📰 India’s GDP to take a big hit due to pandemic-linked learning losses for students: ADB study
The decline would be the highest among those of South Asian countries, say analysts
•The gross domestic product (GDP) of India, which is among the countries with the longest school closures during the COVID-19 pandemic, would see the highest decline in South Asia due to learning losses for the young, a new working paper published by the Asian Development Bank (ADB) has reckoned.
•Starting with a $10.5 billion dent in 2023, the country’s economy could take a nearly $99 billion hit by 2030, translating into a 3.19% reduction in GDP from the baseline growth trends, according to the paper on ‘Potential Economic Impact of COVID-19 related School Closures’.
•India may thus account for over 10% of the global GDP decline of $943 billion estimated by the ADB on account of earning losses in 2030, with jobs for skilled labour expected to decline by 1%, and unskilled labour by 2% that year.
•“India has notable enrolment in secondary education and among students in rural areas. Pandemic-induced school closures have also been more extensive there,” the paper noted.
•Economies with a significant population of schoolchildren and college-going youth in rural areas and in the poorest and second wealth quintile — have been worst-hit as they lack access to stable Internet connection needed to study online.
•Learning and earning losses are significant because a notable portion of the impacted population will migrate to the unskilled labour force, the paper said. A large part of India’s work force is constituted by unskilled labour — 408.4 million as per the ADB paper’s estimates, compared to 72.65 million skilled workers.
•“In terms of absolute change, India experiences the highest GDP decline in South Asia, at about $98.84 billion in 2030. In percentage terms, its GDP decreases by 0.34% in 2023, 1.36% in 2026, and 3.19% in 2030,” the paper said.
•“School closures lead to declines in global GDP and employment. Moreover, the losses in global GDP and employment increase over time. Declines in global GDP amount to 0.19% in 2024, 0.64% in 2028, and 1.11% in 2030,” concluded the paper co-authored by Spencer Cohen, Sumathi Chakravarthy, Sindhu Bharathi, Badri Narayanan and Cyn-Young Park.
•India has the highest number of children enrolled in primary and secondary education among the Asian economies covered in the paper, at 255.74 million. The number of students in tertiary education were second only to China at 36.39 million, as per January 2022 data used for the research.
•While mooting greater investments in education and skills with a focus on narrowing the digital divide, the paper’s authors have said the most immediate challenge for governments is to help students recover “lost opportunities” by conducting assessments among impacted children.
•“It is important to identify the learning gap and specific learning needs of individuals. Effective learning programs should be devised to offer appropriate support such as tutoring or special classes and help them to bridge the learning gap,” it said.
•“Governments need to direct adequate funding and resources to young populations most affected by closures, such as those from the poor, rural and socially disadvantaged groups. It is important to keep school-age children in education as much as possible by providing financial support and incentives, while giving additional support for skills training to youth already out of school,” it added.
The Perarivalan judgment heeds federalism, but is there a danger of arbitrariness in remission?
•The Governor’s powers of pardon or remission under Article 161 of the Constitution have been in the spotlight with the Supreme Court judgment ordering the release of A.G. Perarivalan, one of the seven convicts in the Rajiv Gandhi assassination case. In 2018, the then Tamil Nadu cabinet had recommended to the Governor that all the seven convicts be released. The Raj Bhavan sat on the recommendation before forwarding it the President for advice. This month, the Supreme Court ruled that a Governor is bound by the State government’s advice in matters relating to commutation/remission of sentences under Article 161. The Court invoked its extraordinary power under Article 142 in ordering the release of Perarivalan, who had already spent over 30 years in prison. This has raised questions about the limits, if any, to a State government’s recommendation to the Governor to pardon or remit. In a discussion moderated by Krishnadas Rajagopal, P. Wilson and Kaleeswaram Raj discuss questions arising from the case, including those relating to the Office of the Governor, judicial delays and the Perarivalan judgment’s value as a precedent. Edited excerpts:
The Supreme Court judgment has been hailed as a victory for federalism and State autonomy by the Tamil Nadu Chief Minister. Will this line of reasoning not spur the tendency to endorse any arbitrary decision with respect to remission or pardon by a State cabinet in the future, even when it is vitiated by political or other considerations?
