JANUARY 20, 2002
 Economy
 Governance
 The Stockmarkets
 Banking & Finance
 Economic Revolutions
 Entrepreneurs
 Business Families
 Organisation
 The Consumer
 Media/Communication
 Society
 Cities
No Revival Yet
The CII-Ascon Survey of 110 manufacturing and 12 services sectors reconfirms what many were fearing: that an economic revival isn't around the corner yet. The culprit is the basic goods sector, which is given a 45 per cent weightage by the survey in the manufacturing sector..

Show Me The Money
It seems the Finance Minister Yashwant Sinha is going to have a tough time balancing the government's books this fiscal end. Estimates of gross tax collections for the period April-December 2001, point to a shortfall. Unless the kitty makes up in the last quarter, the fiscal situation will turn precarious.
More Net Specials
 
 
The Engines Of Revolution
A poor nation dares to dream of economic stardom, thanks to a few visionaries.
By R. Sridharan


For a revolution to be born, ''there must be a sense of malfunction that can lead to crisis'', Thomas Samuel Kuhn, the renowned professor of philosophy at the Massachussets Institute of Technology, once remarked famously. But in a country where malfunction is chronic and ennui near-epidemic, how is a revolution to be born? Not of malfunction, but a crisis. It took 40 lakh lives, two decades of research, and the threat of imminent famine before the first of our big ''revolutions'', the Green Revolution, would start winning in the mid-60s. Similarly, the other remarkable socio-economic revolution, Operation Flood, found governmental patronage only when it could no longer be ignored that even as the Indian farmer was starving, he was being forced to sell precious milk at a pittance to greedy middlemen.

But why is it that while mere urge among a few for a change in status quo will do to fuel a political revolution, marshalling the economic variety takes much more? The answer perphaps lies in the divergence of their objectives and means. A political revolution appeals to emotions, the economic one to reason. The first destroys, without guaranteeing the new order's utility or efficacy. The latter creates, it makes no promises, and works within the existing order, relying on small gains to multiply exponentially the collective benefit. One feeds on tears and blood, the other on sweat, ingenuity, and perseverence. Political upheavals alienate communities, and erode wealth. The ones wrought in a petri dish or a wafer of silicon, integrate. They create fabulous wealth.

Perhaps, a bigger reason is the limited power that men yield in influencing revolutions that science brings forth. It is easy to dispose of an impotent or tyrannical ruler. But how do you hasten the invention of the steam engine, the computer, the microprocessor, or the mapping of the human genome? You don't. Economic revolutions don't happen. They have to be moulded and chiselled at. Built painstakingly through research, experimentation, failure, learning and sharing. That's also the reason why their direct pay-offs are considerably more. Operation Flood, for instance, created Rs 24,000 crore in wealth each year between 1986 and 1996. That's Rs 240,000 crore in a decade alone. At their peaks, India's top four listed software companies-HCL Technologies, Infosys, Satyam Computers, and Wipro-created Rs 3,84,730.94 crore in shareholder wealth. By 2008, software exports should be earning India $87 billion (Rs 408,900 crore). The newcomer, still fermenting in up-start laboratories, could one day fetch as much or more.

It is easy to see where India would have been without its revolutions. Had a humble geneticist not managed to cross-breed a Mexican wheat variety with a local seed, India would probably be living, like somebody said, ship-to-mouth. Had not an electrical engineer staked claim to his share of the world's growing software business and, thus, paved the way for others, India may still be-in the firangi's mind-the land of fakirs and exotic, swarthy princes. Not the birthplace of Vinod Khosla or N.R. Narayana Murthy. Revolutions are good. Especially when they are wrought by the power of brain and not brawn.

The Revolution That Ended Hunger

Now, India needs a new revolution to make food affordable to all of tis poor millions

Barely four years ahead of Independence, India witnessed its worst food disaster: 40 lakh people died of hunger in the eastern part of the country, in what came to be called the Bengal Famine. Not surprisingly, then, the most important item on Independent India's agenda was food security. But the government spent the 50s and 60s only trying to bring more land under cultivation. While foodgrain production went up from 51 million tonnes in 1950 to 82 million in 1960, it wasn't enough to feed the country's burgeoning population. Another famine on a larger scale seemed imminent. At the beginning of 1960s what India needed was an agricultural miracle.

Fortunately for India, a geneticist, Norman Ernest Borlaug, was winning the battle against hunger in the 1950s. The high-yield disease-resistant wheat strain Borlaug had developed was making Mexican farmlands overflow with bumper harvests. By mid-60s, Borlaug's 'Green Revolution' was established, and he was itching to take his technology to places like India and China, both of which were facing food crises. Between 1958 and 1962, China lost three crore lives to famine. And India was dependent on the US for supplies.

