The Tribune...50 years of Indian Independence.....Future

5 0 O Y E A R S O O F O I N D I A N O I N D E P E N D E N C E
Looking Ahead: This issue was published on July 31, 1998

Building economic strength should be our top priority
Innovation can make India a super power
by Subash K Bijlani
Only nuclear energy can give us long-term security
An economically strong India can dictate terms
by R. Chidambaram and R.K. Sinha

US interests will be better served by ‘accommodating’ India
We view N-arms as a means of ultimate defence
by P.M. Kamath

We are likely to witness criminalisation of tensions
Most of the problems emanate
from social changes
by Rajni Kothari

Land grabbing increasing
at an alarming rate
Tribals’ alienation will lead to
armed conflicts with the state
by K.D. Jha

Building economic strength should
be our top priority
Innovation can make India a super power
by Subash K Bijlani

Knowledge is the new currency of international trade and commerce. Neo-classical economic theory attributed growth in output to increase in the factors of production, namely, labour and capital. The new paradigm is that the economic power, increasingly seen as the basis of new political clout, arises out of a strong technology muscle of the nation.

A nation’s advantage in trade no longer flows merely out of its natural endowments, e g, raw materials, labour, capital and land. Over-whelming empirical evidence shows that the per capita economic growth of the industrialised countries has been driven by innovation resulting in technological progress, and not by aggregate capital investment per se. Recent experience of nations shows that the contribution of raw materials, and in many cases of labour, has steadily declined in providing the competitive edge to the products.

This is perhaps best exemplified in micro-processor technology where the raw material content has steadily fallen to an insignificant proportion of its price. The big strides of the Asian `tigers’ is not because of their natural resources. Malaysia’s prosperity is no longer based on tin and rubber. Countries rich in natural resources, on the other hand, for example oil producing countries of Middle East, are not great economic powers. Technology supremacy is the key to success. Increasingly, the contribution comes from value addition through technology. While the market for capital is becoming freer with nearly $400 billion moving across the globe every day, technology is highly guarded and hardly ever transferred.

A dramatic example of how nations compete on their technological edge is given by the well-established Swiss watch industry . The base of their technical excellence was rendered obsolete virtually overnight with the advent of the electronic quartz watches. The precision of the quartz watches could not be met by that of the best mechanical watches. They were also cheaper to produce. The irony in this case is that the concept of new technology of quartz watch had emanated from Switzerland itself!. They were unable to identify its potential. Many Swiss watchmaking companies were forced out of market. Faced with technological threat, several ailing companies of this industry got together and subsequently used technology as a competitive weapon. The new firm, ETA, created "Swatch". The revolutionary product design was backed by an unconventional manufacturing and assembly process. They resorted to new technologies such as the micro-injection of plastic under pressure, the use of polymethylemetracrylate to obtain an extremely resistant glass, a new technique for welding the glass and case together to make the watch totally water-proof, etc.

We will witness similar examples in a number of our industries. The traditional sports goods industry in Jalandhar, for example, faces threat as new materials and manufacturing processes lead to improved quality at lower costs. The tennis racket industry in Sialkot has faced extinction with the advent of carbon fibres and vastly improved production engineering.

A large number of industries, particularly the Small and Medium Enterprises (SMEs) in the country face growing technological obsolescence. Punjab, for example, has the the highest intensity of SMEs in the country – some 2,00,000. Their technological upgradation is not even on the state government,s agenda. Regional R&D institutes, once at par with world standards, have run down in quality. They have become simply irrelevant to industry. In agriculture, too, productivity has plateaued at levels 30-50 per cent below world standards. Indian industry is far too dependent on imported technology. Even very large companies which enjoyed market dominance and economies of scale in the protective, truly ‘Swadeshi’, days, did not upgrade their products. When they need even marginal improvements on earlier technologies, they fall back on import of further knowhow. The position has hardly changed. They are happy to walk on the crutches of foreign technology.

