📰 Probe agencies too hit by lack of manpower: CJI
Bench was hearing plea about hundreds of criminal cases pending against sitting and former legislators.
•The Supreme Court on Wednesday said probe agencies such as the CBI suffered from the same dearth of manpower and infrastructure like the judiciary. Both were overburdened.
•“Just like us, investigative agencies are suffering from lack of manpower and infrastructure… Everybody says ‘CBI, CBI…’ We don’t want to demoralise the investigative agencies. They are overburdened… Similarly, one trial court handles 1000 cases. How do you expect them to function? We had asked for special courts to hear exclusively cases under specific legislations… but nothing,” Chief Justice of India (CJI) N.V. Ramana, heading a Special Bench of three judges, remarked orally.
•The Bench, also comprising Justices D.Y. Chandrachud and Surya Kant, was hearing a petition about the hundreds of criminal cases pending against MPs and MLAs, both sitting and former, for years together. Some of these cases, investigated by agencies such as the CBI and the Enforcement Directorate (ED), have been pending for over a decade.
•A report submitted by the court’s amicus curiae, senior advocate Vijay Hansaria, assisted by advocate Sneha Kalita, said 51 MPs and 71 MLAs were accused of offences under the Prevention of Money Laundering Act, 2002.
•Similarly, out of the 121 cases pending trial against MPs/MLAs before the CBI courts across the country, 58 cases were punishable with life imprisonment. In 45 cases, even the charges have not been framed, though the offences alleged to have been committed several years back. A total of 37 CBI cases against legislators were continuing in the stage of investigation for years on end now. One of these cases, according to the CBI, was “expected” to be completed by 2030, the report said.
•“In some cases, you have not filed a charge sheet in 10 or 15 years… In one case, you have attached assets worth over ₹200 crore but not filed a charge sheet. Simply attaching property will not serve any purpose,” Chief Justice Ramana addressed Solicitor General Tushar Mehta, who appeared for both the CBI and the ED.
•“The information given by the ED and CBI present a really, shocking, disturbing and gloomy picture,” Mr. Hansaria submitted.
•The Chief Justice reasoned with Mr. Mehta to complete the trial in these cases quickly rather than have them hanging over the heads of the accused like Damocles sword.
Plea for directive
•The Solicitor General urged the Bench to pass a judicial order directing lower courts to complete the pending trial proceedings in a “mandatory time-bound manner”, possibly within the next six months. He submitted that in some cases, the High Courts intervened and granted stay of the trial.
•But the CJI did not agree, saying the High Courts have stayed trial in only seven cases and the Supreme Court in one.
•Mr. Mehta then said ED cases were held up because they spanned to tax havens abroad who refused to cooperate with probe.
•The CJI stated efforts would be made to “rationalise” the number of cases before each trial court. The judiciary was slowly but surely dealing with the problem of scarcity of judges - High Courts have 455 judicial vacancies as on August 1. Besides, lower courts also have other urgent cases of bail, custody matters, etc, to hear and decide.
Mechanism soon
•The Bench said a mechanism would be put in place soon to monitor the progress of criminal trials involving legislators soon. This would include special courts.
•In the previous hearing, the apex court questioned the Centre’s commitment towards the speedy trial and prosecution of criminal politicians. It also directed that a criminal case against an MP or MLA could be withdrawn only after getting the consent of the High Court concerned.
•“We deem it appropriate to direct that no prosecution against a sitting or former M.P./M.L.A. shall be withdrawn without the leave of the High Court… Various State governments have resorted to withdrawal of numerous criminal cases pending against MP/MLA by utilising the power vested under Section 321 CrPC. The power under Section 321 CrPC is a responsibility which is to be utilised in public interest, and cannot be used for extraneous and political considerations. This power is required to be utilised with utmost good faith to serve the larger public interest,” a three-judge Bench led by the CJI had directed in its last order.
All existing visas issued cancelled, says govt
•In a move that could affect hundreds of Afghans desperate to leave the country, India decided on Wednesday to “invalidate” or cancel all visas issued to Afghan nationals, including about 2,000 issued in the last few months as the Taliban began to make advances across the country.
