ECONOMIC & HUMAN GEOGRAPHY - IAS Score

ECONOMIC & HUMAN

GEOGRAPHYTO

PICS

MP1-G-EHG-19

Agriculture Role of Allied Sectors in Rural DevelopmentResources Industries Transportation Demography Urbanization

ECONOMIC & HUMAN GEOGRAPHY

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CHAPTER 4

Food Processing Industry Food processing is the transformation of raw ingredients into food, or of food into other forms (ie. food processing may denote direct manufacturing of food or value addition on existing food). Food processing typically takes harvested crops or butchered animal products and uses these to produce long shelf-life food products.

Processes in a Food Processing Industry

There are two types of processes in a food processing industry: Manufacturing: Raw materials. Value Addition : Increase shelf life and value of a manufactured food.

Products in Food Processing Industry

We can divide the products in food processing industry into two: Primary (Eg: Fruits and Vegetables). Secondary or Value Added (Jams and Squashes).

Why are food processing industries significant?

India is a land famous for food production. More than 50% of Indian population works in Agriculture related activities. If there are good food processing industries in India, raw materials like grains or meat can be converted into food for domestic and foreign consumption. Food processing units acts as a link between agriculture and industries. Food processing industries can absorb a major share of workers from the agriculture sector, who face disguised unemployment. It can lead to better productivity and GDP growth. Food processing prevents food wastage and help in attaining food security. Processed food requires less space for storage. Processed food can be exported. This may help us in getting foreign exchange reserves.

Scope and Significance of Food Processing Industries in India:

India’s position as a major food producer: India ranks 1st in the production of – milk, ginger, banana, guava, papaya, mango etc. It ranks 2nd in the production of rice, wheat, potato, sugarcane, cashew nut, tea

INDUSTRIES


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etc. It is among the top 5 countries in the production of coffee, tobacco, spices, seeds etc. With such a huge raw material base, we can easily become the leading supplier of food items in the world. Resource advantage of India: Different soil types and different climate types for cultivation of diverse food crops, long coastal line suitable for fi shing, huge resource of domestic animals etc. Increasing employment: Expected to create more than 10 lakh new jobs. Curbing Migration: Provides employment in rural areas, hence reduces migration from rural to urban. Resolves issues of urbanization. Curbing food infl ation: Removes issues of wastage or middle man. Curbs food infl ation.Indirect relief on non-food infl ation too. Crop Diversifi cation: Because of long shelf life, farmers can diversify their products. The demand potential: Expected to reach $250bn turnout by 2015 and $350bn by 2020. Youth population, middle class, rising income, nuclear families, media penetration, shopping mall culture etc cited as positive factors. Government initiatives to boost food processing: Various government initiatives like attracting FDI, reduction in excise duties etc have boosted food processing. Future driver of Indian growth: Food processing corresponds to around 10% of GDP in agriculture-manufacturing sector. It has potential for more.

Obstacles in the growth of food processing Industries:

Small size companies: Indian food processing companies are small and can’t compete with global giants which invest heavily on R & D. Lack of good laboratories in India: Food export to US and EU demands high quality standards. India lack good laboratories to check heavy metal and other toxic contamination in food. Lack of skilled work force. We have only a few graduates in Food Technology. Lack of right vision and support from the government at the right time. Lack of good transportation facilities. Roads are overburdened. Lack of storage facilities and good production techniques. Lack of organized retail. Limitations in supply chains. Limitations in the quality. Lack of modern regulations.

Why majority of food processing industries are located in coastal regions?

Vicinity with the western countries. Most of the capitalist are based near western coast. Western states are richer than eastern states. Fishing is more developed on western coast. Due to more urbanization the concept of nuclear family, gender equality, female participation in workforce is more on western coastal states thus demand for packaged food is more in these states. Well developed transport system. Cold storage system is well developed. More liberal society thus acceptance of new ideas.

Seed Industry in India India is the fi fth largest seed market across the globe. It is expected to grow at a more than 15% during 2017–2022, and can reach a value of more than US$ 7 Billion by 2022.


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The seed market is majorly contributed by non-vegetable seeds such as corn, cotton, paddy, wheat, sorghum, sunfl ower and millets. Direct contribution of quality seed to the total production can be raised up to 45% with effi cient management of other inputs.

Issue Involved :

The issues in seed sector involve multiple stakeholders such as: Seed Companies

The research investment by private companies remained at a meagre 3-4% of revenue against the international norm of 10-12%, due to complex and weak IPR regime and various licencing term for the companies. Moreover, existing technology provider in GM Crop seed, continue to enjoy close to monopoly status.

Government Regulatory failure in preventing the rampant illegal sale and planting of seeds based on an unapproved GM crop had been reported in Maharashtra and Telangana. Various agricultural economists argued that the policies for seed sector lack visionary approach and rest on fragmented actions.