There is a certain degree of inevitability in the change process relating to technology. Four broad phases of economic development can be identified : Phase I witnesses gradual liberalisation to integrate the country’s insulated economy with that of the world’s. This phase is marked by hesitation and advocacy of protectionism from certain sectors of industry in the name of giving more time to `adjust’.

While many forge ahead to take advantage of emerging technologies to meet with global competition, some seek protection behind high fences of tariffs. In India there are repeated calls again of `level playing field’ `Swadeshi’, and now `calibrated globalisation’. Clearly, economic liberalisation is not an unmitigated advantage. This phase witnesses extensive restructuring take-overs and mergers and selective privatisation. 50 years after independence, we are still in Phase I.

Phase II is marked by accelerating changes and institution building. The emphasis is on generating knowledge and creating manpower skills. The emphasis is away from import substitution and on developing technology which is contemporary.

In Phase III economy is fully liberalised, high growth rates are witnessed and the country becomes a global player.

Phase IV is marked by sustained generation and creating wealth and exploiting new knowledge.

The need for indigenous technology development at the national level and in our companies is going to be a greatly pressing one. Much of the impact of recent changes on technology is actually not visible. How?

Firstly, liberalisation has led to low tariff walls, freer imports and liberal foreign direct investment regime. Companies abroad, therefore, now prefer to export finished goods to India rather than transfer technology to manufacture them locally.

Secondly, it is lot easier now to manufacture by setting up companies with majority foreign equity holding, often 100%. Rather than give the know-how to partners, technology will come `sealed’ in 100% equity companies. This has been witnessed in a number of sectors.

Thirdly, as India grows competitive and as the industrial muscle grows, we shall increasingly be perceived as a threat. We have witnessed growing restrictions on export of products and technologies to India. This is just the beginning. Its full implications have not been grasped.

The new technological order leaves India with no choice but to create and improve on technologies. There is no other way to survive in an environment where commodity prices decline and factors of production, such as labour and raw materials, face a rapidly reducing advantage. It is no surprise that nations invest heavily in their R&D. The distribution of global R&D is highly concentrated in the developed economies. About two-thirds of the world-wide R&D efforts are found within the Triad of the US, Japan and Western Europe. The Third World, by the most generous estimates, accounts for only about 5% of global R&D and it is declining, especially in the heavily indebted countries. Only in the "four tigers" (South Korea, Taiwan, Singapore, Hongkong) and also in China and some other East Asian countries is there a rapid rise of R&D. Their R&D expenditures have been growing rapidly. Taiwan and Singapore now have a level of R&D intensity comparable to that of many european countries.

There is a new urgency to technology development by the Indian industry. It is time our Chief Executives in industry, Research Laboratories and the Government took charge of the cycle that embraces improving design competence through innovation and invention, right to the point of commercialising. New products are not created at a single point. Theyfollow the well-recognised process of (A) basic research when no applicable technology is right (B) Developmental work where possible end use is visible (C) Proto-typing and testing. Commercial feasibility at this stage is not clear. (D) Full scale installation of new process. Technological risks are minimum. (E) Commercial launch. Business risks dominate. The driving force in technology is desire to excel.

Mere market forces do not supply the motivation. Technology development does not evolve by itself. It is not a natural law. It has to be willed. Societies everywhere have shown that technological achievements are driven by strong social economic and political commitments. When the Egyptians built pyramids, they created the tallest structures : 400,000 people employed for 20 years moving 4 million tonnes of sandstone. That was the state-of-art technology then. They created the tallest structures in the world.

They remained unchallenged for next 4000 years, even though the knowledge and skills existed to surpass them, till the new masts and skyscrapers, cathedrals and Eiffel Tower came. That happened not because the technology was simply waiting to be converted into structures. Materials were available, joining techniques were known. The real feat of Eiffel Tower is that there was a will to do it. When the societies lose will, when industries lose interest, technology development declines. There is no such thing as a technology base from which developments spring up on their own.