•P. Wilson: You are talking as if Governors always act reasonably. We have seen that Governors have become agents of the party at the Centre. We have seen State governments formed by non-BJP (Bharatiya Janata Party) parties facing difficulties with Governors who are obstructing the implementation of welfare measures by the popularly elected State governments. Governors are sitting on Bills passed by State legislatures without performing their duties under the Constitution. The decision of a State cabinet is binding on the Governor, according to the Constitution. The Supreme Court judgment in the Perarivalan case is a reiteration of that principle. The cabinet represents the people. So, people control the decisions. If the people do not like the cabinet’s decisions, they will vote the government out. The cabinet’s decisions are subject to judicial scrutiny. There is no danger of arbitrariness. In the present case, the apex court has approved the State cabinet’s decision to remit Perarivalan’s sentence by saying that the Governor should have acted on it. There can be no allegation of legal perversity in this case.
•Kaleeswaram Raj: The verdict has underlined the imperative of federalism in the context of gubernatorial amnesty. Article 161 is more about the Governor’s duty, rather than power. It is in no way inferior to the President’s role under Article 72, nor is it replaced by the latter. The Governor is generally bound by the cabinet decision. This does not, however, mean that even an arbitrary decision by the cabinet, vitiated by non-application of mind or extraneous considerations, would bind the Governor. This position is well-settled. The device of judicial review is the most effective check against such aberrations. The present judgment does not alter this position of law. It rests on its own peculiar facts, and there is no room for apprehension.
The court invoked Article 142 and directed Perarivalan to be released. This, ideally, should have been an order the Governor should have issued. Would it have been proper and desirable for the court to remit the matter to the Governor? Can Article 142 be stretched to this extent?
•PW: Not at all. The Governor had not done his duty under the Constitution. All authorities are bound by the decisions of the apex court. Gone are the days when we used to say the court cannot issue directions to Governors or even the President. Nobody is above the law. The Governor was given enough time, opportunity and warnings by the court. The Governor was blatantly disregarding the court’s observations. In such circumstances, the court is empowered under Article 142 to do complete justice. The judiciary is the final arbiter of the Constitution. If the Governor does not do his job, the court can pass appropriate orders.
•KR: The invocation of Article 142 is justified in the peculiar facts of the case, which are almost unique. The delay on the part of the Governor in accepting the State cabinet decision was enormous. It impacted the liberty of a person who was legally and constitutionally entitled to be released. The case was fought for decades. The Centre contributed to the delay by invoking its usual litigation strategies. The court might have been conscious of this processual injustice meted out to Perarivalan and felt the only way to undo it was to invoke Article 142 and release the prisoner. A further remittance to the Governor would have prolonged the litigation, which had already crossed all imaginable limits.
In the past, given the instances where gubernatorial offices were used by the Centre for political purposes, many have questioned even the need for the office of the Governor. Do you feel that the admonition against the Governor in this case should persuade us to rethink the requirement to have nominated Governors?
•PW: Certainly. See the Constituent Assembly debates on the manner of appointment of Governors. The makers of the Constitution never thought of giving Governors powers similar to those of elected representatives. Hence the post is a nominated one and not an elected one. It is dangerous when one man sits over the decisions of 234 elected representatives as it amounts to removing the basis of democracy. The powers of nomination should be re-considered.
•KR: Many people think so. I am reminded of the opinion of Prof. R. Venkata Rao of Andhra University who hinted that the Governor’s post is “useless when inert and dangerous when active”. Ironically, in the Perarivalan episode, even the inertness of the Governor proved to be dangerous. Yet, I do not share the view that misuse of a position per se is a reason for abolishing it. There are many duties which the Governor must carry out in a federal system. The Justice Sarkaria Commission wanted the Governor to act as “a friend, philosopher and guide” to the Council of Ministers. It wanted the Governor to be a “detached figure and not too intimately connected with the local politics of the State”. The point is to ensure that the Governor acts within the constitutional framework. Abolition of the post could create more problems than those it intends to resolve.
In recent times, the Supreme Court has been criticised for its lethargy in deciding important cases, especially cases with political overtones. Cases on demonetisation, abrogation of the special status for Jammu and Kashmir, validity of electoral bonds, etc., are some instances in which the court deferred adjudication and invited criticism. Do you think that the Perarivalan judgment marks a welcome change in the approach of the court?
