RECENT DEVELOPMENTS IN INDUSTRIAL SECTOR

The recent developments in the Indian industrial sector

Policy and Regulatory Developments

Production-Linked Incentive (PLI) Schemes: The government continues to roll out PLI schemes across various sectors, including automobiles, electronics, textiles, and pharmaceuticals. These schemes offer financial incentives to companies to encourage domestic manufacturing and boost exports.
Focus on Ease of Doing Business: The government has taken several initiatives to improve the ease of doing business in India, such as streamlining regulations, simplifying compliance procedures, and promoting online services.
National Infrastructure Pipeline (NIP): The government is actively pursuing the NIP, a massive infrastructure development program aiming to invest ₹111 lakh crore (US$1.5 trillion) over five years. This initiative is expected to create significant opportunities for various industries.

Industry-specific Developments

Manufacturing Sector: The Indian manufacturing sector witnessed positive growth in recent months. However, concerns remain regarding global economic uncertainties and rising input costs.
Automobile Industry: The Indian automobile industry is experiencing a gradual recovery from the pandemic's impact. The demand for electric vehicles (EVs) is increasing, prompting investments in EV production and charging infrastructure.
Textiles and Apparel Industry: The textiles and apparel industry is showing signs of revival, driven by domestic demand and a rise in exports. However, the industry faces challenges like rising cotton prices and competition from other countries.
Pharmaceutical Industry: The Indian pharmaceutical industry continues to be a global leader in generics and is actively exploring opportunities in biosimilars and other segments.

Emerging Trends

Digitalization and Industry 4.0: The adoption of digital technologies like automation, artificial intelligence, and the Internet of Things (IoT) is accelerating across various industries, leading to increased efficiency and productivity.
Focus on Sustainability: There is a growing focus on sustainable practices in the industrial sector, with companies adopting cleaner production technologies and exploring renewable energy sources.
Skill Development: The government and industry are collaborating on initiatives to bridge the skill gap and equip the workforce with the skills needed for the changing industrial landscape.

1. Disinvestment of PSUs

The disinvestment of PSUs remains an ongoing and dynamic process in India, with recent developments indicating a renewed government focus on this strategy.

Increased Emphasis

The government has reiterated its commitment to disinvestment as a means to generate revenue, improve PSU efficiency, and attract private sector expertise.
Budget 2024 set a disinvestment target of ₹60,000 crore (US$ 7.8 billion) for the fiscal year 2023-24, aiming to raise funds for various social and infrastructure programs.

Key Developments

Strategic Sale of Central Public Sector Enterprises (CPSEs): The government is actively pursuing the strategic sale of several CPSEs across various sectors, including:
- Air India: The disinvestment process for Air India is ongoing, with the government seeking bids from potential buyers.
- Bharat Petroleum Corporation Limited (BPCL): The government's plan to sell its entire stake in BPCL is facing legal challenges, delaying the process.
- Shipping Corporation of India (SCI): The government has invited bids for the strategic sale of a 63.7% stake in SCI.
- Container Corporation of India (CONCOR): The government is considering the disinvestment of CONCOR, though the specific details and timeline are yet to be finalized.
Initial Public Offerings (IPOs): The government is exploring the option of listing some PSUs on the stock exchange through IPOs. This approach aims to raise capital while allowing public participation in ownership.
Minority Stake Sales: Selling minority stakes in PSUs to private investors is another strategy being considered. This can potentially raise funds without relinquishing complete control.

Challenges and Considerations

Global Economic Uncertainties: The ongoing global economic slowdown and geopolitical tensions pose challenges to attracting potential investors for disinvestment.
Labor Union Concerns: Disinvestment often raises concerns about job security and employee benefits, requiring careful management and transparent communication with stakeholders.
Selection of Strategic Buyers: Ensuring a fair and transparent process for selecting responsible and capable strategic buyers is crucial to ensure the success of disinvestment.

The disinvestment of PSUs remains a complex and evolving topic in India. While the government prioritizes this strategy, various factors and considerations influence its implementation and outcomes. Staying informed through reliable sources like the Department of Investment and Public Asset Management (DIPAM) and news outlets is crucial to understanding the latest developments and ongoing debates surrounding PSU disinvestment.

2. CAR for the operation of Drones in India

AR (Civil Aviation Requirements) for drone operations in India are defined by the Directorate General of Civil Aviation (DGCA).