When the US pride was hurt by launch of the `Sputnik’ by the Soviet Union in 1956, it took them 10 years and as many workers as the Egyptians did for Pyramids to put man on the moon in 1968. In both cases, the accomplishments grew out of a `will to do’. Where is our will?

Let us, therefore, put technology on our agendas and make it an area of concern. We have to reward engineering knowledge - making sure it is no less remunerative than marketing or finance. Design and manufacturers must find a preference with our youth. The excitement with chartered accountancy and commercial courses must be matched with that of science and technology. We have to change salary structures in our companies to help improve the contribution of technology in industry.

All changes require champions. The freedom movement needed a Gandhi. But great ideas also require their singers and poets to carry the message, to enthuse people. The freedom movement also needed a Tagore. The message of technology has to spread.

India’s might will, in the end, come from its economic strength. A nuclear test here and there, even build-up of an arsenal and a delivery system cannot bring India the stature and its rightful role in the world affairs. It has to be backed by a strong industrial base. It is essential that we pursue science which is contemporary, not second rate, and develop technology which answers the social and economic needs of the country. To change this into reality, we need champions.

We need them to carry the message across, enthuse people with technology and make them believe that not only it is within our reach but that, without it, we are not going to be able to have our voice heard. Technology cannot stay a neglected agenda much longer.

The writer is a well-known management consultant.

Only nuclear energy can give us
long-term security
An economically strong India can dictate terms
by R. Chidambaram and R.K. Sinha

INDIA of the next century should be an economically strong nation, with the quality of life of all its people comparable to the one in the developed societies.

How can we quantify ‘quality of life’? The United Nations has a methodology to quantify the quality of life of the people of a country in terms of what they call the Human Development Index (HDI), and they base this on per capita GDP, literacy rate and life expectancy at birth. The UN Human Development Report, 1995, ranked India, with an HDI of 0.439, at the 134th position in the world.

It has been our feeling for many years now that better measures of HDI in a developing country are per capita electricity consumption and female literacy, and both need to be raised substantially for India to be rated as a "developed" country in the world community. The per capita electricity consumption in India should go up by a factor of at least 8 to 10 for this to be achieved.

Electrical energy is an essential ingredient of social development and economic growth. Argentina and Brazil had per capita electricity consumption figures of 1636 and 1547 kv per year, respectively, in 1992. Thus, to be able to reach even a reasonable level of development the Indian per capita electricity consumption should be about 1500 kv per year. It may be noted that the corresponding world average figure even now is 2400 kv per year which is higher than the modest target indicated here. For achieving this target by the year 2020, and assuming that the Indian population will level off beyond this year, we will need to have an installed electrical generation capacity of about 450 GWe by the year 2020. Making slightly different sets of assumptions, one may have somewhat different projections, but the basic point sought to be established through this assertion does not get altered. Having an installed capacity of 450 GWe by the year 2020 and beyond, is surely a desirable objective.

Our annual rate of growth of GDP during the past few years has been about 5.5 per cent. An analysis of past trend indicates that for each one per cent rise in GDP the per capita electricity consumption has to increase by about 1.25 per cent. This, in turn, implies that even to sustain the current rate of growth of the Indian economy, with the existing rate of population growth, it is necessary to have a rate of growth of installed electrical capacity of at least about eight per cent per annum.

Let us now consider the requirements for working out an optimum mix of energy resources needed to achieve the aforementioned desirable objective. Remembering that we are still talking about reaching a less than optimum goal, we should consider only our currently known economically exploitable resources and technologies which are available to us today. Based on available information we can assume that the total renewable and hydro potential available in India, economically convertible to electrical energy through established technologies, amounts to 104 GWe. Let us also assume that this maximum potential can be reached by the year 2020. We have already done an exercise to assess the potential growth of nuclear power up to the year 2020 and came to a conclusion that by the year 2020 it should be possible to reach an installed capacity of 20 GWe using nuclear energy, at the currently envisaged rate of growth, which averages to about 12 per cent of nuclear generation capacity addition per year during the forthcoming 22 years. The balance of about 320 GWe required in the year 2020 will need to be, therefore, provided by using fossil fuel based thermal power stations. Essentially it amounts to a growth of thermal based electricity generation capacity at the rate of about seven per cent per year up to the year 2020. With our meagre reserves of oil and natural gas, and expected rise in the cost of their import in the years to come, we can also assume that by the year 2020 practically all the thermal power stations will be based on coal.