Farmers Seed replacement rate continues to remain below the desired level of 20 per cent for most crops. Unscientifi c use of farm-grown seed lead to lower return from agricultural output. Availability of less areas for seeds to achieve optimum Seed Multiplication Rate (generation system) add hardship to farmers.

Steps to be taken

A swift action framework is needed in collaboration with state governments to identify and take over fi elds where illegal GM cotton is being grown. Focus on GM technology: National policy on GM crops to defi ne the exact areas where GM is required by the country and where the government will encourage public and private investment in GM technology. Quick resolution to the confl icts between the different IPR laws that are affecting this industry and clearly defi ning how the government wants to encourage research investment with assured IP protection in this important sector. Incentives to private sectors in the form of bankable schemes should be provided for production of low value high volume seeds. Regulatory mechanism: Strengthening the regulatory mechanism for the seed and biotech industry to make it transparent, science-based, predictable and fair. Integrated Approach: Efforts should be made toward improvement of Seed Replacement Rate, distribution of quality seeds appropriate to agro-climatic zone along with a determined effort to address general and region specifi c constraints.

Thus Seed industry is the crucial apparatus for sound agricultural health of the economy. Doubling the farmers’ income by 2022 through seed science can be effectively realized through integrated seed market.

MSME Industries in India MSMEs not only play crucial role in providing large employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas, thereby, reducing regional imbalances, assuring more equitable distribution of national income and wealth. MSMEs are complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country.


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MSME accounts for more than 45% of total manufacturing output of the country, contributes around 9% to GDP and accounts for more than 40% of total exports of the country. There are total around more than 40 million such enterprises in India (which is 2nd largest after China) it employs over 11 Crore people in India.

Definitions

Manufacturing Enterprises: The enterprises engaged in the manufacture or production of goods pertaining to any industry specifi ed in the fi rst schedule to the industries (Development and Regulation Act, 1951) or employing plant and machinery in the process of value addition to the fi nal product having a distinct name or character or use. The Manufacturing Enterprises are defi ned in terms of investment in Plant & Machinery.

Micro Enterprises: Less than 25 Lakh rupees. Small Enterprises: More than 25 Lakh rupees but less than 5 Crore rupees. Medium Enterprises: More than 5 Crore rupees but less than 10 Crore rupees.

Service Enterprises: The enterprises engaged in providing or rendering of services and are defi ned in terms of investment in equipment.

Micro Enterprises: Less than 10 Lakh rupees. Small Enterprises: More than 10 Lakh rupees but less than 2 Crore rupees. Medium Enterprises: More than 2 Crore rupees but less than 5 Crore rupees.

Problems faced by MSME sector

Lack of Finance: It is estimated that more than 90% MSME’s does not have access to institutional fi nance and dependent on local fi nance such as relatives or moneylenders where interest cost is generally on higher side. However government have started lots of scheme to provide institutional fi nance to MSME’s but corruption and long procedures makes it diffi cult for MSME’s to avail the benefi ts of these schemes. Lack of Basic Infrastructure: MSME’s are growing rapidly but does not have access to basic infrastructure such as power, water, road or connectivity to towns, telecom, etc. Further government support is limited in providing basic infrastructure facilities to MSME’s in all areas of the country. Access to Market: In digital era, marketing play a signifi cant place but due to lack of funds and professional knowledge, MSME’s adopt poor advertisement and selling methodologies which restrict the reach of their products despite of good quality. Further there is poor linkage between Heavy industries and MSME to sale their products. Access to Modern Technology: The owners of MSME’S are not aware of advanced technologies of production. Their methodology of production is outdated which cause low quality production at higher cost. Labour Laws: All the laws related to all aspects of manufacturing and service concern are very complex and compliance with these laws is practically diffi cult. The various decisions of factory’s are depend on the factory commissioner and inspector, so there are so many chances of red tapeism in the operation of MSME’S. Access to Raw material and Other Inputs: MSME’s require raw material, skilled work force and other inputs, which are not available in the market. Due to unavailability of these essentials, it is very diffi cult to produce the products at affordable prices. Lack of Skill development and Training: MSME’s entrepreneurs are generally not well educated and skilled in their fi eld area which restrict quantity and quality of output of MSME’s. The skill developmental schemes conducted by the government are not suffi cient to address the skilling issues of MSME’s. The existing mechanism for addressing revival, rehabilitation and exit of small enterprises is very weak in the country. The most recent Doing Business (DB) Report ranks India 130 out of the 189 economies for resolving insolvencies. It notes that resolving insolvency takes 4.3 years on average and costs 9.0% of the debtor’s estate. Poor tax structure, high level competition with MNC’s and large industries are other major problems faced by MSME sector.