Around the mid-60s too, a 40-year-old geneticist, M S Swaminathan, was pottering around in the labs of Delhi's Indian Agriculture Research Institute. Cross-breeding Borlaug's high-yielding variety with local species, he produced a winner wheat strain. The knowledge was extended to rice, and coupled with new irrigation techniques, double-cropping, fertilisers, pesticides, and better farm management practices, the Green Revolution produced spectacular results. By 1979, wheat output soared to 131 million tonnes from 94 million tonnes in 1968; and last year, India produced 196 million tonnes of foodgrains.

Despite its stunning gains, Green Revolution hasn't made food affordable to all. More than half of India's population make less than Rs 50 per day. That's one reason why 61 million tonnes of foodgrains is at the risk of rotting, even as millions go hungry. Also, the revolution's success was largely limited to Haryana and Punjab, and parts of Bengal. It is estimated that the world will have 8.3 billion people by 2025. And at the current rate of growth, India will have about 1.3 billion, and most of them those who cannot afford a proper diet. That means the next wave of Green Revolution will need to be born in the test tube of some biotech lab.

The paint shop at Hindustan Motors' early plant

Manufacturing: A Revolution Killed

One of the earliest industries to come up in India was textiles. The Crimean War (1854-56) and the American Civil War (1861-65) created a boom for jute and cotton products from India. It is estimated that between 1851 and 1882, 1,149 companies were registered in India. The boom continued until World War I, and its end created a new surge of demand. In 1926 alone, an estimated 34 cotton mills with a spindlage of 1,88,000 were set up. Many small factories for making safety matches, cement, and steel came up. But the biggest industrial event of the early 20th century India was the incorporation in 1907 of the Tata Iron and Steel Company, which produced its first steel five years later.

Large profits from trading operations whetted the appetite of marwari businessmen for industry. The Singhanias, the Birlas, the Dalmias, the Modis, and the Goenkas ventured into a range of industries, including automobiles, sugar, tea, and aluminium. The average number of people employed in factories grew from 5.4 lakh in 1900-01 to 29.5 lakh in 1945-46.

However, the manufacturing sector's contribution to the GDP was relatively small. It was only after Independent India released its industrial policy in 1948 that the government unveiled its plans of mega state-owned entreprises in nine core industries, including steel and telecom. But industrial licensing of 1961 and the Monopolies and Restrictive Trade Practices Act of 1969 virtually cut off air supply to private industry. A big reason why India makes almost all industrial products, but few to global scales. Some believe that manufacturing may have written its requiem past decade.

Biotech promises are big

The DNA Of Our Future

Three events happened post-70s that ensured biotechnology's place as the next big revolution. The first took place in 1973 when Stanford scientist Stanley Cohen managed to inject genes into a cell of another organism. But the two other events happened this decade. In 1997, Dolly the sheep was made out of a single cell from her mother, giving genetic cloning instant recognition and credibility. Finally, in June 2000, American scientists managed to sequence 3.1 billion chemical base pairs that make up the human DNA, opening a whole new world for biotechnology. What did India do during those three momentous decades? Except for setting up biotechnology labs, precious little.

Private enterprise suffered because only public biotech institutes were given access to easy capital and duty-free import of equipment. Approval processes were so convoluted that it was near impossible to get product approvals. According to the All India Biotech Association (AIBA), the only recombinant product approved so far is the Hepatitis B vaccine. Despite such problems, companies like the Bangalore-based Biocon India started low-end work way back in 1978. But in terms of products, there was little to show. Still, the industry has grown from Rs 500 crore in 1991 to Rs 11,000 crore in 2000-01, and in the past few years start-ups like Strand Genomics, Bharat Biotech, and Avestha Gengraine have hit the scene. A few biotech parks have also come up in Tamil Nadu and Karnataka. The biotech business is projected to rake in Rs 94,000 crore by 2005.

What's going to make that happen? For one, the convergence of it with biotech. New kinds of software and computing power will be needed to speed up and simplify the scientist's work. Then, the whole process of analysing the structure of proteins promises to be an industry in itself. There are other opportunities that will unfold as the biotech revolution progresses.

 

    PROLOGUE | ECONOMY | GOVERNANCE | THE STOCKMARKETS | BANKING AND FINANCE | ECONOMIC REVOLUTIONS | ENTREPRENEURS
BUSINESS FAMILIES | ORGANISATION | THE CONSUMER | MEDIA & COMMUNICATIONS | SOCIETY | CITIES


 
   

Partnes: BESTEMPLOYERSINDIA

INDIA TODAY | INDIA TODAY PLUS | COMPUTERS TODAY | THE NEWSPAPER TODAY 
TNT ASTROCARE TODAY | MUSIC TODAY | ART TODAY  | SYNDICATIONS TODAY