With an installed capacity of 320 GWe, the annual consumption of the Indian coal used for power generation purposes would be such that our currently estimated economically mineable reserve of coal available for power generation purposes, would be fully consumed a couple of decades before the end of the next century. Surely, there is a possibility of using advanced technologies in future for exploiting the remaining, currently not economically mineable, reserves of coal. We may also probably locate some additional reserves of coal. Even if it is so, one must take into account increasing concern about global warming due to CO2 emission, the need for conserving coal as a basic industrial raw material in steel and other such industries, and the increasing utility of coal to serve as a source of generating fluid fuels for transport application. For India, with a heavy dependence on oil imports draining its economy and making it potentially vulnerable to external pressures, the last factor has to be given a serious consideration in a short term time frame itself. With these economic as well as strategic considerations, it does not seem to be wise to contemplate a continued growth in the use of coal for power generation in India after we reach a level of about 450 GWe installed capacity. If this objective is met by 2020 then during the post-2020 era, the installed capacity in coal- fired stations should progressively get depleted as the older stations are taken out of service.

With the renewable and hydro having reached maximum potential in the year 2020, the deficit arising out of the progressive retirement of coal-fired stations will need to be made up by other sources of energy. There is no other choice other than nuclear energy.

This will require the nuclear power generation capacity to continue increasing beyond 20 GWe from 2020 AD onwards. With some additional renewable resources becoming economically exploitable, technological advances leading to increased efficiency in energy conversion processes becoming available, and adoption of energy conservation measures, some part of the burden on nuclear energy may get reduced, but the bulk of the future requirements will still need to be borne by nuclear energy. Unforeseen commercial development of new sources of energy including fusion, which is another form of nuclear energy, along with the aforementioned other possible developments may lead to a better prospect of reaching beyond the modest goal without reducing our dependence on fission-based nuclear energy.

It must be remembered that we are not discussing whether the target is realistically achievable or not at the currently envisaged rate of growth of nuclear energy. We are at a crucial juncture today, and our decisions and actions today will determine the feasibility or otherwise of achieving the desired objectives in time.

Generation of electricity through application of nuclear energy has been our main priority so far. We must, however, also plan for the scenario when the indigenous reserves of fossil fluid fuels will get depleted and their import will become unaffordable for our economy. This situation may manifest in the early decades of the next century. Conversion of low-grade coal reserves to fluid fuels, and extraction of low quality petroleum reserves requires high temperature steam. Most of the potential hydrogen generating processes also demand heat at high temperature. Nuclear energy seems to be the only viable means to provide such process heat in a medium to long term time frame. Thus, apart from its application for electricity generation purposes, India also requires nuclear energy for meeting its long term non-electricity application needs.

To summarise, it can be stated that while we must exploit the renewable and hydro-potential to the fullest in the quickest possible time, and we should utilise our fossil fuel resources to achieve an accelerated economic growth in the short term; it is only nuclear energy which can provide us the essential long term energy security.

In view of the foregoing, the R&D challenges in nuclear technology have been and are directed towards providing the required energy services for the Indian population while avoiding any unacceptable environmental impacts. These challenges have been defined considering the indigenous nuclear fuel resources. India has a modest reserve of uranium and a large reserve of thorium. Most of the other nations in the world, who are advanced in nuclear technology, have access to sufficiently large quantities of uranium reserves. Hence, the technologies required for exploitation of thorium have a much higher priority for India than that accorded in most of these other nations. Therefore, the R&D challenges involved in pursuing the thorium path, have to be necessarily met head-on by the Indian R&D teams without much benefit from the knowledge base available elsewhere.