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Recent Government Initiatives:

Public Procurement Policy 2012: Each Ministry/PSU shall set an annual goal and procure minimum 20% from MSME within 3 years.

In many FDI proposals such as FDI in Retail, there is clause that 20-30% inputs shall be procured only from MSME.

Labour Reforms: Introduction of Shram Suvidha Portal to compliance with labour laws, fl exible & time bound labour inspection scheme and Unique Labour identifi cation number (LIN) to every unit. MUDRA Scheme: This is the fi rst ever credit scheme designed for micro entrepreneurs or household enterprises. Lesser documents formality, no collateral and cheap interest rate are some of the major features of this scheme. Connecting last mile fi nancer with Mudra bank is another remarkable feature of the scheme to provide credit facility to each household enterprise. UdyogAadhaar Memorandum (UAM): This is a path breaking step to promote ease-of-doing-business for MSMEs in India as the UAM replaces the fi ling of manual Entrepreneurs’ Memorandum (EM part-I & II) with online facility of fi ling EM and each MSME to instantly get a unique UdyogAadhaar Number (UAN). The information sought is on self-certifi cation basis and no supporting documents are required at the time of online fi ling of UAM. A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE): ASPIRE has been launched with an objective to set up a network of technology centers, incubation centers to accelerate entrepreneurship and also to promote start-ups for innovation and entrepreneurship in rural and agriculture based industry with a fund of Rs 210 Cr. Scheme of Fund for Regeneration of Traditional Industries (SFURTI): The objectives of SFURTI is to organize the traditional industries and artisans into clusters to make them competitive and provide support for their long term sustainability by way of enhancing the marketability of products, improving the skills of artisans, making provision for common facilities and strengthening the cluster governance systems. Stand Up India: Recently government approved “Stand-Up India Scheme” to promote entrepreneurship among SC/ST and Women entrepreneurs. The Scheme is intended to facilitate at least two such projects per bank branch, on an average one for each category of entrepreneur. It is expected to benefi t at least 2.5 Lakh borrowers in time limit of 36 months from the launch of the Scheme. Credit Linked Capital Subsidy Scheme: It has been implemented by the government for up-gradation of technology. Under this 15% (subject to maximum of Rs.15.00 lakhs) upfront subsidy on capital investment for technology upgradation is provided to micro and small enterprises for modernization of their production equipment (plant and machinery). ZED Scheme: It aims at enabling the advancement of Indian industry to a position of eminence in the global marketplace and leverage India’s emergence as the world’s supplier through the ‘Made in India’ mark.

Measures need to be taken:

Tax reforms: There is need to roll out GST to simplify tax structure and to reduce tax spending of MSME’s. Further there is need to provide tax incentives to MSME sector such as increase tax exemption limit to avoid tax evasion. Industrial Training Institutes and Management Schools: There is need to establish new industrial schools or upgrade previous ones to include modules on management, labour laws, accounting, fi nancial markets, and procurement and marketing skills. Promote R&D: To comply with rapidly growing and changing world, there is need to promote R&D in MSME sector so that new products can be developed such as Phulkari of Punjab, bamboo works of Assam, etc.E-Commerce and Marketing: Rather than depending on private e-commerce companies only, government shall endeavour to create a dedicated e-commerce platform for marketing of MSME sector.


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Role of Industrial Development in minimizing regional inequalities

Introduction:

Rising inequality in India is one of the major challenge. There are multiple types of inequality in India such as inter- regional inequality,social inequality in terms of caste and income and intra-regional inequality in terms of rural and urban disparity. According to Oxfam report 57 billionaires in India own as much as the bottom 70% of the population and, more broadly, the richest one percent holds 58% of the country’s total wealth. This shows the state of inclusive development in India which is very miserable. However, poverty has reduced worldwide signifi cantly as one-third of the population of the world lived in poverty in 1981, whereas the share was 18 per cent in 2001.The decline is largely due to rapid economic growth in population rich countries like China and India. There are, however, remarkable differences between countries and between regions in the developing world. Some regions and countries, notably in East Asia, are rapidly catching up to industrialized countries.

Role of industrialization in economic developmentand reducing inequality:

Industrial development has had an important role in the economic growth of countries like China, the Republic of Korea (Korea), Taiwan and Indonesia. Along with accelerated growth, poverty rates have declined in many countries.Some countries have managed to achieve growth with equity, whereas in others inequality has remained high.Rapid economic growth is often essential for achieving a reduction in absolute poverty. As growth may be associated with increased income inequality, it does not automatically address the whole poverty problem.Industrialization is often essential for economic growth, and for long-run poverty reduction. The pattern of industrialization, however, impacts remarkably on how the poor benefi t from growth. Pro-poor economic and industrial policies focus on increasing the economic returns to the productive factors that the poor possess, e.g. raising returns to unskilled labour, whereas policies promoting higher returns to capital and land tend to increase inequality, unless they also include changes in existing patterns of concentration of physical and human capital and of land ownership.Use of capital-intensive methods instead of labour-intensive ones tends to increase income disparities, as does the employment of skill-biased technologies, especially where the level of education is low and human capital concentrated.As enterprises are often concentrated in urban areas – because of ready access to skilled labour force, better infrastructure, larger markets and technological spillover industrialization may increase inequality between urban and rural areas.Promoting development of rural non-agricultural activities, like production in small and medium-sized enterprises (SMEs) or cottage industries, decreases this disparity. On the one hand these industries are labour intensive which provides maximum employment in non-agricultural season and on the other hand decreases rural-urban disparities. These industries employ a large number women which reduces gender inequality.

Industrialization in India and reduction in poverty and inequality:

In India poverty has declined from 44.5 per cent to 26.1 per cent from 1981 to 2001 which further reduced to 21.9% in 2018.India has successfully implemented Gandhian model of economic growth which envisages to develop cottage industries and medium and small industries for economic growth.The Indian MSME sector is the backbone of the national economic structure and has unremittingly acted as the bulwark for the Indian economy, providing it resilience to ward off global economic shocks and adversities.


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MSMEs contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities as well as 33.4% of India’s manufacturing output. They have been able to provide employment to around 120 million persons and contribute around 45% of the overall exports from India.Increase in investment in agriculture led to increase in agricultural poverty in India which further translated into agricultural productivity. Increase in farm mechanization however reduced jobs for agricultural labourers which were absorbed by village cottage industries and food processing industries.Economic Reforms in the country in 1991 greatly improved investment in India which further led creation and employment opportunities to rural youths and agricultural labourers.Agricultural labourers also migrated towards industries during non-agricultural seasons.

Conclusion:

Increase in investment in India after economic reforms and increased investment in agriculture sector has signifi cantly reduced inequality and poverty in India but still there is a wider gap between urban-rural inequalities. Increased income of farmers post green revolution has fi lled the wider gaps between urban-rural inequality but that too to some extent only as it was limited to few areas of the country. Similarly, after economic reforms western and southern India benefi tted more. These factors have led to regional disparity in India in term of income and development. Hence, India need to implement more policies based on inclusive development rather than benefi tting few regions of the country.

Agro-based Industries: Problems and Prospects

Introduction:

India has constantly improved its agriculture infrastructure in past few years. This has led to increase in its agricultural productivity which has touched a new high of 2.07 quintal/hectare in 2014-15. To increase the value of agricultural produce, government has laid a special emphasis on agro-based industries to increase the income of farmers. Agricultural export policy aims to double the agricultural export by 2022. Pradhan Mantri Kisan SAMPADA Yojana is a central sector scheme which has brought all marine and agro processing industries under one umbrella.

Role of Agro-based industries in India:

Accounting for about 32 per cent of the country’s total food market, the Government of India has been instrumental in the growth and development of the food processing industry.The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries in India and is ranked fi fth in terms of production, consumption, export and expected growth.It contributes around 8.80 and 8.39 per cent of Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13 per cent of India’s exports and six per cent of total industrial investment.

Government’s initiatives in setting up of Agro-based industries:

Mega Food Park The Scheme of Mega Food Park aims at providing a mechanism to link agricultural production to the market by bringing together farmers, processors and retailers so as to ensure maximizing value addition, minimizing wastage, increasing farmers income and creating employment opportunities particularly in rural sector. The Mega Food Park Scheme is based on “Cluster” approach and envisages creation of state of art support infrastructure in a well-defi ned agri / horticultural zone for setting up of modern food processing units in the industrial plots provided in the park with well-established supply chain. Mega food park typically consist of supply chain infrastructure including collection centres, primary processing centres, central processing centres, cold chain and around 25-30 fully developed plots for entrepreneurs to set up food processing units.


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Currently there are seventeen Mega food parks in India with specialized food parks such as millet based food park and marine food parks.

Cold Chain The objective of the Scheme of Cold Chain, Value Addition and Preservation Infrastructure is to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer. It covers creation of infrastructure facility along the entire supply chain viz. pre-cooling, weighing, sorting, grading, waxing facilities at farm level, multi product/ multi temperature cold storage, CA storage, packing facility, IQF, blast freezing in the distribution hub and reefer vans, mobile cooling units for facilitating distribution of horticulture, organic produce, marine, dairy, meat and poultry etc. The scheme allows fl exibility in project planning with special emphasis on creation of cold chain infrastructure at farm level.Schemes such as operation greens further aims to enhance facilities for preservation of most sought perishable items such as Tomatoes, Onions and Potatoes.