•The government announced that all Afghans must enter India now only on special e-visas applied online.
•“Keeping in view some reports that certain passports of Afghan nationals have been misplaced, previously issued visas to all Afghan nationals, who are presently not in India, stand invalidated with immediate effect. Afghan nationals wishing to travel to India may apply for e-Visa at www.indianvisaonline.gov.in,” said a statement issued simultaneously by the Ministry of Home Affairs (MHA) and the Ministry of External Affairs (MEA).
•The news has come as a blow for Indian national Ashiya Iqbal, who was married to an Afghan, and received visas for her husband and in-laws in the hours before the Taliban claimed Kabul on August 15. Ashiya was able to return on the evacuation flight operated by the government from Kabul, but not her family. With the new rule now announced, Ms. Iqbal says they would have to reapply for visas that they procured at considerable trouble and she doesn’t know when she might see her husband.
Govt’s concern over passports
•When asked about the sudden announcement and rule change, officials told The Hindu that the government was concerned that passports deposited by Afghan nationals for visas, which were being stored at the Indian Embassy and the Indian visa centre Kabul, could get into the hands of anti-India terror groups. As a result, the MHA decided to cancel them, and make the e-visa application mandatory instead.
•However, the processing of “e-Emergency X-Misc visas” also appears to be delayed at present, and sources said that “very few” e-visas have been issued more than a week after the launch. Only about 20 of those “closely associated” with India have been allowed to travel on evacuation flights, the sources said.
•MEA officials manning the helplines say they have received thousands of requests from Afghans needing help with visas and to coordinate their exit from the country, including professionals, Army officials who trained in India, students, journalists, women activists and members of ethnic minorities who fear they are under threat.
•Some of those who applied showed emails from the MEA promising a response within three days, but have received none even eight days later.
Taliban announcement
•On Tuesday, Taliban spokesperson Zabiullah Majid announced at a press conference that the road to the airport would now be “closed to Afghan nationals” and that women must not step out for work, making their situation more desperate.
•The delay is beginning to take its toll on Shazia Mazari, who belongs to the Hazara community and her sister, brother and parents, all of whom applied for the Indian e-visas more than a week ago, and felt some comfort in the announcement made by the government after a meeting chaired by Prime Minister Narendra Modi undertook to help Afghans in dire need to relocate to India with the launch of the special visas for a period of six months.
Plea for help
•“India has been Afghanistan’s friend for years, and made visas available to us. We feel we are close neighbours because of India’s generosity,” Mazari said in a message she recorded for an Indian youth digital magazine called The Bastion. “We are not safe here. Don’t leave us helpless, we count on you. As much as India can support, especially women, we hope you can help so that they have some choice. Please help us,” she stated in her appeal to the government. Today, however, Ms. Mazari said she was losing hope of hearing back at all, and options to leave her home in Afghanistan are dwindling.
•Mohammad Farhan, one of four PhD students who were studying in Delhi until the pandemic shut down their university, has still not heard about how he could return, and has not heard about his e-visa application either. Their passports are amongst hundreds that were lying at the embassy when the government decided to pull out the entire diplomatic staff. Wednesday’s decision means that even if Mr. Farhan receives his passport back now, his visa would not help him return to India to complete his studies.
📰 Fukushima nuclear water to be released via undersea tunnel
The aim is to avoid interference with local fishing
•The operator of the wrecked Fukushima nuclear power plant said on Wednesday it plans to build an undersea tunnel so that massive amounts of treated but still radioactive water can be released into the ocean about 1 km away from the plant to avoid interference with local fishing.
•The operator, Tokyo Electric Power Company Holdings, said it hopes to start releasing the water in spring 2023. TEPCO says hundreds of storage tanks at the plant need to be removed to make room for facilities necessary for the plant’s decommissioning.
•An official, Junichi Matsumoto, said TEPCO will construct the undersea tunnel by drilling through bedrock in the seabed near its No. 5 reactor, which survived the meltdowns at the plant, to minimise possible underground contamination or leakage of radioactive ground water into the tunnel. Radioactive water has been stored in about 1,000 tanks at the Fukushima Daiichi plant since 2011, when a massive earthquake and tsunami damaged three reactors and their cooling water became contaminated and began leaking.