•PW: Generally, these criticisms are unwarranted and made by people who do not know how hard the institution is working. Do you know that India has one of the lowest judge-to-population ratios in the world? The Union government is not appointing High Court and tribunal judges on time despite Supreme Court recommendations. During COVID-19, our country’s judiciary heard and disposed of an incredible number of cases. It functioned better than the judiciary in other countries. If not for the court’s orders, oxygen supply to the States would not have been equitable during the second wave. I see a court that is greatly sensitive towards violation of human rights. A person was kept in jail despite the state’s decision to release him. This is definitely a case that warranted the court’s interference.
•KR: The court is not static. It is an ever-changing institution depending on multiple factors like the individuals who run it and the overall constitutional climate. There have been some good judicial interventions in recent times from the Supreme Court. It rejected the stand of the Centre in important cases like the Pegasus issue and the sedition law. It may not be an ideal Supreme Court. Yet, it is a Supreme Court of possibilities.
What exactly is the value of the Perarivalan judgment in terms of setting a precedent?
•PW: First, the judgment holds that the duty of the Governor is to abide by the recommendations of the State cabinet while performing his functions, including the power to remit, suspend or commute sentences under Article 161. Second, an important finding is that the Governor need not have sent the matter to the President. Third, it is the duty of Governors to exercise their powers on time. Fourth, the judgment recognises the power of the state in matters of remission, commutation, etc. Fifth, the verdict upholds the human rights of prisoners.
•KR: The judgment is precise and clear. It runs into a mere 29 pages. It resembles the Brexit verdict of the U.K. Supreme Court that interfered with Boris Johnson’s decision to prorogue Parliament. Brevity is a universal virtue for constitutional analysis. The judgment shows a great amount of judicial discipline by adhering to the established principles of law. Yet, the court invoked Article 142 to do “complete justice”. The jurisprudential value of the judgment lies in the idea of “complete justice” applied in the given facts and circumstances. This is something unprecedented.
What are the lessons for our justice system from the Perarivalan case?
•PW: Justice delayed is justice denied. Each organ of governance has to work towards the preservation and promotion of human rights. We cannot accuse courts of delay without giving them the necessary infrastructure. The Chief Justice of a High Court, during an informal interaction during a visit by my Parliamentary Committee on Law and Justice, mentioned the judicial vacancies in various High Courts. He asked whether we would allow Parliament to function on only 50% strength without conducting elections. Then, why are High Courts left to function with 50% strength? If you give the judiciary the infrastructure, it will work faster. We need to have Regional Benches of the Supreme Court to reduce the workload. Increase the retirement age of judges to 70. If these changes are made, I can assure you of the results.
•KR: The judgment has multiple dimensions. It shows the importance of pursuit of the cause by litigants, their lawyers, the court and the media. It was a hard-won battle. At the end of the day, the judgment upheld the individual’s freedom and dignity, the basic promises of the Constitution. It is a judgment on fundamental rights, though it does not explicitly say so. It emancipates the individual(s) from the clutches of the mighty state while using the very apparatus of the state. That is itsbeauty and strength.
📰 Gyanvapi and the principle of non-retrogression
The Supreme Court of India must ensure the continuity of this doctrine of progressive realisation of rights
•Those among Muslims who were opposed to a negotiated settlement in the Babri Masjid case had always believed that it would not bring a closure to the most discordant chapter in India’s interfaith history. Indeed, such a concession would be the beginning of unending demands for the handing over of hundreds of other “disputed” mosques in India. After all, the Muslim conservatives argued, one of the many unnerving post-demolition slogans since 1992 was, “Yeh toh sirf jhanki hai, ab Kashi, Mathura baaki hai (This is only the trailer, now Kashi and Mathura remain),” Kashi and Mathura being metonyms for the Gyanvapi mosque in Varanasi and the Shahi Idgah mosque in Mathura, respectively.
Before the judiciary
•Their worst fears came true first in December 2019 when, a month after the pronouncement of the Babri Masjid verdict, a suit was filed in a local Varanasi court over the Gyanvapi-Vishwanath dispute; and then in April this year when a civil judge in Varanasi ordered the survey of the Gyanvapi mosque complex on a plea by five Hindu women demanding daily access to it for doing pooja.
