support from enhanced indigenization of mining and metals, education, IT connect, low cost energy, water and transportation to make the produce from the country of international quality at competitive costs. At least 20% of the capacity in each of the hubs could be dedicated exclusively for support of indigenization of arms and ammunition required for the defense industry including the naval wing. The aim needs to be that by 2032, the current imports of the country have to be at least halved, and attractive incentives provided to the world majors in the defense segment too to invest in the country for setting up manufacturing facilities in India. If this were to make place as envisioned, it cannot be a distant dream to have the passenger, aircrafts also to be manufactured in the country by 2047 i.e. by the time of the turn of the century of the country’s Independence.

Semi Conductors, Chips and electronics

Considerable emphasis is already being provided to exacerbate fillip and momentum to the digital industry which is necessary for the development of the industrial segment in particular. Further, the need for indigenous manufacturing of semi conductors and chips could never be more than is now being emphasized.?It is a vital ingredient for so many of the industries. It is important that reasonably sized companies to support domestic manufacturing of semi conductors and chips must stretch across the length and breadth of the country. The first great news towards this has already come from the recent intervention by Vedanta who along with State Government is poised to set up Rs.1.6 lakh crore investment in Gujarat to support the manufacturing of semiconductors & chips.?This could be a game changer and perhaps similar such facilities must also be encouraged under various parts of the country to manufacture semi conductors, laptops, mobiles, electronics, IT equipment, IT related defense equipment. It is envisaged that at least 25 numbers of manufacturing centers of a variety of sizes in the country must be set up in the forthcoming decade, involving at least Rs.50,000 crores of investment per facility, and made operational as quickly as possible to ensure that by 2032 at least 75% to 80% of self sufficiency is achieved in this domain.

Ship Building

Cargo transport, petroleum distillate carriers, LNG carriers, Naval ships and Frigates need a quantum jump in terms of indigenous production in the country. While a few shipyards have been operational in the country and the recent launch of INS Vikrant is a superb indigenous story of innovation and enterprise coming together, yet a number of things need to be done, particularly in context of the turnaround cycle of the vessels. First of all, the total schedule in which the sea worthy equipment are produced, needs to be challenged, such that the average time cycle is reduced from the current levels of perhaps no time lines, to something like 4-5 years at the best for the largest piece of shipping equipment. This is absolutely vital. It is also important that with all the other initiatives being taken up in parallel, the indigenous component in ship building should augment to at least 80-90% level by 2032. This will enable lesser cost, faster turn around and enhanced fabrication and manufacturing practices. Automation and fast tracking are very important in this industry. The recent crisis in Western Europe suggests that the shipping industry is likely to be under considerable pressure in terms of cargo movement in the times ahead. With India slated to emerge as an industrial power, the import and export will increase dramatically, and therefore, it would not be wise to leave everything to the foreign freight carriers. Indigenization of this industry with an objective of fast tracking production is extremely vital for the Nation to move forward.

It is expected that at least 25-40 different types of vessels are produced annually in the country from 2029 onwards so that this number reaches to a peak level of 50-60 numbers in the subsequent years. All the associated facilities in terms of enhancement of capacity of ship yards, imbibing of various technologies to develop the hull and the top side of various vessels, needs to be all programmed in the ensuing years for enabling the country to take the best advantage of its enormous coast line.

Metro and Railways

A strong fillip with respect to indigenization and modernization of the railways is under progress and it is heartening to note, that the indigenous trains are already beginning to make way for public transport in a big way. A similar indigenization emphasis is also being made for the metros. In the years to follow, it would be

wise to ensure that self sufficiency in this segment is targeted, to a large extent and additional emphasis is given to boost the manufacturing of these industries.

As per our plan/estimates about 8000 Kilometers of additional metro lines with at least 750 metros should be in position by 2032, pre-dominantly led by indigenous manufacturing capabilities. As high as 90% indigenization component in this segment needs to be targeted. Similarly for the inter-state railway systems at least 1000 Gati-Shakti trains must be manufactured indigenously to support the new additional requirements, as well as replacement of the ageing carriers. The idea around which the plan is developed is to ensure that by 2032, the public transport system is strengthened in a manner that the pressure on the individual transport reduces by at least 40-50 % notwithstanding the anticipated increment in population. As per our estimates, about Rs.34 lakh crores of investment would be foreseen in the manufacturing segment mentioned above which of course excludes modernization of the existing manufacturing capacities in various industries.

Overall

For Mining and Metal, all modes of transportation, education and health care and IT and the manufacturing segment as highlighted above, a total of Rs.107 lakh crores of investment is foreseen through the decade, which should have a considerable multiplier effect on the health of the various other segments of the economy. This level of investment and focus on these industries is expected to generate about 1.8 crores of indirect jobs and about 36 lakhs of permanent jobs associated with these industries.

It is our considered belief, that these segments of the economy as covered in Part-1 and Part-2 of the series of articles, is likely to generate the necessary momentum and fillip, pursuant to which, there is no reason to believe as to why the country would not find itself well disposed on the path of trajectory, which could help it to emerge as a developed Nation by the turn of the century of The country’s Independence by 2047.

The total investment towards various segments addressed in these plans amounts to about investment about Rs.136 lakh crores or about 1.7 Trillion of US dollars through the decade 2023-2032. The investment is led by manufacturing, health care, education & IT followed by Energy, Mining and Metals, Transportation.

The employment potential generated out of this itself would be significant, wherein about 2.02 crores of labor and about 37.5 lakh of personnel on permanent rolls can be anticipated. This of course excludes the cascading impact that would be generated in all the existing and other support industries! ????

Jai Hind! Jai Bharat!