•The government decided in April to start discharging the water, after further treatment and dilution, into the Pacific Ocean in spring 2023 under safety standards set by regulators, a move opposed by fishermen and neighbouring countries.
•Under the new plan, the water will be released at a depth of about 12 m below the ocean’s surface, said Mr. Matsumoto.
📰 Income and quotas: On creamy layer
Supreme Court lays bare the limits of using economic criterion to determine reservation eligibility
•The Supreme Court’s ruling that economic criterion alone cannot be used to classify a member of a Backward Class as belonging to the ‘creamy layer’ adds an interesting nuance to the jurisprudence of affirmative action. There was a time when backwardness was primarily related to the inadequate social and educational advancement of a group. Ever since the Court, in Indra Sawhney (1992), introduced the concept of ‘creamy layer’ — a term describing the well-off among the Backward Classes — and declared that this section should be denied reservation benefits, the original idea of including groups based on social backwardness was matched by a parallel exercise to exclude the more advanced among them. This position has crystallised into law. Many support the formulation that once caste is accepted as a basis for determining backwardness, there is nothing wrong in excluding the affluent among the eligible castes. The Union government has unreservedly accepted the ‘creamy layer’ rule, and formulated criteria for identifying those who fall under the category. The proponents of economic criteria feel that genuine social justice means reservation benefits should be restricted to the poorer among the backward; while sections championing Backward Class assertion disfavour any dilution of the social basis for reservation.
•The Court’s latest judgment in a Haryana case corrects a grave error by the State. It has struck down a notification fixing an annual income of ₹6 lakh as the sole criterion to identify whether a family belongs to the creamy layer. It was contrary to Indra Sawhney that had spoken of different criteria, including being the children of high-ranking constitutional functionaries, employees of a certain rank in the Union and State governments, those affluent enough to employ others, or with significant property and agricultural holdings and, of course, an identified annual income. The Court has found that the Haryana criterion based on income alone was contrary to its own law that specifies that the creamy layer would be identified through social, economic and other factors. The Constitution permitted special provisions in favour of ‘socially and educationally backward classes’ through the first Amendment, as well as reservation in government employment for ‘backward classes’. Judicial discourse introduced a 50% ceiling and the creamy layer concept as constitutional limitations on reservation benefits. However, the 103rd Constitution Amendment, by which 10% reservation for the ‘economically weaker sections’ (EWS) has been introduced, has significantly altered the affirmative action programme. With the current income ceiling being ₹8 lakh per annum for availing of both OBC and EWS quotas, there is a strange and questionable balance between the OBC and EWS segments in terms of eligibility, even though the size of the respective quotas vary.
📰 Helping and hindering justice
Technology can be a game changer, but it is not a panacea for the ills plaguing courts
•In early June, while dealing with issues arising in connection with the CoWIN portal, the Supreme Court pointed out some of the major impediments in the delivery of vaccines to the people at large. They were: inadequate digital literacy across the country, inadequate digital penetration, and serious issues of bandwidth and connectivity, particularly in remote and inaccessible regions. Despite the ambition of bringing the benefits of vaccination to every human being in the country, the policy was falling short of its goal because of the inherent difficulties pointed out. The premise in the observations of the court was that relying solely on digital transformation may not be a sound idea. It could result in exclusion of a large section of the population on account of the enumerated shortfalls. Soon after this, the government said that CoWIN registration would no longer be mandatory for vaccination.
Rising to the challenge
•What the court observed about the delivery of vaccines through digital portals alone is equally true of the delivery of justice, which is as important as ensuring the health of the people of the country. Although the courts have risen to the challenge posed by the COVID-19 pandemic, by using existing technology at an unprecedented scale and speed, it is proving to be an uphill task. In the wake of the pandemic, courts began using facilities like e-filing in true earnest. In May 2020, the Supreme Court also introduced another innovation: a new system of e-filing and artificial intelligence-enabled referencing. This was meant to herald efficiency, transparency and access to court delivery services for every user.