Agro Processing Cluster The scheme aims at development of modern infrastructure and common facilities to encourage group of entrepreneurs to set up food processing units based on cluster approach by linking groups of producers/ farmers to the processors and markets through well-equipped supply chain with modern infrastructure.Each agro processing clusters under the scheme have two basic components i.e. Basic Enabling Infrastructure (roads, water supply, power supply, drainage, ETP etc.), Core Infrastructure/ Common facilities (ware houses, cold storages, IQF, tetra pack, sorting, grading etc) and at least 5 food processing units with a minimum investment of Rs. 25 crore. The units are set up simultaneous along with creation of common infrastructure. At least 10 acres of land is required to be arranged either by purchase or on lease for at least 50 years for setting up of Agro Processing Cluster.

Scheme for Creation of Backward and Forward Linkage The objective of the scheme is to provide effective and seamless backward and forward integration for processed food industry by plugging the gaps in supply chain in terms of availability of raw material and linkages with the market. Under the scheme, fi nancial assistance is provided for setting up of primary processing centers/ collection centers at farm gate and modern retail outlets at the front end along with connectivity through insulated/ refrigerated transport.The Scheme is applicable to perishable horticulture and non-horticulture produce such as fruits, vegetables, dairy products, meat, poultry, fi sh, Ready to Cook Food Products, Honey, Coconut, Spices, Mushroom, Retails Shops for Perishable Food Products etc.The Scheme would enable linking of farmers to processors and the market for ensuring remunerative prices for agri produce. The scheme is implemented by agencies/ organizations such as Govt./ PSUs/ Joint Ventures/ NGOs/ Cooperatives/ SHGs / FPOs / Private Sector / individuals etc.The Government of India has come out with the Transport and Marketing Assistance (TMA) scheme to provide fi nancial assistance for transport and marketing of agriculture products in order to boost agriculture exports. It will help to assist Indian agriculture produce to reach industries easily.

Food Safety & Quality Assurance Infrastructure Quality and Food Safety have become competitive edge in the global market for food products. For the all-round development of the food processing sector in the country, various aspect of Total Quality Management (TQM) such as quality control, quality system and quality assurance should operate in a horizontal fashion. Apart from this, in the interest of consumer safety and public health, there is a need to ensure that the quality food products manufactured and sold in the market meet the stringent parameters prescribed by the food safety regulator.Institutions like Agricultural & Processed Food Products Export Development Authority (APEDA) has helped India to combat Sanitary and Phyto-sanitary issues which were raised by western countries.


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Food Safety and Standards Act has led to establishment of food safety regulator in India which has ensured quality check of the processed food products.

Conclusion:

India’s agriculture export policy aims to double India’s export basket by 2022 which will be only possible when India’s agro-based products will fi nd consumers in international market.The Government of India plans to triple the capacity of food processing sector in India from the current 10 per cent of agriculture produce and has also committed Rs 6,000 crore (US$ 936.38 billion) as investments for mega food parks in the country, as a part of the Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters (SAMPADA). This is also in consonance with government’s aim of doubling the farmer’s income by 2022. India’s commitment to develop this sector can be assessed by the fact that it has allowed 100 per cent FDI in marketing of food products and in food product e-commerce under the automatic route. These steps will have dual benefi ts for Indian economy of reducing rural poverty on the one hand and increasing forex exchange on the other.

Coir Industry India accounts for about 66% of the global production of coir and coir products. Kerala accounts for majority of coir industry in India. The geographical location of the coir industry is dependent on the availability of raw material (Coconut) available in states like Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Odisha.

Government Initiatives

Coir Udyami Yojana- Rejuvenation, Modernization and Technology upgradation has been renamed as Coir Udyami Yojana. This is a credited linked subsidy scheme which provides 40% as Govt. subsidy, 55% as Bank loan and 5% benefi ciary contribution for setting up of coir units with project cost up to Rs.10 lakh No collateral security/third party guarantee is required and there is no income ceiling. Assistance is available to individuals, companies, self help groups, NGOs, institutions registered under Societies Registration Act, 1860, co-operative societies, joint liability groups and charitable trusts. Coir Vikas Yojana –

It involves skill upgradation and quality improvement of the products. It also includes Mahila Coir Yojana– training for men & women coir workers and providing subsidized ratts to women workers. Its other components are development of production infrastructure, domestic market promotion, export market promotion etc.

Significance of Coir Industry

With increasing awareness of environment-friendly products, the demand for coir-based items is on the rise in the international and domestic markets. Rise of e-commerce have led to an increased demand and marketing of mats and mattresses made of coir.

Challenges

Climate Change and shortages of monsoonal rains can affect the yields of coir industry. There is a competition from countries like Indonesia, Vietnam and Sri Lanka that can affect the profi t margins of the Indian coir industry. Problems of raw materials include poor quality of raw materials and high cost of materials. Labour problems include labour absenteeism, low wages, low skills, low labour productivity. Other challenges include non-availability of fi nancial credit, problems in marketing of fi nished goods etc.


