Date : 22/09/2023

Relevance – GS Paper 3 – Indian Economy – Developmental Strategy

Keywords – ISRO, IITs, IIMs, Vikram Sarabhai

Context

The phrase "Aim for the moon" has come to symbolize extreme ambition and boldness in pursuing ambitious ventures. When India embarked on its space research journey in the 1960s, many skeptics deemed it reckless for a young, struggling nation to allocate limited resources to such an uncertain endeavor. However, history has proven them wrong. In a matter of decades, India became the first nation to successfully land a rover on the moon's south pole and launched missions to study the sun. These remarkable achievements, though, raise a persistent question: How do they align with the enduring poverty and destitution experienced by millions of Indians?

India's Pioneering Efforts in Space and Technology

Even before the establishment of the Indian Space Research Organization (ISRO) in 1969, India had a significant space science research program. Coordinated by the Department of Atomic Energy, founded in the early 1950s, these initiatives were not isolated. The 1950s and 1960s saw the establishment of five Indian Institutes of Technology (IITs), which rapidly evolved into globally respected academic institutions. Additionally, the first two Indian Institutes of Management (IIMs) were inaugurated in 1961. During this period, India also created several public sector units across diverse industrial domains, including steel, fertilizer, machinery, pharmaceuticals, and petrochemicals.

The overarching goal was to leverage technology to overcome the historical challenges stemming from two centuries of colonialism. Visionaries like Vikram Sarabhai, leader of India's space program, foresaw the potential of satellites for building a nationwide telephone system and providing agricultural and health education. This period can be characterized as a 'moonshot' approach to development, deploying modern industrialization to break free from the past's shackles.

Challenges and Criticisms of India's Development Strategy

Despite its boldness, India's moonshot development strategy faced criticism on two fronts. Firstly, it relied heavily on public investment, which some economists considered unsustainable. They argued that India, as a labor surplus country, should have focused on labor-intensive industries like garments and footwear, rather than allocating scarce resources to capital and technology-intensive sectors.

Secondly, critics contended that the time and effort required for new technologies to mature were too long and steep for private entities to lead the charge. India experienced numerous setbacks in its space missions, especially in the early years, and public funding played a pivotal role in ensuring continuity despite short-term commercial viability concerns. This illustrates the necessity of public sector support for developing technologies with 'public good' attributes, such as the internet, which originated from US government-funded research with military objectives in the late 1950s.

India's Technological Capabilities and Private Enterprise

India's investments in technology, supported by the state, laid the foundation for the flourishing of private enterprise in sectors like pharmaceuticals, information technology, and the space industry. Professionals educated in India's public universities have assumed leadership positions globally, enhancing India's strategic significance. This synergy between public investments and private enterprise demonstrated the effectiveness of the moonshot development strategy in building technological prowess.

Inequalities as a Barrier to Progress

However, the moonshot development strategy's limited success was not due to excessive government involvement in technology but rather to its inability to effectively address inequalities and promote social development. Independent India failed to implement a successful land redistribution program, leading to persistently low asset ownership among socially oppressed communities, including Dalits or the Scheduled Caste (SC) population. This lack of assets translated into barriers to acquiring education, exacerbated by India's underinvestment in basic education for the masses.

As a result, historical inequalities persisted in the labor market, with better-paying jobs primarily going to privileged groups that had greater access to higher education. In 2021-22, 38.2% of all SC workers engaged in casual labor, predominantly manual work, compared to 11.2% for workers from the general category castes. This contrasted sharply with East Asian countries like Japan and China, where land reforms and other measures had created relatively egalitarian social structures by the 1950s, providing a foundation for subsequent economic and social progress.

The Impact of Inequalities on Industrial and Economic Growth

The persistence of inequalities in India has negatively impacted industrial and economic growth. Domestic demand has been lopsided, primarily coming from the upper-income classes, which constitute a small segment of the population. This skewed demand has hindered the growth of manufacturing high-quality, mass-consumption goods, including food products and garments. Entrepreneurship, too, has emerged from a narrow social base, limiting diversity and innovation.

The Way Forward

To move forward, India must critically assess the strengths and weaknesses of its ambitious post-independence development strategy. The bold approach of building technological and industrial capabilities with generous state support was the right path. It is crucial for India to reinstate such efforts, especially in rapidly growing economic sectors like semiconductors and biotechnology. The belief that industrial policy has no role in a globalized economy, which gained prominence after 1991, must be reconsidered, particularly when countries like the United States and China are providing substantial government support to their industries.

Simultaneously, India must redouble its efforts to make economic growth more inclusive and broad-based. Ensuring access to education, especially higher education, for all segments of society, including the marginalized, is essential. India's mission to use technology as a catalyst for development is only half complete. For it to reach its full potential, the nation's billion-strong population must acquire the social and human capabilities necessary for upward mobility, akin to achieving a lunar takeoff in economic progress.

Conclusion

India's moonshot development strategy, marked by ambitious technological pursuits supported by state investment, has yielded remarkable achievements in space exploration and technology. However, persistent inequalities and a failure to address social development have hindered the nation's overall progress. To chart a successful course forward, India must maintain its commitment to technological advancement with state support while simultaneously working to reduce inequalities and promote inclusive growth. By doing so, India can achieve a true economic lift-off that benefits all its citizens, regardless of their background or social status.

Source – The Hindu