12 September 2017-Current Affairs

In News

  1. Artificial Intelligence (AI) in India
  2. Billionaire Raj/Income inequality in India
  3. Why India needs a bullet train?

  1. Artificial Intelligence (AI) in India
  • Researchers estimate that technology will kill from a third to a half of all jobs within a decade. Devoid of an urgent push by the government to frame policy on AI, Indian labour will face a deep crisis.
  • Over 90 per cent of the Indian workforce is organised informally and is vulnerable to sweeping economic upheavals. As AI proliferates, the contractual/gig economy will expand, amplifying precarity and triggering a downward spiral in wages.
  • Construction and manufacturing labour, already atomised and benighted by the contractual system, will not be able to collectively bargain against an industry when it starts adopting 3-D printing technology. Farm labour, already in peril due to pricing, will suffer due to the glut of imported cheap food produced by automated farming and the agricultural robotics industry being conceived in East Asia. Vehicle assembly line production is already being replaced by robots.
  • In IT, hiring has decreased by more than 40 per cent in the last year with sharper cuts predicted. Large parts of the IT sector are dependent on outsourcing and those jobs are at risk. Job creation figures in the non-farm formal sectors have fallen by half from 2011 to 2016.
  • The government must invest heavily in large infrastructure and development projects, and liberally use automation to free up sections of the workforce to work on them. Simultaneously, the government must encourage horizontal cooperatives based around AI to ensure knowledge-worker controlled decentralised progress in AI on the ground.
  • Advantages of automation
    • Teach land owning farmers (only 10% of all farmers) how to use automated machines to get higher, more consistent yields in conjunction with other improved farming practises. Guide the freed rural workforce to develop the abysmal rural infrastructure and industry by launching a national industrial and infrastructure-centric public works programme, augmented with automated machinery and processes, for the benefit of rural communities, which will absorb this labour
    • Examples of public works that India urgently needs is affordable housing for its huge population, mass renewable energy generation etc. Technologies like 3-D printing can be taught
    • AI processes can be used for ensuring better distribution and management 1) It allows worker run co-operatives to become efficient enough to compete against traditional corporate structures, allowing the government to incentivise such formations, in turn increasing worker prosperity. AI-based cooperatives can be the bedrock of a more just economy. 2) It necessitates creating governmental agencies to use AI, under public oversight, to run PSUs better.
    • Structures of governance could be strengthened and improved with AI. For example, statistical analysis can be used to detect malpractices, fraud, and corruption. Already, AI is being used to combat propaganda and spurious news. Computational linguistics can be used to preserve the vast cultural heritage of our marginalised peoples, and AI could be a boon for understaffed but vital agencies.

Reference

  1. http://indianexpress.com/article/opinion/columns/artificial-intelligence-can-become-an-emancipatory-agent-for-the-workforce-4839128/

  1. Billionaire Raj/Income inequality in India
  • International Monetary Fund (IMF) research showed India, alongside China, to be the most unequal major economy in Asia.
  • A recent study by Credit Suisse suggested that India’s 1% now own a 58% of national wealth—one of the world’s highest rates, and akin to notoriously stratified nations like South Africa and Brazil.
  • According to economists Chancel and Piketty, income inequality in India is now at its highest level since income tax was first levied in 1922.
  • They have calculated inequality from tax data, national income accounts and sample surveys—a much better method than the traditional method focused on consumption rather than income or wealth, that understate the extent of the problem.
  • Gini coefficient, a popular measure of inequality, rose from 45 to 51 between 1990 and 2013. (Far higher than the official Gini estimate of 37 derived from consumer surveys.)
  • Important lessons
    • The increase in income inequality coincides with the sharp rise in Indian economic growth after 1980. There is a very significant drop in income inequality during the stagnant 1970s
    • Income inequality is not just about the share of national income going to the top 1%. There are deeper distributional issues.
    • Unequal nations tend to grow more slowly ,are more prone to financial instability and find it harder to form the kind of social consensus needed for structural economic reforms
  • Comparison to China
    • The top 1% has done extremely well, the Chinese middle has benefited far more than the Indian middle, and the bottom half in both countries has had broadly similar experiences.
    • China could absorb millions of people who left farming because of the rapid expansion of large enterprises, as was the case in most other successful structural transformations in Asia. India has failed on this front. Most workers who have left farms are stuck in tiny informal enterprises with abysmal productivity levels.
  • Reasons
    • poor public policy, along with problems of corruption and cronyism, are partly to blame.
    • Almost all successful economies in East Asia have grown rich by investing heavily in basic health and education, which helps poorer workers to move from farms to factories. Modern India more often looks like a Latin American economy, with a weak social safety net but yawning inequality. 
  • What to do?
    • A sustainable attack on mass poverty should be focused on human development and job creation in the modern sectors of the economy rather than redistribution through fiscal spending that is eventually destabilizing. Growth should be more inclusive.
    • Improve  tax structuring and collection
    • Using competition policy and regulation to stamp out crony capitalism and entrenched corporate power at the top. 

Reference

  1. http://www.livemint.com/Opinion/WggBKdjWUaGlXNrQvHWUUJ/Addressing-Indias-income-inequality.html
  2. http://www.livemint.com/Opinion/WmpSjQAvPGeVzxqpgXYvtK/The-dangers-of-Indias-Billionaire-Raj.html

3. Why India needs  bullet trains?

Mumbai-Ahmedabad High Speed Rail (MAHSR) project, popularly known as the bullet train, will herald a new era of safety, speed and service and help the Indian Railways craft a pathway to becoming a global leader in scale, technology and skill.

  1. Attractive low-cost long-term financing from Japan (interest rate of 0.1 per cent over 50 years). This saves any strain on existing financial resources, as more than 80 per cent of the project cost is being funded by the government of Japan
  2. The MAHSR Project has “localised manufacture” and “transfer of technology” as twin, complementary objectives, boosting ‘make in India’.  Recall how an investment by Suzuki in the automobile industry spawned a new generation of Indian auto-component manufacturers from the early ’80s. This project is likely to generate employment for about 20,000 workers, who will then be equipped to take up construction of more such projects in India. The new areas where construction skills would be developed are ballast-less track, under sea tunneling etc
  3. Professional capacity-building.
  •  High Speed Rail Training Institute at Vadodara will train 4000 people for operation and maintenance.
  •  300 young officials of the Indian Railways are being trained in Japan to give them exposure in high speed track technology

4.Speed

  • The estimates are that the high speed rail corridor will have a daily ridership of around 36,000 in 2023. This is expected to enable the railway system to begin winning back the higher-fare paying passengers in inter-city routes from the domestic aviation sector.

5. Cutting edge operational technology

  • The Shinkansen technology is renowned for its reliability and safety. The train delay record of Shinkansen is less than a minute with zero fatalities. Thus, the project is set to provide reliable and comfortable service with high standards of safet The technology regarding disaster predictions and preventions will also be acquired as part of the project.

Reference

  1. http://indianexpress.com/article/opinion/columns/why-india-needs-a-bullet-train-china-abe-modi-ahmedabad-mumbai-4839143/