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Impact of 4th Industrial Revolution on Global Manufacturing Sector

The fourth industrial revolution is the blending of technologies of the physical, digital and biological world, which creates new opportunities and affects political, social and economic systems. The fourth industrial revolution fundamentally transforms modern production, thanks to new technological achievements, including digitalization, artifi cial intelligence and the Internet of things (IoT), new materials and biotechnology.Manufacturing has changed for the sites that are leading the 4IR technology adoption and are willing to undertake the necessary organizational, operational and fi nancial transformation. They:

Leverage cameras and wearables to facilitate entering buildings, checking out at the company storeand even receiving urgent messages.Hold conversations around line and shift performance informed by digital smart whiteboards displaying real-time metricsand supported by machine learning for root cause problem-solving of issues.Monitor the status of machinery both in real-time as well as digitally, predicting likely failure points and fl agging to the relevant parties.Allow production machines to learn from their own mistakes and adjust their settings to improve their long-term quality output every few seconds.Use mixed reality tools to diagnose breakdowns– literally “x-raying” machines to identify the source of issue, adjust settings in a standardized way and receive training.

Impact on global manufacturing

Industry 4.0 is expected to accelerate over the next 2-3 years transforming manufacturing processes on the way. Industry 4.0 will make supply chains and production processes more interconnected, effi cient and fl exible, allowing mass-customisation and virtual production.Developed countries, with Germany in particular, are at the forefront of industrial revolution. Developed countries aim to boost labour productivity, offset high production costs and solve the issue of ageing populations by implementing Industry 4.0 concepts.Industry 4.0 could provide more opportunities for developing countries, such as Malaysia or China. By importing Industry 4.0 technologies and combining them with low costs of production factors emerging countries can leapfrog in the value chain and solve societal issues.Three key types of industries to implement Industry 4.0 are Industries with wide product range (such as food and beverages), commodity producers (metals, agriculture) and precision-driven (pharmaceuticals and electronic components) are most likely to invest in Industry 4.0.The global distribution of lighthouses{ manufacturers who have adopted 4 th industrial revolution technologies};


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Major global leaders in adopting new technologies in manufacturing process:

Germany: With the purpose of maintaining itself as one of the leader countries in technological innovation and competitiveness, in 2012 the German government published The New High Tech Strategy Innovations for Germany (HTS), one of the most ambitious projects to ratify their worldwide technological leadership through new innovation policies. Currently, many German companies are already offering services and solutions for organizations that are willing to implement this model. One of this is Siemens, which provides solutions through its Digital Factory division. Siemens offers its customers a hardware and software product portfolio that allows the integration of data in development, production, and supply stages; the name for this solution is Digital Enterprise.

USA: They started the Nationwide Network for Manufacturing Innovation (NNMI) created as a public-private association that promotes the use of processes and technologies in advanced manufacturing. Furthermore, they provide infrastructure to small manufacturing companies and start-ups, so they can use new technologies, speed up the technology transfer process, and facilitate the workers’ training process. The digital manufacturing strategy focuses on the development of a marketplace of applications and on the full integration of manufacturing supply chains in the country.

Canada: The Canadian government has designed a project named Digital Canada, which consists of 150 initiatives focused on 5 pillars: Connection, Protection and Cyber Security; Economic Opportunities; Digital Government; and Digital Canadian Content.

European Union: The main policies related to Industry 4.0 in Europe are the ones proposed by the European Commission in 2012, which mentions that European SMEs should be backed up in terms of value added and advanced manufacturing. The initiative called Reindustrializing Europe highlights the potential of advance manufacturing to regenerate the industrial base of Europe, under the Horizon 2020, which is the innovation and research program that leads efforts of member countries in these topics. In terms of employment, the Grand Coalition for Digital Jobs program was developed as the main strategy of the EU; its main goal is to strengthen digital skills on workers within the European Union, and to make digital education more attractive and aligned with the industry needs.

The above mention countries enjoy benefi ts of prerequisite technology base, public funding, large network of MSME’s, and government initiatives to skill workers.

Countries with huge potential:

CZECH REPUBLIC: In September 2015, the Ministry of Industry and Trade (MIT) presented the Průmysl 4.0 initiative, which identifi es the vision and technological pre-requirements of the country; obligations related to applied research and standardization, as well as the impact of this policy in the labour market, the educational system, and the regulatory framework.

TURKEY : The Digital Conversation Association of Turkey has the following objectives and goals: the digital transformation of the national economy to contribute to the country’s development; to support digital conversion; to provide information for supporting the creation of qualifi ed labour force; to integrate industry players on conversations regarding digital topics; etc. Turkey is one of the main manufacturing countries for the European countries, being Germany the main destination of its manufacturing exports. Reason why the transformation of this industry in Turkey will be highly infl uenced by German companies.