•This was followed by a Mathura court’s ruling a few days ago upholding the maintainability of a suit filed for the removal of the Shahi Idgah mosque. And on May 24, a fresh suit was filed before a civil court in Varanasi by Lord Aadi Vishweshar Viraajman through Kiran Singh, a devotee, seeking the removal of the Gyanvapi mosque and exclusive ownership of the property.
•But what has surprised conservatives and legal scholars alike is the reluctance of the Supreme Court of India to stay such judicial interventions under the Places of Worship (Special Provisions) Act, 1991. On the contrary, on May 20, while transferring to the Varanasi District Judge, the petition challenging the maintainability of the suit filed by the Hindu side in the Gyanvapi case, Justice D.Y. Chandrachud orally observed that ascertainment of the religious character of a place may not fall foul of Sections 3 and 4 of the Places of Worship Act.
•One fails to understand the reasoning behind this obiter dictum. Section 3 of the Act bars the conversion of a place of worship of a religious denomination or any of its sections into a place of worship of a different section of the same denomination or of a different religious denomination. Section 4 declares, among other things, that the religious character of a place of worship existing on August 15, 1947 shall continue to be the same as it existed on that day, and any legal case pertaining to the conversion of the religious character of any place of worship pending as on August 15, 1947 shall abate.
Points to consider
•Given the clarity of these provisions, how would knowing the religious character of the Gyanvapi complex benefit the Hindu side now when the Places of Worship (Special Provisions) Act prohibits altering its status quo by virtue of the Gyanvapi mosque having existed there unchanged as a Muslim place of worship from well before August 15, 1947?
•Besides, what is the point in “ascertaining” Gyanvapi’s religious character when hardly any disagreement exists among historians on the fact that it was constructed on the ruins of the Vishwanath temple? In his monograph, Temple desecration and Muslim States in Medieval India, Richard M. Eaton writes that in 1669, Aurangzeb destroyed that temple when he suspected that its builder, Jai Singh, the great grandson of Raja Man Singh, had helped Shivaji escape from imperial detention.
More a show of power
•According to Eaton, ruling dynasties in those days derived legitimacy from state deities (rashtra devta) installed in royal temples. Thus, for conquerors, desecrating or destroying such temples and occasionally replacing them with their own place of worship had the effect of detaching a defeated king from the most prominent manifestation of his dynastic sovereignty. It also sent out the dispiriting message that the king no longer enjoyed the protection of his deity because the victor had replaced it with his own.
•However, temple destruction in medieval India was more a show of brute power than an act of religious bigotry because temples with no royal linkage were considered politically irrelevant and left unharmed, states Eaton.
•Thankfully, intellectual evolution has taken us so far away from this period in history that we now reprehend the violent cold-bloodedness and acquisitive expansionism it normalised. But we do not seem to have progressed enough to equally avoid displaying the kind of atavism that tries to demonise, repress and politically emasculate vulnerable communities for the “crimes” of their imagined ancestors.
On non-retrogression
•In modern societies, this primitiveness necessitated the principle of non-retrogression, or the doctrine of progressive realisation of rights. Article 2(1) of International Covenant on Economic, Social and Cultural Rights (ICESCR) — India is a signatory — seeks to “achieving progressively the full realisation of the rights recognised in the Covenant by all appropriate means, including particularly the adoption of legislative measures”.
•The Covenant states in its preamble that the ideal of free human beings enjoying freedom from fear and want can only be achieved if conditions are created whereby everyone may enjoy his economic, social and cultural rights, as well as his civil and political rights.
•A five judge Bench of the Supreme Court, in its September 2018 Navtej Singh Johar judgment (AIR 2018 SC 4321) offered, between pages 111 and 118, an excellent analysis of this doctrine. It stated that “in a progressive and an ever-improving society, there is no place for retreat”, and therefore, “the State should not take measures or steps that deliberately lead to retrogression on the enjoyment of rights either under the Constitution or otherwise”. The Court also warned that “the sustenance of fundamental rights does not require majoritarian sanction”.
•In the November 2019 Babri Masjid verdict (2019 SCC OnLine SC 1440), another prominent five judge Bench reiterated this principle in a 10-page discussion on the Places of Worship Act, and reminded the nation that non-retrogression “is a foundational feature of the fundamental constitutional principles of which secularism is a core component”. The Act is thus “a legislative intervention which preserves non-retrogression as an essential feature of our secular values”.
