THE HINDU BUSINESS LINE
Financial Daily
from THE HINDU group of publications

Tuesday, May 30, 2000

• AGRI-BUSINESS
• BANKING & FINANCE
• CORPORATE
• INFO-TECH
• LOGISTICS
• MACRO ECONOMY
• MARKETING
• MARKETS
• MONEY
• NEWS
• OPINION
• INFO-TECH
• CATALYST
• INVESTMENT WORLD
• MONEY & BANKING
• LOGISTICS

• PAGE ONE
• INDEX
• HOME

Opinion | Next | Prev


Globalisation, e-com and Sankhya Vahini

Globalisation is a reality today, and the country has to prepare the people to meet the challenges of the future. The Government should not get euphoric about such New Age projects as Sankhya Vahini whose range and possibilities tend to obscu re the other priorities. And more than anything else, we must get back to a saner `mindset' about the country's `development', says Arun Ghosh.

WHETHER the Swadeshi Jagaran Manch (and others of similar views, especially on the overwhelming cultural changes that today's globalisation involves) like it or not, globalisation of this country is a reality today. There is no `total' going bac k; one can shift gears, one can at best steer away at an angle, rather than go headlong on the course being relentlessly pursued by the present Government. It is in that context that the Sankhya Vahini Project _ which has evoked considerable controversy already _ has to be viewed.

Let us consider the important issues in the light of which the Sankhya Vahini Project needs to be examined. The first is the `security' angle, highlighted in Business Line (May 17); and the warning, coming from a former Additional Secretary in the Cabine t Secretariat, must be taken seriously. Second, we should consider the possible `gains' and `losses' from the project, in the matter of trade, especially on the possible software exports. Third, we must consider the pros and cons of doing the required re search and development work indigenously, and review the possible `gains' and `losses' arising from the collaboration with IU Net Inc. _ a corporate offshoot of the Carnegie Mellon University of Pittsburgh, US _ on the Project. Finally, we must view the role and impact on the project in the larger context of the programme of India's development, of the upgrading of the lives of the vast masses, and of `priorities' for government intervention.

A perusal of the considerable literature now available, both for and against the Sankhya Vahini Project, seems to indicate that the `security threat' to India arising from the project is perhaps overstated. The reason is not that there is no danger of CI A infiltration of IU Net Inc., but simply that as of today, we probably do not have many security secrets from the Pentagon. The enormous range and power of the spy satellites ensures that. More important, do our senior bureaucrats/armed forces officers keep their lips always sealed? Even the casual way secret matters are discussed over telephone, or the way ex-Army officers act as `agents' of foreign suppliers of defence material, seems to cast serious doubts about our capability to keep defence secret s under wraps. Indeed, how was it that Pakistan was able to break into our `codes' and decipher coded messages during the Kargil operations?

On balance, we cannot buy the `security' argument against the Sankhya Vahini Project.

What are the possible`gains' and `losses' arising from the project? One must say that many of the possible `gains' _ as stated by the government spokesmen _ are fanciful. The e-agriculture, e-medical aspects are among these; in fact, this is where the ad vocates of the project reveal a mindset that is dangerous. We would come to that problem later.

The likely `benefits' from the Project stem from the possibility of increased software exports. `Connectivity' is an essential part of the infrastructure required for software exports. From the available literature, it appears to be more than likely that the required `connectivity' would get facilitated by the project.

Yet, we must add a word of caution. `Connectivity' is merely one of the essential requirements for increased software exports. The other _ and more important _ requisite is a large body of highly educated, trained and skilled manpower. And the way higher education is being not only systematically neglected but also downgraded, the supply of the required manpower may well prove to be a serious bottleneck. Let us be clear. What Nasscom, and what government spokesmen are talking of is an increase in softwa re exports from the present level of $1 billion to $100 billions in ten years. Do we have the requisite number of `experts' or `specialists'? Production of software requires highly educated, highly intelligent, and highly `skilled' people.

The point needs some elaboration. We can produce an army of typists (capable of `punching' data/information on the computer). Even herein, of late, the quality of typists and keyboard punchers is getting steadily worse. But `software' production requires more than mere ability to `transcribe' messages. And, it is herein that the Government has, of late, left the entire initiative for higher education to the private sector; resources for higher education are drying up at a frightening speed. We have forg otten that `development' of any kind requires the development of the people. That has important connotations to which, again, we would return later.

One must reiterate that the `claims' _ made by Government spokesmen _ about the futuristic contributions of the Sankhya Vahini project to e-agriculture, e-medical diagnoses, etc., are somewhat ludicrous. In agriculture, the project could help `floricultu rists' (near Bangalore); in a country where the majority of farmers have small and `marginal' holdings, the very notion (that the Sankhya Vahini project would help Indian agriculture) reveals a `mindset' that is dangerous.