Current Regulations

The DGCA replaced the UAS (Unmanned Aircraft System) Rules of 2021 with the liberalised Drone Rules, 2021, effective from August 26, 2021.
These regulations categorize drones based on weight:
- Nano drones: Less than 250 grams (no remote pilot license required for non-commercial use)
- Microdrones: Between 250 grams and 2 kg (remote pilot license required)
- Small drones: Between 2 kg and 25 kg (remote pilot license required with additional permits)

Key Requirements for Operating Drones

Remote Pilot License: Except for nano drones used for non-commercial purposes, all drone operations require a remote pilot license (RPL). This license is obtained after undergoing online training and passing an exam conducted by DGCA-authorized institutes.
Digital Drone Registration: All drones (except nano drones) must be registered digitally on the DGCA's digital platform (DGCA Drone Registry: [invalid URL removed]).
Unlock Zones and Flight Permissions: Drone operations are permitted only in designated "Unlock Zones." For flights outside these zones or specific purposes (e.g., beyond visual line of sight), additional permissions from the concerned authorities might be required. You can find the latest Unlock Zone map on the DGCA's website.
Height and Distance Restrictions: Drones cannot be flown above a certain altitude (typically 120 meters) or within a specified horizontal distance from airports and other sensitive areas.
Insurance: Third-party insurance is mandatory for all commercial drone operations and optional for non-commercial operations.

3. Online database containing GIs-enabled portal Maps land related information

The online databases with GIS-enabled portals in India that provide land-related information

Bhuvan (National Remote Sensing Centre)

Bhuvan is a comprehensive online platform developed by the National Remote Sensing Centre (NRSC) of India. It offers a variety of features, including

High-resolution satellite imagery of India
Thematic maps with information on land cover, soil types, and other land-related data
3D visualization of landscapes
Tools for creating custom maps and overlays

BhuNaksha (Department of Land Resources)

BhuNaksha is a national land record information system developed by the Department of Land Resources (DoLR). It aims to provide a single window for accessing land records across various Indian states. While functionalities may vary by state, the portal typically allows users to

Search for land records using various parameters like land owner name, survey number, or location
View land record details and maps (may require registration and login)
Download relevant land documents (availability might vary)

NGDRS (National Geospatial Data Repository System): The NGDRS is an initiative of the Department of Science and Technology (DST) to provide an open-source platform for sharing geospatial data. It offers access to various datasets, including, Land cover data, Soil maps, Administrative Boundaries and Elevation data.

State-Specific Land Record Portals: Many Indian states have developed their own online portals for accessing land records and other land-related information. These portals offer state-specific data and functionalities. You can search for the land record portal of your specific state by adding "land records" to the state name in your search engine.

GIS platforms of PSUs (Public Sector Undertakings): Some PSUs involved in land management or infrastructure development might have their own GIS platforms offering relevant land-related data. These platforms might require specific permissions or registration to access.

4. Chennai-Bangalore Industrial Corridor

The Chennai-Bangalore Industrial Corridor (CBIC) is an upcoming mega infrastructure project initiated by the Government of India. It aims to create a designated economic zone along the major industrial and commercial hubs between Chennai and Bangalore, fostering industrial growth and regional development.

Key features of CBIC

Route: The corridor stretches from Chennai, Sriperumbudur, Ponnapanthangal, Ranipet, suburbs of Vellore, Chittoor, Bangarupalem, Palamaner, Bangarpet, Hoskote, and finally to Bangalore.
Vision: CBIC aspires to become a prominent industrial and economic hub in South India, attracting investments, generating employment, and boosting regional trade.
Objectives:
- Accelerated Development: Promote rapid industrial development and urbanization along the corridor.
- Regional Integration: Enhance connectivity and economic collaboration between Tamil Nadu, Karnataka, and Andhra Pradesh.
- Infrastructure Upgradation: Improve transportation infrastructure with a focus on roadways, railways, and logistics facilities.
- Sustainable Growth: Encourage environmentally sustainable and socially responsible industrial practices.

Current Status

The project is still under development, with three major industrial nodes being identified:
- Tumakuru Industrial Area, Karnataka: This 8484-acre area is planned for development in three phases.
- Krishnapatnam Industrial Area, Andhra Pradesh: Specific details about this node are limited.
- Ponneri Industrial Node Area, Tamil Nadu: This 21,966-acre area is envisioned as a multi-sector industrial hub with a focus on engineering components manufacturing, logistics, and plastic industries.

Potential benefits of CBIC

Economic Growth: Creation of new job opportunities, attracting investments, and stimulating industrial activity in the region.
Improved Connectivity: Enhanced transportation infrastructure will facilitate efficient movement of goods and people, promoting trade and logistics.
Urban Development: Development of industrial townships and supporting infrastructure can lead to improved urban centres and living standards.
Technological Advancement: The corridor might attract investments in research and development, fostering innovation and technological advancements.