•The judiciary’s effort is not merely a one-off action to tide over the pandemic-created emergency. It also seeks to harness technology in overcoming and resolving the intractable ills that have for long dogged the judiciary. These include the massive backlog of cases and unacceptable levels of judicial vacancies across the country at all levels. Deep house cleaning is required in each court and there also needs to be an outreach to all litigants in a cost-effective, convenient and efficient manner. Perhaps, this could be the opportune time for making lasting changes that could transform the creaking justice delivery system in India. But an over-reliance on technology is not a panacea to all the ills plaguing the courts and if done without forethought, could become counterproductive.
•Let us take the analogy of vaccination a little forward. Just like the rigorous process of vaccine trials is a pre-requisite to rolling out universal vaccination programmes, after which technology is incorporated across the board, it would be imperative to resort to performance audits and sandboxing measures to carefully understand and gauge the potential and risks. Evidence shows that despite considerable investment to digitalise judicial infrastructure and administration, beginning with Phase 1 of the eCourts in 2007, the judiciary’s performance during the pandemic period has left a lot to be desired. In absolute terms, data show that pendency reached an all-time high during this year of virtual functioning of the courts. In the case of district courts, pendency rose sharply by 18.2% between December 31, 2019 and December 31, 2020, according to the National Judicial Data Grid. Across the 25 High Courts, pendency witnessed its sharpest increase of 20.4% in 2019-2020.This, of course, does not include all those matters that were never filed.
The way forward
•Given that the pandemic caught all institutions by surprise, there is bound to be teething trouble. However, now that we are in its second year, our next course of action should be based on an evidence-based rational approach. For instance, we need to study and understand why video conferencing in criminal cases has neither shortened trials nor reduced the number of people awaiting trial. Similarly, we need to address uneven digital access: while mobile phones are widely owned and used, access to the Internet remains limited to urban users. Lawyers in semi-urban and rural districts find online hearings challenging, mostly due to connectivity issues and an unfamiliarity with this way of working.
•Just as doctors cannot be replaced by chatbots, technology, no matter how advanced, cannot be a substitute for judges of whom there remains a big shortfall. The India Justice Report 2020 pegs vacancies in the High Court at 38% (2018-19) and in lower courts at 22% for the same period. More than four out of every 10 posts of High Court judges remain vacant as on August 1 this year.
•If deployed with adequate data-based planning and safeguards, technological tools can be a game changer. However, technology is not per se value-neutral — that is, it is not immune to biases — and therefore, it must be properly evaluated for us to see whether it works to increase the power imbalance between citizens and the state or whether it affirms and furthers citizens’ rights.
•Open court is a cardinal principle in the delivery of justice. The question of public access cannot be pushed to the sidelines but must be a central consideration. The shortage of technical infrastructure has too often meant that access to online hearings is curtailed. This ad hoc deviation cannot be allowed to become a habit of convenience.
•The latest Vision Document for Phase III of the e-Courts Project seeks to address the judiciary’s digital deprivation. It envisages an infrastructure for the judicial system that is ‘natively digital’ and reflects the effect that the pandemic has had on India’s judicial timeline and thinking. However, we must keep in mind that there will always be an inherent resistance to change, whether for good or bad. Therefore, two preconditions need to be addressed: adequate trained manpower, and tailoring systems to the specifications and contexts that we require. This is more a matter of mindset — not just of judges, but of litigants and lawyers as well; and is linked closely to trust in digital interventions.
📰 Negotiating the new global climate policy
Reducing per-person emissions to the global average as a first step to national net-zero requires a human rights frame
•The policy significance of the recent report of the United Nations (UN) Intergovernmental Panel on Climate Change (IPCC) is that reaching net zero alone is not enough as it is the cumulative emissions up to net zero which determine the temperature that is reached, and that a global policy which considers only current emissions will not limit global warming and its adverse effects.
Restricting well-being
•For 30 years, climate negotiations have struggled with a frame that created an imbalance between countries sharing global carbon space, the only limited natural resource. Development depleted carbon space causing the climate problem and developing countries are being pressured to limit their use of the remaining space as the solution. At the G20 Climate and Energy Ministerial meeting in July, India proposed that major economies bring down their own per capita emissions to the global average by 2030.