SOUTH AFRICA : The GDP distribution reveals that South Africa is a country focused on services (67.4% for it’s GDP), industry (30.3%), and agriculture (2.4%). South Africa has the potential for the developing of an Industry 4.0, mainly in the extracting industries, such as mining; which requires the implementation


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of technologies that connects sensors and allowing them to process the vast amount of information generated. This will allow the sector to remain competitive in a complex global environment.

INDIA : The country has implemented different economic and industrial policies aimed to direct the country on the path to adopt the Industry 4.0. An example is Make in India, a measure taken to strengthen and improve competitiveness in the manufacturing sector. In September 2014, the government presented an initiative with the purpose of positioning the Asian country as one of the main hubs of global manufacturing and design. Likewise, various projects have been proposed to improve and expand industrial parks, and to increase the country’s industrialization and to make manufacturing the main economic driver in the country.

Primary challenges which the above countries might face in transition to Industry 4.0 are :

Evolving appropriate strategy. Availability of skilled workers. Integration of supply change. Innovation challenge.

Governments, technology providers and manufacturers will have to cooperate in order to succeed in Industry 4.0 implementation. Collaboration of three parties would set required physical IT infrastructure, common rules, speed up exemplary projects and pin-point areas on which to focus R&D. The afore mentioned factors would create a sound basis to successfully develop and implement Industry 4.0 solutions.

Rural Tourism As per the report of World Travel and Tourism Council, India is the world’s seventh largest tourism economy in terms of its total contribution to the country’s GDP. According to the latest data available, travel and tourism generated Rs. 14.1 trillion in 2016, which is the world’s 7th largest in terms of absolute size, the sum is equivalent to 9.6% of country’s GDP. This sector has supported 40.3 million jobs in 2016, thus making India global second in terms of totalemployment supported by travel and tourism. It accounts for 9.3% of total jobs in country. In 2017, it is estimated to have 6.7% growth.However, this remarkable growth of India’s travel and tourism sector is being driven by domestic tourism which accounted for 88% of the sector’s contribution to GDP in 2016. Thus there lies signifi cant potential in India’s tourism sector.

Time and affordability play an important role in selecting the destination. Traditional tourist spots are often quite congested during the peak tourist seasons. Countryside has always been a stress reliever for the urban people. This is more evident from the fact that more than 50% of world’s population lives in urban areas, a proportion that is expected to increase to 66% by 2050.Any form of tourism that showcases the rural life, art, culture and heritage at rural locations, thereby benefi tting the local community, economically and socially as well as enabling interaction between the tourists and the locals for a more enriching experience can be termed as rural tourism.Rural tourism is essentially an activity that takes place in the countryside. It is multi-faceted and may entail farm/agricultural tourism, cultural tourism, nature tourism. As against conventional tourism, rural tourism has certain typical characteristics like it is experience oriented, the locations are sparsely populated, it is pre-dominantly in natural environment, it meshes with seasonally and local events and is based on preservation of culture, heritage and tradition. Ministry of Tourism in India has laid a great deal of emphasis on the development of such rural tourism sites which boast of rich art, culture, handloom, heritage and crafts. These villages are affl uent in both natural beauty and cultural splendour.Rural tourism is supposed to generate increasing benefi ts to rural areas in terms of rural productivity, conservation of rural environment and culture, local people’s involvement and a suitable way of adapting traditional beliefs and values to modern times.


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Major types of Rural Tourism:

Agro-Tourism It involves any agriculturally based operation or activity that brings visitors to a farm or ranch. Agro- tourism has different defi nitions in different parts of the world, and sometimes refers specifi cally to farm stays, as in Italy. Elsewhere, agro-tourism includes a wide variety of activities, including buying produce direct from a farm stand, navigating a corn maze, slopping hogs, picking fruit, feeding animals, or staying at a bed and breakfast (B&B) on a farm.Need to promote agro-tourism in rural areas:

Tourism has registered phenomenal growth worldwide—contributes 11% of the world work force and 10.2% of global GDP. A new job is added every 2.5 second to this sector. Agro-tourism activities can help in generating more jobs in rural areas which will help in reducing the large scale migration from rural areas Many states are running successful ventures which is helping in augmenting income of rural peopleMaharashtra State Agro & Tourism (MART)- there are 150 agro-tourism centres in state which are running without government help. The state government has subsidized tourism activities.Rural and health tourism is a successful venture in Kerala. Himachal Pradesh government is encouraging people to create required facilities in their home to register for tourism activities.