•The Bench, therefore, cautioned that historical wrongs cannot be remedied by people taking the law into their own hands because, through the Places of Worship Act, “Parliament has mandated in no uncertain terms that history and its wrongs shall not be used as instruments to oppress the present and the future”. This law, the Bench stated, imposes “a positive obligation to maintain the religious character of every place of worship as it existed on 15 August 1947”.
•Interestingly, Justice Chandrachud was a member of both the Benches mentioned which took great pains to expound the ratio decidendi behind their use of the principle of non-retrogression to permanently decriminalise consensual adult gay sex, and extol the significance of the Places of Worship Act in preventing our relapse into historicist primalism.
Maintain the harmony
•One hopes Justice Chandrachud will reconsider — in light of the Supreme Court’s thought-provoking views on non-retrogression — his own opinion on the necessity of ascertaining the religious character of the Gyanvapi complex. For such an exercise could potentially create conditions opposed to those envisaged by the ICESCR and end up disturbing communal harmony across India at a time when it is most needed. For the same reason, the Parliament must retain the Places of Worship Act without amending or repealing it.
📰 Sighting the finishing line in measles-rubella elimination
There are special reasons why measles-rubella elimination can be achieved together by July-August 2023
•Many would remember the school-based campaigns of measles-rubella (MR) vaccination of children from 5 to 15 years, conducted in all States, in 2017. Success was good in a few States, but not in others. School managements, teachers, children themselves and parents were not informed of the basis of this new programme, which was a deviation from the past. There were some unanswered questions: why was it up to 15 years while the Universal (childhood) Immunisation Programme (UIP) covers only those up to five years? Why administer the rubella vaccine that was not in the UIP list in 2017? Why should children who have had one dose of the measles vaccine get another dose? Why are schools instead of health-care centres used for vaccination?
Hurdle of poor information
•The Government decided to eliminate measles and rubella from India by the year 2020 — having missed the earlier set target of 2015. So, in 2017 there was an urgency to accelerate efforts. The basic plan was to create a very high level of vaccination-induced immunity against both diseases, by inoculating MR vaccine. To cover immunity gaps after one dose of measles vaccine, a second dose was necessary. For epidemiological reasons (explained later), rubella vaccination had to cover children up to 15 years. School registration and attendance are high in all States and as a programme, it was easy to seize the opportunity to vaccinate children in schools. We knew that the MR vaccine was safe from any serious adverse event following vaccination/immunisation (AEFI); hence a school-based vaccination programme was very convenient for all. These were all excellent reasons, but due to a lack of information given to the public there was much anxiety —and even antipathy towards — in many places, about the programme, in the minds of parents and school authorities.
•The COVID-19 pandemic stole two years from the programme. So the MR elimination target was re-set to 2023. Today, we are at the threshold of a new gargantuan project. We shall begin at the beginning and explain the details for all concerned to be well informed.
The basics
•MR elimination is defined as zero transmission of measles and rubella viruses, evidenced by zero clinical disease, sustained over three years. The two arms of intervention are vaccination and surveillance. Surveillance helps identify places where either virus is still in transmission, so that vaccination can be pinpointed there to stop further spread. Two doses of the MR vaccine covering at least 95% children below five years — the first dose between nine and 11 months and second dose ideally in the second year of life — should suffice. The disease is basically fever plus a red rash on the skin. A fever-rash combination has several causes and a throat swab, urine and/or blood sample are collected and tested in the laboratory for identifying measles or rubella.
District as nerve centre
•The ideal population-cum-administrative unit for efficiently implementing all activities towards MR elimination is the district; the whole country reaches the finishing line when all 773 districts achieve success. Clinical and laboratory surveillance and vaccination have to be sustained, as either virus, especially measles virus, could be imported from outside; that should be immediately detected and interrupted.
•Every district has excellent infrastructure to manage the UIP. If the administration, under the active leadership of the District Magistrate or District Collector, activates the Task Force mechanism overseeing the UIP that is managed by the District Immunisation Officer, the MR elimination target can be reached within six to nine months from start. All districts in a State can be galvanised by the State Government, and all States can be supported by the Immunisation Division of the Union Ministry of Health and Family Welfare.