•Reframing negotiations in terms of bringing per-person emissions, or human well-being, as the essential first step highlights that merely achieving net zero of current emissions by 2050 — the proposal of the G7 — restricts well-being and is unacceptable as global policy. Varying levels of per-capita emissions converging to a common point will allow those who have already used more than their fair share of the carbon space a larger share of the remaining space than countries such as India which need the remaining carbon space to grow to comparable levels of well-being.
Per capita emissions
•The policy significance of the imbalance becomes clear when per-capita emissions are compared. The world’s per capita greenhouse gas emissions are 6.55 tonnes of carbon dioxide. India’s per capita emission at 1.96 tonnes is less than one-third; emissions of the United States, Canada and Australia are more than two-a-half times; Germany, the United Kingdom and France are above, and China, at 6.4 tonnes, is just below the global average. Accepting ‘net zero’ emissions by 2050 effectively prevents India’s urbanisation and shift of the rural population into the middle class.
•India is rightly objecting to the obfuscation, as the Objective of the Climate Treaty is “stabilization of greenhouse gas concentrations”. By contributing over 60% of global cumulative emissions, with just one-fourth of the global population, North America and Europe are responsible for nearly 970 billion tonnes of carbon emissions.
•Whereas, the world’s remaining carbon budget — the total amount we can emit to have a chance of limiting warming to 1.5° C — is only 400 gigatonnes of carbon dioxide, and the U.S. alone has contributed this amount for its high standard of living. For a global consensus, such countries will need some flexibility in the new climate policy.
Emission sources
•The reframing should stress ‘essential’ emissions to justify the flexibility and the need. Infrastructure, or construction, essential for urbanisation and quality of living is responsible for two-fifths of global carbon dioxide emissions from fuel combustion and 25% of emissions overall. These emissions arise from energy intensive cement production and half of the steel produced which is used in construction, both having no substitutes.
•The varying levels of per capita emissions are accounted for by expressways and the urban boom in the U.S. and Europe between 1950 and 2000, before China began its infrastructure push, leading to per-capita material use that is four times that of China. The U.S. first recognised the implications of its way of life preparing for the Stockholm Summit in 1972, but then shaped the global agenda in terms of current emissions which were going to grow in developing countries as they urbanised, rather than the scientifically correct stabilisation of cumulative emissions, to draw attention away from its own urbanisation and lifestyle.
Ideas and implications
•New ideas such as ‘climate justice’, coming from India have three strategic implications. First, a focus on drivers and patterns of natural resource, not just anthropogenic emissions, highlights that as against measuring emissions when considering solutions, the causes become important, in particular, the shift of the human population from rural to urban areas. Second, the IPCC report has reiterated that impacts such as a rise in sea level, variability of rainfall and temperature increases will not be reversible for some time even after emissions fall. The adverse effects of climate change, or adaptation, are no longer a local but a global concern. Third, consequently, multilateral cooperation will shift from common rules monitoring emissions based on international environmental law to common goals of human well-being as a universal human right based on a policy consensus.
•Shifting from environmental damage and its implications for well-being to comparable levels of well-being within global ecological limits provides a very different conceptual frame to understanding climate change and the negotiations. First, there is a need for a debate on what society values and whether societal priorities or market exchange and pricing mechanisms determine what is to be valued, produced, and consumed. Second, with consumption of the urban middle class now more important than production in terms of GDP, it has become clear that the rising prosperity of the poor and its need for infrastructure is not endangering planetary life support systems as stress on population and national emissions suggests. Third, with different civilisational values, consumption of the middle class in developing countries is less wasteful than in the first phase of urbanisation. These socio-economic trends are not captured in the models based on natural sciences designed for countries whose emissions have peaked with questionable global policy relevance.