Challenges and considerations

Land Acquisition: Acquiring land for large-scale infrastructure projects can be a complex and time-consuming process.
Environmental Impact: Balancing industrial development with environmental sustainability requires careful planning and mitigation strategies.
Infrastructure Investment: Significant investment is needed for developing the planned infrastructure and ensuring its efficient operation.
Social Impact: The project needs to address potential social concerns related to the displacement of communities and ensure equitable benefits for all stakeholders.

The Chennai-Bangalore Industrial Corridor presents a significant opportunity for economic growth and regional development in India. However, careful planning, transparent execution, and addressing potential challenges are crucial for its successful implementation and ensuring a sustainable and inclusive development model.

5. Apex Corridor Developmental Authority

The Apex Corridor Developmental Authority (ACDA) is a proposed body aimed at coordinating and overseeing the development of industrial corridors in India. The ACDA is part of the larger vision to create a network of industrial corridors across the country, which are expected to serve as engines of economic growth by promoting industrialization, investment, and job creation.

Key objectives of the Apex Corridor Developmental Authority include

Coordination: The ACDA will coordinate with various stakeholders, including central and state governments, local authorities, industry bodies, and private sector entities, to ensure the smooth and efficient development of industrial corridors.
Planning and Implementation: The authority will be responsible for planning and implementing infrastructure projects within the industrial corridors, including the development of industrial parks, logistics hubs, smart cities, and other related infrastructure.
Investment Promotion: The ACDA will work towards attracting domestic and foreign investment into the industrial corridors, facilitating the setting up of industries and businesses, and promoting economic activities.
Skill Development: The authority will focus on skill development initiatives to enhance the employability of the local workforce and support the growth of industries in the industrial corridors.
Sustainability: The ACDA will ensure that the development of industrial corridors is sustainable and environmentally friendly, incorporating features such as green infrastructure, renewable energy, and efficient waste management.
Monitoring and Evaluation: The authority will monitor the progress of projects within the industrial corridors and evaluate their impact on the economy, employment, and overall development.

The Apex Corridor Developmental Authority is expected to play a crucial role in driving the development of industrial corridors in India, contributing to the country's economic growth and competitiveness.

6. Mining Surveillance System

The Mining Surveillance System (MSS) is an initiative of the Government of India aimed at curbing illegal mining activities and promoting responsible mining practices. It was launched by the Ministry of Mines in 2016 as part of the Digital India program.

The key objectives of the Mining Surveillance System are

Illegal Mining Detection: The MSS uses satellite-based remote sensing technology to monitor mining activities across the country. It helps in identifying and tracking illegal mining operations, including encroachments, unauthorized mining, and violation of mining lease conditions.
Real-Time Monitoring: The system provides real-time monitoring of mining sites, allowing authorities to detect and respond to illegal activities promptly. It helps in preventing environmental degradation, loss of revenue, and other negative impacts of illegal mining.
Data Integration: The MSS integrates data from various sources, including satellite imagery, ground surveys, and mining lease records, to create a comprehensive database of mining activities. This data is used for analysis, planning, and decision-making.
Transparency and Accountability: The system promotes transparency and accountability in the mining sector by providing accurate and up-to-date information on mining operations. It helps in ensuring compliance with mining laws and regulations.
Environmental Protection: By monitoring mining activities, the MSS helps in protecting the environment and natural resources. It enables authorities to take timely action against illegal mining that can lead to deforestation, soil erosion, water pollution, and other environmental hazards.
Revenue Generation: The MSS contributes to revenue generation by preventing revenue leakages caused by illegal mining. It helps in ensuring that mining companies pay royalties and other dues to the government.

The Mining Surveillance System is a technology-driven initiative that aims to improve the governance of the mining sector, promote sustainable mining practices, and protect the environment. It plays a crucial role in ensuring that mining activities are conducted responsibly and lawfully.

7. Coal Mitra

Coal Mitra is a web portal launched in 2016 by the Union Ministry of Coal in India. Its primary function is to facilitate the transfer of domestic coal reserves to more cost-efficient State/Centre-owned or Private sector generating stations, aiming to achieve the following:

Flexibility in Coal Utilization: By allowing coal transfer among different power plants, Coal Mitra aims to optimize coal usage based on factors like distance, transportation costs, and plant efficiency.
Reduced Generation Costs: Efficient coal allocation can potentially lead to lower generation costs, ultimately impacting the price of electricity for consumers.
Improved Power Plant Performance: Matching coal quality with plant requirements can contribute to better plant performance and emission control.