Long-term impact
•Why should measles be eliminated? In the pre-vaccination era, while polio paralysed about 1% of all children before the age of five, measles actually killed 1% of all under-five children. During measles outbreaks, the case-fatality rate was about 10%-15%. Children who recovered would have lost weight as well as the steady momentum of cognitive development and scholastic performance. Measles affects the immune system rendering the child vulnerable to other infectious diseases, leading to high mortality over the next two to three years. Indeed, there has been much discussion among experts whether measles should have been targeted first for global eradication instead of polio.
•Why should rubella be eliminated? The rubella virus is a slower transmitter and the risk of rubella is extended from childhood through adolescence into the reproductive age range. In most individuals, rubella infection is either without symptoms, or with a short fever and a skin rash that is less pronounced than that of measles. Unfortunately, if a pregnant woman gets infected, the virus has a tendency to cross the placenta and damage the developing fetus’s eyes, brain, heart and other tissues. Affected babies are born with severe birth defects such as cataracts, deafness, heart defects and developmental delay — this is ‘congenital rubella syndrome’ (CRS). Fortunately, CRS is preventable with vaccination if given prior to pregnancy. So, in the 2017 school-based vaccination campaign, 15 years was chosen to create immunity in girls for assured future protection, and in boys to prevent community spread.
•There are special reasons why MR elimination could be achieved together. The MR vaccine is a combined product, targeting two diseases in one shot. Fever and rash surveillance covers both diseases. Measles elimination is of very high priority; piggy-backing rubella elimination is opportunistic.
•We are in May 2022, with 19 months available to achieve the target. In spite of the pandemic, nationally, the UIP has maintained about 85% MR second dose coverage below five years. Thus, we are in a take-off position to reach the finishing line by July-August 2023, still leaving four to five months of buffer time to patch up any “last minute” shortfalls and challenges.
•This project design is awaiting final approval by the Government of India. Using the cooperation of parents, health-care personnel at all levels, opinion leaders, influencers, the media, non-governmental organisations such as the Rotary and Lions, all can and must play a role in making this district-by-district programme a story of success.
📰 Knotty supply chains deepen global chip shortage
How did the world reach to a point of global chip shortage? What are the hurdles associated with overcoming this shortage?
•During the pandemic, people switched to work from home, and children connected to schools through laptops. This shift led to a surge in demand for laptops and tablets.
•High consumer demand for low-end products, coupled with large orders from tech firms chocked chip makers whose factories were also closed during lockdowns.
•When the pandemic began, carmakers stopped requesting chips from suppliers due to low demand for new vehicles. And now, as they ramp up production to meet consumer demand, chip makers are down on supply because they have cut deals with other industries.
•If the pandemic had a partner in crime, it must be the global chip shortage. The duo has hit established economic systems world-wide, and made several organisations scale back production and rework their manufacturing and supply chain processes.
•Toyota Corporation on Tuesday apologised to its suppliers and customers a third time in less than two months for delaying making new vehicles and changing production plans for the June ending quarter. On March 17, the Japanese automaker said it is pressing the brakes on production targets to rework a plan that will not max out factory capacity, push employees to their limits, and make do through overtime work. A month later, the Japanese automaker cut its global production target for the period between April and June by 1,00,000 to 7,50,000 vehicles in May. And then again, on May 24, it said ,“Due to the impact of semiconductor shortages, we have adjusted our production plan by tens of thousands of units globally from the number provided to our suppliers at the beginning of the year.”
•CEOs of AMD, Nvidia and Intel have said at different forums last year that the chip situation will remain tight for the rest of 2022.
Genesis of shortage
•After reaching its peak in 2011, the laptop market growth slowed down with the rise of alternatives such as smartphones and tablets. Then, the pandemic hit. People switched to work from home, children connected to schools through laptops, and get-togethers happened over video calls. This shift led to a surge in demand for laptops and tablets. The stay-at-home rules also made several people pick up console-based gaming. This demand was driven by console hardware, and subscription-based mobile games. Each of these devices were in high demand and are run on thumbnail-sized semiconductors, performing various functions on a single device.
•Manufacturers produce them as 200mm or 300mm wafers. These are further split into lots of tiny chips. While the larger wafers are expensive and mostly used for advanced equipment, the devices that were in high demand needed smaller diameter wafers. But the manufacturing equipment needed to make them were in short supply even before the pandemic began. That’s because the industry was moving in the direction of 5G and advanced communication, which required expensive wafers.