For a new policy objective
•It took 25 years for the ‘Paris Agreement’ to reverse the defining feature of the ‘Framework Convention’, the division of countries into ‘annexes’, while providing for a ‘common cause’ instead of commitments. India’s proposal supports this evolution. Moving away from regulating emissions to recognising ecological limits makes the subsidiary bodies for scientific advice and implementation review established to ratchet-up commitments redundant. Sharing prosperity should be the objective of new intergovernmental mechanisms, with the involvement of the private sector, for example, supporting solar energy, joint research in new crop varieties and exchanging experiences on infrastructure viability. We now know that climate change is not just an environmental or sustainable development concern involving trade-offs. It requires a civilisational transformation in what we value, the way we live, and how we interact with one another.
📰 A way of diluting credit discipline
The RBI regulations on opening current accounts have operational and regulatory issues
•Some bank borrowers have gone to court demanding that it quash the Reserve Bank of India (RBI) circular dated August 6, 2020 on opening current accounts. The RBI has since extended the date for compliance to October 31, 2021.
•Diversion of funds is a major reason for large non-performing assets (NPAs). Internal diversion is for non-priority purposes such as limousines, plush offices, and vanity acquisition of companies. Funds can also be diverted to other firms, owned or controlled by the same group, friends or relatives. The first is the result of misguided strategies or muddled priorities. The second is an intention to defraud lenders, other creditors, and non-controlling shareholders.
•Current accounts with non-lending banks are an important channel for diversion. To prevent this, the RBI mandates a No-Objection Certificate (NOC) from lending banks before opening such accounts. Banks should verify with CRILC, the RBI credit database, and inform lenders. Banks should also obtain a NOC from the drawee bank when an account is opened through cheques.
The regulations
•The intentions of the impugned circular dated August 6, 2020 are unexceptionable. Widespread non-compliance with mandated safeguards forced the RBI to bar non-lending banks from opening current accounts for large borrowers. Thus, if borrowing is through a cash credit or overdraft account, no bank can open a current account.
•If a borrower has no cash credit or overdraft account, a current account can be opened subject to restrictions. If the bank’s exposure is less than 10% of total borrowings, debits to the account can only be for transfers to accounts with a designated bank.
•If total borrowing is ₹50 crore or more, there should be an escrow mechanism managed by one bank which alone can open a current account. Other lending banks can open ‘collection accounts’ from which funds will be periodically transferred to the escrow account.
•If the borrowing is between ₹5 crore and ₹50 crore, lending banks can open current accounts. Non-lending banks can open collection accounts. If borrowing is below ₹5 crore, even non-lending banks can open current accounts. The working capital credit should be bifurcated into loan and cash credit components at individual bank levels.
Operational issues
•The regulations involve many operational issues. First, if a borrower has an overdraft, how can there not be a current account? An overdraft is the right to overdraw in a current account up to a limit. Without a limit, a banker may allow a temporary overdraft.
•The second issue is that the circular forecloses such operational flexibility.
•Third, why should a bank with low exposure transfer funds to another bank when it can use it to adjust other dues with it?
•Fourth, share in borrowing is not static. Crossing the threshold both ways could happen often. It could be seasonal or monthly with salary payments or collection of dues. Nor are they smooth curves. Huge lumps accompany one-time heavy payments or large export proceeds.
•Fifth, there is a mismatch between what a borrower needs and the regulations allow. Support of non-lending banks through current accounts in other banks is required for large accounts. The circular rules out this possibility. But such support is available when the exposure is below ₹5 crore, when it may not be required.
•Sixth, transactions in an active current account enables a bank to monitor a borrower’s account, however small. The lack of such control was why large development financial institutions of yesteryear built up huge NPAs.
•Seventh, the regulation mandates splitting working capital into loan and cash credit components across all banks. Such a one-size-fits-all regulation does not factor in the purpose of the different facilities. A large company might avail itself of loans in Mumbai, but require current accounts with another bank in Assam where it might have a factory. Procrustean controls add costs with no concomitant benefits.
•There are other regulatory issues. First, it is more effective to base regulation more on principles that focus on outcomes than rules content with mere compliance. Rules are not flexible, do not provide for unforeseen circumstances, and can be easily circumvented. Second, regulation needs to use more generic terms. Terms such as Working Capital Term Loan might mean different things in different banks. Third, should regulation be designed to target exceptional events such as diversion of funds, and make the entire system bear the cost? Is it not better to leave management of such exceptional risks to the banks? Fourth, shouldn’t the costs of regulation be justified by the benefits? Finally, is more regulation the answer to non-compliance?