Promotion of agricultural tourism needs conceptual convergence with rural tourism, eco-tourism, health tourism, adventure tourism and culinary adventure. Potential rural areas should be identifi ed in different states for varied purposes and infrastructure to strengthen the people.Cultural Tourism

To allow tourists to understand the local culture and related activities such as rituals and festivals. Nature Tourism

It is responsible for travelling to natural rural areas which conserve environment and improve people’s lives. It is essentially environment friendly tourism.

Adventure TourismIt is any constructive activity which tests endurance of person as well as his limits.

Ethno TourismExpand horizons to view different cultures and know about various ethnic and cultural lifestyles and benefi ts.

Different Schemes for Tourism Development:

Swadesh Darshan Scheme guidelines for integrated development of theme based circuits. India‘s natural heritage has a huge potential for development of tourism and job creation.

PRASAD Pilgrimage Rejuvenation for Spiritual Augmentation Drive Pilgrimage tourism is a form of tourism motivated by religious sentiments as India is land of many religions like Hinduism, Islam, Buddhism, Sikhism, Jainism, and Christianity etc. Religion and spirituality are common motivations for travel, with major tourist destinations having developed largely as a result of their connections to sacred places, persons and events.

Special Tourism Zones Union budget 2017-18 has announced that fi ve special tourism zones, anchored on SPVs, will be set up in partnership with states. This would help in introducing incredible India’s second global campaign to strengthen India’s position as an attractive tourist destination.


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e-tourist visa facility To facilitate arrival of international tourists, tourism ministry has been working very closely with Ministry of Home Affairs and Ministry of External Affairs for easing of the visa regime in the country over a period of time. In order to make rural tourism attractive, Ministry of Tourism is promoting farm tourism as niche products. Ministry is also encouraging home stay facilities in rural areas.

Impact of Rural Tourism:

Positive Impact on economy- With increased number of tourists visiting countryside, there will be a boost in the income level of the people due to increased level of trade among the people. This will generate jobs among the youths. Traditional handloom and handicrafts- It is a matter of pride for local people to show their local specialty. Through tourism, the visitor can have the benefi t of directly buying the fi nished products from the local people. Exchange of ideas- The tourists will create a new idea among the villagers while interacting with locals. This entails increasing interest in education, preventive health care, modern gadgets etc. this will help universal literacy. Connectivity- With more tourists visiting the villages, there will be improvement in the connectivity by means of roads, increase in public transport etc. Preserving nature- Villages close to sanctuaries and reserve parks can teach the idea of preserving the nature to their urban counterparts as they live by the side of nature for centuries. Tourists may develop an interest in the local region and traditional rituals that act as a catalyst for social harmony.

Negative Urban transformation - To facilitate tourism, there would be an increase in the infrastructure development of the countryside. This may lead to concretization of rural area and may distort the natural beauty. Besides, infl ux of tourists may lead to exploitation of natural resources. Tourism may have an adverse effect on the traditional livelihood of people. The village people may shift from agricultural and other traditional livelihoods to lucrative livelihoods related to tourism. This may in turn have a negative impact on rural tourism.

Scope for Improvement:

In order to make tourists feel comfortable while visiting any place, they may be provided detailed information regarding their place of visit in advance. They may also be informed about any particular custom prevalent in that region so that tourists may prepare themselves accordingly. There is a necessity for having good infrastructure and logistics support in villages. Roads connecting to the nearest railway station or highways would improve accessibility to the villages. However, instead of having more hotels or guest houses, it is better to encourage homestay. The tourists can have taste of traditional practices along with local recipes prevalent in rural India. This would help the tourists to connect to the villagers in less time. The exotic fl ora and fauna of rural India can be a huge source of learning for students. Students’ excursion can also be allowed to make them learn value of nature in this way. Language can be an important issue when it comes to tourism. Hence, tourists may be given the option of interpreters in case they face any diffi culty. Hence there is need to have trained and qualifi ed interpreters for this purpose. The traditional products recognized by GI tags are always showcased on the national as well as international platforms and have a huge market demand. The government may take steps to ensure that tourists get a fi rst-hand experience in seeing how these products are being made, packed and showcased.


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Many states of India are blessed with medicinal herbs and other ayurvedic products which have strong medicinal values. The government can develop suitable infrastructure to capture such tourists who can avail medicinal facilities in such villages of India. The role of state government is very important in promoting rural tourism. Each state has different potential to attract tourists hence it is necessary that state governments identify this potential and work in close coordination with the union government to promote rural tourism. Tourists may be advised well in advance not get involved into any local issues which may lead to law and order problems. The government may conduct a survey among tourists and get to know about their feelings regarding the place of their visit. Based on their feedbacks, measures may be adopted to improve tourism. Concerted efforts from both union and state governments to identify areas and explore tourism potential in this sector. That is of utmost importance to promote rural tourism in the country.

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ECONOMIC & HUMAN GEOGRAPHY - IAS Score

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