•High consumer demand for low-end products, coupled with large orders from tech firms chocked chip makers whose factories were also closed during lockdowns. As the industry gradually tried to pull itself out of the supply crunch, and logistical complexities have exacerbated the problem.
•The lockdown has had a domino effect on global supply chains. Separately, Russia’s invasion of Ukraine has strained exports of essential commodities used to make chip sets. Moscow supplies rare materials like palladium, and Kyiv sells rare gases to make semiconductor fab lasers. This combination is required to build chipsets that power a range of devices, from automobiles to smartphones.
Intricate networks
•About a decade and half back, semiconductors barely drew attention from large companies that have now come to rely on the thumbnail-sized semiconductor piece. During this period, firms developed a system to make chip sets. The system was made by interconnecting several parts of the world to make a single device. It is what we now call as the global supply chain. While it is hard to pinpoint when this system was developed, its roots go back to the time when companies began cutting up their businesses into smaller parts and outsourcing them to places where land, labour or capital was cheap.
•Semiconductor-making firms applied this knowledge to their industry. The process to make a chip was divided into front-end and back-end parts. Wafer fabrication and probe are generally referred to as front-end operations, and assembly and test as back-end operations. The front and back-end processes were further broken down into micro units, and were spread out across the globe, creating a global chip-making ecosystem. This ecosystem is so vast that each segment of the semiconductor manufacturing involves roughly 25 countries in the direct supply chain, and 23 countries in allied functions, according to a joint study by Global Semiconductor Alliance and Accenture.
•The report estimates a semiconductor-based product could cross international borders about 70 times before finally making it to the end customer. Wafer fabrication is the most globally dispersed, with 39 countries directly involved in the supply chain and 34 involved in allied activity. They provide services like photolithography, etching and cleaning. Designing happens across 12 countries; product testing and manufacturing each are done across 25 countries.
•That’s a complex, interconnected ecosystem with its own ebb and flow. The industry faced its share of glut and shortage in the past decade as consumer preferences shifted from one electronic fad to another. And this time, around the shortage in the system coincided with the pandemic. It also came at a time when the semiconductor supply chain’s chief strength became its weakness.
Strength becomes weakness
•Developed during the World War II era, Just-In-Time (JIT) was used by Japanese companies that lacked resources and space to rebuild factories by carefully using what they had in the leanest way as possible.
•Taiichi Ohno, the father of Toyota Production System, later conceptualised JIT and the Kanban technique to create an efficient production system for automobiles. Most companies, including chip makers, used JIT to run their supply chains smoothly and efficiently. JIT lets firms take inputs from suppliers only when they are needed. It helps them cut inventory storage cost, shorten production cycles and free up cash flow for other investment activities.
•This important aspect of supply chains back fired due to the pandemic, and the recent geopolitical events. When the pandemic began, carmakers stopped requesting chips from suppliers due to low demand for new vehicles. And now, as they ramp up production to meet consumer demand, chip makers are down on supply because they have cut deals with other industries. As the geopolitical events in Central Europe and production shutdowns in China continue to add pressure to the already complicated semiconductor supply chain, the chip shortage tunnel only seems to be getting longer.
•Intel CEO Pat Gelsinger, in an interview to Bloomberg TV at Davos, Switzerland, said, “The supply and demand will balance out only in 2024.” He also pointed out that the European Chips Act (45 billion euros) and CHIPS for America Act ($52 billion) would incentivise fab makers to set up their units in these regions and balance. Together, these two will enable the semiconductor manufacturers to have equal investments in the East and West by 2030, from the current tally at 80% in Asia, and 20% in Europe and the U.S.
•Perhaps semiconductor-hungry firms may see light at the end of the tunnel when the shift in chip production capacities show up more prominently in the West.
📰 Green hydrogen: Fuel of the future?
What is green hydrogen ? Why is India attempting to pursue it and how much is it producing?
•Green hydrogen is produced through electrolysis using renewable sources of energy such as solar, wind or hydel power.
•India has just begun to generate green hydrogen with the objective of raising non-fossil energy capacity to 500 gigawatts by 2030. On April 20, India’s first 99.99% pure green hydrogen pilot plant was set up in eastern Assam’s Duliajan.