Implications for compliance
•There are also implications for compliance. When regulation ignores market practices, it lacks legitimacy, a construct from neo-institutionalist literature. When legitimacy is wanting, compliance suffers. The regulatee organisations will resort to what the literature calls cosmetic or creative compliance.
•Thus, a new banking practice of overdraft in fixed deposits has emerged. Another form of creative compliance could involve sanctioning unnecessary non-funded limits to artificially boost exposure. A bank could also merely rename current accounts as overdraft, as there is no bar in having a credit balance in an overdraft account. All this will have the counter-intuitive effect of diluting credit discipline rather than strengthening it.
📰 It’s time for Industry 4.0
Adopting Industry 4.0 technologies would make MSMEs more efficient and competitive
•The term ‘Industry 4.0’ was coined by the German government in 2011. Additive manufacturing, Internet of Things, Cyber Physical Systems, Augmented Reality/Virtual Reality and data analytics are some of the technologies associated with Industry 4.0. With the help of these technologies, the manufacturing industry will be able to make data-driven decisions. The reduced costs of electronics like sensors, transmitters, and cloud have allowed us to capture the data produced during operational activities. With the availability of advanced algorithms, this captured data can be analysed for decision-making in real time. Thus, Industry 4.0 integrated ‘data’ with manufacturing and Information Technology. To take advantage of data-driven decision-making, the governments of other countries also coined their own industrial initiatives like Industry 4.0. For example, the U.S. calls it Smart Manufacturing, China calls it Made in China 2025, and India refers it to as Make in India or Digital India.
The potential of MSMEs
•Micro, Small and Medium Enterprises (MSMEs) are expected to become the backbone of India as the economy grows larger. MSMEs form more than 95% of the industries in India, produce more than 45% of the total manufacturing output and employ more than 40% of the workforce. According to the Economic Survey 2020-21, over 6 crore MSMEs employ more than 11 crore people and contribute roughly 30% to the GDP and half of the country’s export. MSMEs are also ancillaries to larger enterprises, leading to a seamless supply chain integration. As a result, making MSMEs more efficient will be advantageous for the whole economy.
•However, MSMEs face challenges when it comes to adopting new technologies such as Industry 4.0. First, they lack awareness regarding Industry 4.0 and its benefits. They consider such technologies disruptive and having the potential to demolish their existing system. However, Industry 4.0 believes in improving the existing system. Scientific literature provides evidence of sensors and WiFi networks being integrated with old machines like lathes and mills to improve their performance. Second, MSMEs will need to make major financial investments to adopt Industry 4.0. Investing in the right set of technologies will need experts and consultants as well. Third, for any new technology to be adopted, an organisation requires a positive organisational culture and the support of people. MSMEs need to believe in the advantages that Industry 4.0 technologies can offer. Fourth, the frameworks and steps that can assist MSMEs in adopting Industry 4.0 technologies have been missing. In this regard, MSMEs need to understand the data they are producing from all their operational activities. Based on such data, their readiness can be evaluated. Finally, MSMEs should develop their own vision of Industry 4.0 technologies that they want to adopt and identify the relevant tools and practices they need for such a tailored vision.
Transcending impediments
•Though adoption of Industry 4.0 technologies by MSMEs requires transcending a labyrinth of impediments, it will make them more competitive as they will be able to offer world-class quality products to customers. Additionally, delivery timings and the flexibility to meet different needs will improve. As India joined the group of top 50 countries in the global innovation index for the first time in 2020, it is imperative for its MSMEs to embrace Industry 4.0 technologies without any hesitation. Proper sensitisation of the Government of India, higher education institutions, practitioners, entrepreneurs, industrial associations, trade unions, venture capitalists, consultants and research agencies would help to speed up this task. This becomes imperative given the manufacturing challenges abruptly posed by the COVID-19 pandemic when most of the healthcare infrastructure in India is MSME-dependent.