The same applies to e-medical; where the PHCs have no life-saving drugs, where even doctors do not turn up, and where either no equipment exists (or is in disrepair, lacking in personnel to man the equipment), the project can be of E-medical use only for the very rich, who can go to expensive private hospitals/nursing homes and possibly get the benefit of diagnosis by renowned experts.

E-commerce possibilities do exist; and, in the matter of e-education, possibly, `libraries' can benefit, though therein, we need a somewhat fundamental change in the mindset of the authorities and those currently in charge of libraries. In short, too lou d proclamations on the likely `benefits' from the project are likely to be counterproductive insofar as they breed scepticism even about the positive aspects of the project.

We come to the third aspect of the question: What are the merits/demerits of `importing' the technology rather than developing it indigenously? The two criteria one must keep in mind in the above context are: Time and cost. It is impossible for a layman to pass judgment on that issue; only scientists like Dr. Abdul Kalam (and senior people in the DRDO) can pronounce judgment on this question. Obviously, IU Net Inc. has the required technology; and implementation of the project would immediately improve `connectivity'. That is an advantage.

Yet, there is a cost; and a serious cost. The project would effectively rule out any indigenous R&D for even `upgrading' the project (and the technology thereof). Not only the history of `collaborations' in India (unlike in Japan and South Korea), but al so the 49 per cent equity held by the IU Net Inc. (against 45 per cent held by the DTS) would ensure that we continue to depend on the supply of technology on Carnegie-Mellon.

Let us add: It is certainly a good thing that the latest `knowhow' in this important sector is thus being transmitted to India; we are certainly going to be gainers thereby. Yet, in practice, it would preclude any indigenous effort at upgradation/improve ment of this technology. There is yet another cost. If the project is financially viable _ and it is certainly likely to be, for why else should IU Net Inc. invest? _ 49 per cent of the profits would be remitted abroad. And, these remittances would cut i nto the future revenues of VSNL and MTNL and DTS significantly.

Let us add that the cost would be minuscule if our software exports do increase in the volumes projected. But one must note that for software exports to increase, `connectivity' is no more than a facilitating factor, not the prime driving force. The latt er would depend on the rate at which the required skilled personnel can be multiplied in India.

We come to the last, very broad generic issue raised in the context of the Sankhya Vahini Project. The real danger _ which arises from the ecstatic (and outrageously optimistic) view of the project expressed by Government spokesmen _ is that it reflects a certain `mindset' of the present `elitist' Government. Indian agriculture has at best stagnated over the last decade, despite a long period of generally favourable monsoon. Small-scale industries are, by and large, closing down, under the somewhat sudd en and precipitate withdrawal of quantitative restrictions on import and simultaneous lowering of import tariffs. A million or more handloom weavers are in dire straits; and all evidence points to increasing incidence of `poverty', especially in the rura l areas.

Primary education and primary health-care are in disarray, as indeed even higher education (except for a small elitist class). And, of late, even the ability to take emergency action, for which our civil services used to be quite proficient, has been det eriorating. Indeed, of late, the problem of drinking water shortage in many parts of the country appears to have been aggravated and accentuated.

Yet, and despite the warnings of the Prime Minister, the general euphoria about `economic reforms' and `more reforms'; about the focus on the reaction of Dalal Street on every conceivable issue; about the comfortable foreign exchange reserves position (b ased entirely on the inflow of capital from abroad, with little heed to the problem of declining domestic savings, as revealed by the provisional National Accounts for 1998-99); a general `euphoria' continues to pervade among the top policy-makers in Gov ernment.

That, in fact, is the greatest danger from the projects like the Sankhya Vahini; they divert attention from the basic priorities that should inform policies. The country is getting rapidly divided into 20 per cent who `have' and 80 per cent who remain `d eprived' of even bare essentials of life.

The Sankhya Vahini project is likely, it appears on balance, to benefit 20 per cent of the people. But the prosperity of even the 20 per cent could be fragile; for, civil unrest could engulf the country, and bring to halt even progress on the limited fro nt of greater `connectivity'.

Globalisation is a reality today. The response of the country has to be: Not to shut itself off from external influences but to prepare the entire population for meeting the challenges of the future. That is a complex task; and the alternative policy par adigm required calls for a separate essay.

That does not mean the Sankhya Vahini project should be scrapped. It only means: (a) that we should not get euphoric about it or exaggerate its likely benefits; (b) that we must rearrange our entire set of priorities, which tend to get obscured by the ex citement of the range and possibilities of the new Information Technology; and (c) more than anything else, we must get back to a saner `mindset' in regard to `development' of the country.

Comment on this article to BLFeedback@thehindu.co.in

Send this article to Friends by E-Mail


Next: The equity factor in education policy
Prev: Looking back at India's trade policy
Opinion

Agri-Business | Banking & Finance | Corporate | Info-Tech | Logistics | Macro Economy | Marketing | Markets | Money | News | Opinion | Info-Tech | Catalyst | Investment World | Money & Banking | Logistics |

Page One | Index | Home


Copyright © 2000 The Hindu Business Line.

Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line.