This perception was the basis of planning an indigenous nuclear energy programme in India way back in the mid-fifties by our policy-makers. The indigenous R&D has led to our developing self sufficiency in all the important technological areas important for our current programmes. It has also led to creation of an R&D infrastructure which can take up, and has been taking up, any challenges for the future development of next generation nuclear energy production systems, undeterred by the technology control regimes sought to be imposed on us.

Uranium-235 is the only naturally occurring fissile isotope constituting about 0.7 per cent of natural uranium. The balance mostly comprises uranium-238, a ‘fertile’ material which gets partially transmuted to fissile plutonium-239 on absorbing neutrons during operation of a nuclear reactor. Thus, during the operation of a nuclear reactor, while the original fissile material gets converted to fission fragments and energy, the fertile inventory gets partially converted to transmuted fissile materials. Progressively, on account of the neutron absorbing character of most of the fission fragments, the capability of the fuel to generate additional energy reduces and the fuel has to be discharged. There are two ways of dealing with this spent fuel. The first one, termed ‘open cycle’, consists of treating the entire spent fuel inventory as waste and dispose it as such. This has been the approach being followed by several advanced nations of the world. With this approach, for a uranium fuelled reactor, along with the fission waste products, the plutonium content in the spent fuel, and the balance uranium-238 which constitutes almost 98 per cent of the spent fuel is also disposed. In other words, with this approach only about two per cent of the energy potentially exploitable from nuclear fuel is utilised.

To avoid this colossal waste, a closed fuel cycle has to be pursued. It is possible to remove the plutonium and uranium-238 from the spent fuel in a reprocessing stage and use these two valuable nuclear materials once again in a recycling mode. Thorium is a fertile material which cannot be used as a fresh fuel alone. However, like uranium-238, thorium also gets partially converted to a fissile material uranium-233 when used as a part of nuclear fuel mix. Thus, utilisation of thorium is possible only if a closed nuclear fuel cycle is adopted.

Right from the inception of the Indian nuclear power programme, the Indian strategy has been to reach closed nuclear fuel cycle stage based on utilisation of plutonium and thorium based fuels in a planned manner at the earliest.

On the basis of the above mentioned strategy, three phases of Indian nuclear power programme have been identified. In the first phase, natural uranium dioxide based fuel is used in heavy water moderated and cooled Pressurised Heavy Water Reactors. The indigenous resources can support about 10,000 MWe of installed capacity through use of PHWRs without plutonium recycling. In a subsequent stage, the fissile plutonium contained in the spent fuel of the PHWR is separated in fuel reprocessing plants. This plutonium serves as the main fissile element for fuelling the Fast Breeder Reactors (FBRs), with plutonium-uranium mixed fuel and fertile depleted uranium and thorium in blanket regions, where plutonium can be efficiently used to not only generate power but also to convert non-fissile uranium-238 and thorium to fissile plutonium-239 and uranium-233 respectively.

Using FBRs an energy output of 350 GWe can technically be sustained using indigenously available fuel resources. In parallel, as a part of the second stage of Indian nuclear programme, it has been planned to use thorium based fuel along with a small feed of plutonium based fuel in Advanced Heavy Water Reactors (AHWRs).

The AHWR would help in reaching the stage of large-scale thorium utilisation sufficiently early. In the third stage, dedicated breeder reactors based on uranium-233 and thorium are planned to be constructed. These reactors would serve as the main stay of the final, thorium utilisation stage, of the Indian nuclear programme. The currently known Indian thorium reserves amount to more than 200,000 GWe-year of electrical energy and can easily meet the Indian requirements during the next century and beyond.

While R. Chidambaram is the Chairman of the Atomic Energy Commission, R.K. Sinha is the Head of the Reactor Engineering Division at Bhabha Atomic Research Centre.