•Green hydrogen can be stored for long periods of time. The stored hydrogen can be used to produce electricity using fuel cells.
•The story so far: At the World Economic Forum in Davos, Switzerland, a few days ago, Minister of Petroleum and Natural Gas Hardeep Singh Puri said India will emerge as the leader of green hydrogen by taking advantage of the current energy crisis across the globe. His assertion came almost a month after Oil India Limited (OIL) commissioned India’s first 99.99% pure green hydrogen plant in eastern Assam’s Jorhat.
What is green hydrogen?
•A colourless, odourless, tasteless, non-toxic and highly combustible gaseous substance, hydrogen is the lightest, simplest and most abundant member of the family of chemical elements in the universe. But a colour — green — prefixed to it makes hydrogen the “fuel of the future”. The ‘green’ depends on how the electricity is generated to obtain the hydrogen, which does not emit greenhouse gas when burned.
•Green hydrogen is produced through electrolysis using renewable sources of energy such as solar, wind or hydel power. Hydrogen can be ‘grey’ and ‘blue’ too. Grey hydrogen is generated through fossil fuels such as coal and gas and currently accounts for 95% of the total production in South Asia. Blue hydrogen, too, is produced using electricity generated by burning fossil fuels but with technologies to prevent the carbon released in the process from entering the atmosphere.
Why is India pursuing green hydrogen?
•Under the Paris Agreement (a legally binding international treaty on climate change with the goal of limiting global warming to below 2°C compared to pre-industrial levels) of 2015, India is committed to reducing its greenhouse gas emissions by 33-35% from the 2005 levels. At the 2021 Conference of Parties in Glasgow, India reiterated its commitment to move from a fossil and import-dependent economy to a net-zero economy by 2070. India’s average annual energy import bill is more than $100 billion and the increased consumption of fossil fuel has made the country a high carbon dioxide (CO2) emitter, accounting for nearly 7% of the global CO2 burden. In order to become energy independent by 2047, the government stressed the need to introduce green hydrogen as an alternative fuel that can make India the global hub and a major exporter of hydrogen.
•The National Hydrogen Mission was launched on August 15, 2021, with a view to cutting down carbon emissions and increasing the use of renewable sources of energy.
How much green hydrogen is India producing?
•India has just begun to generate green hydrogen with the objective of raising non-fossil energy capacity to 500 gigawatts by 2030.
•It was on April 20, 2022 that the public sector OIL, which is headquartered in eastern Assam’s Duliajan, set up India’s first 99.99% pure green hydrogen pilot plant in keeping with the goal of “making the country ready for the pilot-scale production of hydrogen and its use in various applications” while “research and development efforts are ongoing for a reduction in the cost of production, storage and the transportation” of hydrogen.
•The plant was set up at the petroleum exploration major’s Jorhat pump station, also in eastern Assam.
•Powered by a 500 KW solar plant, the green hydrogen unit has an installed capacity to produce 10 kg of hydrogen per day and scale it up to 30 kg per day.
•A specialised blender has also been installed for blending green hydrogen produced from the unit with the natural gas supplied by the Assam Gas Corporation Limited and supplying the blended gas to the Jorhat area for domestic and industrial use.
•OIL has engaged experts from the Indian Institute of Technology-Guwahati to assess the impact of the blended gas on the existing facility.
What are the advantages of hydrogen as a fuel?
•The intermittent nature of renewable energy, especially wind, leads to grid instability. Green hydrogen can be stored for long periods of time. The stored hydrogen can be used to produce electricity using fuel cells. In a fuel cell, a device that converts the energy of a chemical into electricity, hydrogen gas reacts with oxygen to produce electricity and water vapour. Hydrogen, thus, can act as an energy storage device and contribute to grid stability. Experts say the oxygen, produced as a by-product (8 kg of oxygen is produced per 1 kg of hydrogen), can also be monetised by using it for industrial and medical applications or for enriching the environment. The possibilities of hydrogen have made many countries pledge investments with Portugal having unveiled a national hydrogen strategy worth $7.7 billion in May. Renewable developers see green hydrogen as an emerging market and some have targeted the transport sector, although electric vehicles have begun to catch the imagination of consumers today.