How Coal Mitra Works

Data Platform: The portal serves as a central platform where information about:

- Operational and financial parameters of each coal-based power plant (e.g., normative fixed and variable charges, margin available for additional generation)
- Quantity and source of coal supply to each power plant
- Distance of power plant from coal mines
- Availability of coal reserves at different mines

Transfer Mechanism

- State and central generation companies can list their surplus coal reserves on the portal.
- Companies facing coal shortage can browse listings and express interest in acquiring coal from the surplus sources.
- The platform facilitates communication and negotiation between interested parties for mutually agreeable coal transfer agreements.

Benefits of Coal Mitra

Cost Optimization: Efficient coal allocation can potentially reduce transportation costs and optimize overall power generation expenses.
Improved Plant Efficiency: Matching coal quality with plant requirements can contribute to better plant performance and potentially reduce emissions.
Transparency and Efficiency: The online platform provides a transparent and efficient mechanism for coal transfer negotiations between power plants.
Reduced Power Generation Costs: By optimizing coal allocation and potentially lowering generation costs, Coal Mitra can contribute to making electricity more affordable for consumers.

Coal Mitra is a crucial initiative aimed at improving the efficiency and cost-effectiveness of coal utilization in the Indian power sector. By facilitating optimal coal allocation, the program has the potential to benefit various stakeholders, including power companies, consumers, and the environment.

8. M-SIPS for Electronic Sector

The Modified Special Incentive Package Scheme (M-SIPS), launched in July 2012 by the Ministry of Electronics and Information Technology (MeitY), was intended to promote large-scale manufacturing in the Electronics System Design & Manufacturing (ESDM) sector in India. However, it's important to note that M-SIPS ceased accepting new applications on December 31, 2018.

While the scheme is no longer operational for new applications, existing M-SIPS beneficiaries continue to receive their sanctioned incentives as per the scheme guidelines for five years from the date of approval.

Objectives

Attract investment: M-SIPS aimed to incentivize investments in the domestic ESDM sector to reduce dependence on imported electronics and boost indigenous manufacturing capabilities.
Enhance competitiveness: By providing financial assistance, the scheme aimed to improve the cost competitiveness of Indian-made electronics compared to imported products.
Promote job creation: Increased manufacturing activity was expected to generate employment opportunities in the sector.

Incentives Offered

Capital subsidy: M-SIPS offered a capital subsidy of 20% for investments in Special Economic Zones (SEZs) and 25% for non-SEZs, for certain categories of electronic products and components.
Other benefits: The scheme also offered various other benefits like duty exemptions, easier access to credit, and simplified regulatory procedures in specific cases.

Reasons for Closure

Achievement of objectives: The government reportedly felt that the scheme had achieved its primary objectives of attracting investments and promoting domestic manufacturing.
Focus on new initiatives: The government shifted its focus towards other initiatives, such as the Production-Linked Incentive (PLI) scheme, which offers incentives based on incremental production instead of capital investment.

Current Scenario

Although M-SIPS is no longer accepting new applications, the PLI scheme has emerged as a key initiative to incentivize domestic production in various sectors, including electronics.
The government continues to explore various strategies to promote the growth and competitiveness of the Indian electronics industry.

Previous Year Questions

1. In India, the steel production industry requires the import of (upsc 2015) (upsc 2016)

(a) Saltpetre

(b) Rock phosphate

(d) All of the above

Answer: C

Mains

1. What are the forces that influence ocean currents? Describe their role in fishing industry of the world. (UPSC 2022)

2. Despite India being one of the countries of Gondwanaland, its mining industry contributes much less to its Gross Domestic Product (GDP) in percentage. Discuss. (UPSC 2021)

3. What are the main socio-economic implications arising out of the development of IT industries in major cities of India? (UPSC 2021)

4. Account for the present location of iron and steel industries away from the source of raw material, by giving examples. (UPSC 2020)

5. What is the significance of Industrial Corridors in India? Identifying industrial corridors, explain their main characteristics. (UPSC 2018)

6. Account for the change in the spatial pattern of the Iron and Steel industry in the world. (UPSC 2014)

7. Analyze the factors for the highly decentralized cotton textile industry in India. (UPSC 2013)

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RECENT DEVELOPMENTS IN INDUSTRIAL SECTOR

RECENT DEVELOPMENTS IN INDUSTRIAL SECTOR

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