QUESTION :  Discuss how Artificial Intelligence can be used to meet India’s socio-economic needs. 





 India’s Innovation Potential



 Recognising the innovation potential of India, the government is putting in place a framework of collaboration, facilitation and regulation to boost innovative ecosystem of India.



  • Innovation in India is being structured around the triad of collaboration, facilitation and responsible regulation. It is advanced by cross-disciplinary collaboration.
  • India is the fastest growing country in terms of Internet usage, with over 700 million users and the number projected to rise to 974 million by 2025.
  • The JAM (Jan Dhan, Aadhaar, Mobile) trinity has 404 million Jan Dhan bank accounts with 1.2 billion Aadhaar and 1.2 billion mobile subscribers.
  • There is a potential to add over $957 billion to India’s GDP by 2035 with artificial intelligence (AI).
  • The realistic potential of technology for India resonates in the ‘Amara law’ named after Roy Amara, a Stanford computer scientist, who said that “People tend to overestimate the impact of a new technology in the short run, but to underestimate it in the long run.”




Recently, Indian government organised two event to boost innovation:

 1) Vaishvik Bharatiya Vaigyanik (VAIBHAV) summit:

 Several overseas Indian-origin academicians and Indians participated to ideate on innovative solutions to various challenges.

 2) Responsible AI for Social Empowerment (RAISE) 2020 summit:

It charter a course to effectively use AI for social empowerment, inclusion, and transformation in key sectors such as health care, agriculture, finance, education and smart mobility.



 Innovation needs risk capital in terms of resources and psychological security for researchers. It needs an environment where it is safe to fail. The government has been building a comprehensive framework to this end.



  • Innovation in Science Pursuit for Inspired Research (INSPIRE) scholarships: Attract youth talent to the study of science at an early age and thus build the required critical human resource pool for Science & Technology system.
  • Ramanujan Fellowship: Meant for brilliant Indian scientists from outside India to take up scientific research positions in India.
  • Knowledge Involvement in Research Advancement through Nurturing (KIRAN) scheme: Providing avenues to women scientists and technologists for capacity building.
  • Smart India Hackathons (SIH): To provide students a platform to solve some of pressing problems of society.
  • Atal Innovation Mission (AIM): To promote innovation and entrepreneurship across India.
  • Biotechnology Ignition Grant (BIG) scheme: Largest early stage biotech funding programme in India. Aims to encourage researchers to take bio-technology closer to market through a start up.
  • Future Skills PRIME (Programme for Reskilling/Upskilling of IT Manpower for Employability) capacity building platform
  • Triad of Scheme for Transformational and Advanced Research in Sciences (STARS), Scheme for Promotion of Academic and Research Collaboration (SPARC) and Impactful Policy Research in Social Science (IMPRESS): Common objective is to boost India specific research in social and pure sciences.
  • National Mission on Interdisciplinary Cyber-Physical Systems: Aims to catalyse translational research across Al, IoT or the Internet of Things, Machine Learning, Deep Learning, Big Data Analytics, Robotics, Quantum Computing, Data Science.

Initiatives by other regulatory bodies

  • The Reserve Bank of India, Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority of India allow for regulatory sandboxes for piloting new ideas.
  • The Telecom Regulatory Authority of India (TRAI) has recently introduced recommendations for regulating cloud services in India, suggesting a light-touch regulation in collaboration with industry, balancing commercial freedom and principles adherence.



  • Increase R&D spending: Government should formulate policy with the aim of increasing total GERD (Gross domestic expenditure on R&D) to 2% of India’s GDP.
  • Global partnerships in innovation: Global innovation partnerships need to be strengthened by enhancing public-private partnership mechanisms and increased public funds should be earmarked for joint industrial R&D projects.
  • Idea-to-market challenge: Government needs to create a special fund to help Indian innovations to advance their start0ups during difficult times.


 o India has become the third most innovative lower-middle-income economy in the world.

 o India ranks in the top 15 in indicators such as the  (ICT) services exports, govt. online services, graduates in science and engineering, and Research and Development-intensive global companies.

 o India improved the most in three pillars: Institutions (61st), business sophistication (55th), and creative outputs (64th).

 o The consistent improvement in the index rankings is owing to the immense knowledge capital, the vibrant startup ecosystem, and the amazing work done by the public and private research organisations.

 o India Innovation Index 2019 which was released by the NITI Ayog, has been widely accepted as the major step in the direction of decentralisation of innovation across all the states of India.



  • It provides detailed metrics about the innovation performance of 131 countries and economies around the world.
  • Its 80 indicators explore a broad vision of innovation, including political environment, education, infrastructure and business sophistication.
  • It is published annually by Cornell University, INSEAD and the WIPO.

 2020 Theme: Who will Finance Innovation?

 o The GII 2020 sheds light on the state of innovation financing by investigating the evolution of existing mechanisms and by pointing to progress and remaining challenges.




  • There is a need to broaden and improve the capability of top rung educational institutions in the country to produce greater innovation outputs.
  • Increased spending on research and development with greater collaboration between the industry and educational institutions may help to enhance innovation capability.
  • A collaborative platform consisting of all the stakeholders of innovation – innovators, researchers, and investors from the industry should be developed.
  • To be successful in this endeavour, India must make the right institutional, industrial, and policy reforms
  • Encouraging innovation in the private and public sectors of the economy is critical, especially if these companies are to become more competitive globally.




  • Innovation has the potential to build a future where AI will transform education and health care, machine learning will make commerce robust, clean energy will drive economy, gene-editing would help us bring back extinct species and virtual reality will change the way we interact with the physical world.
  • In spite of the challenges facing India’s innovation system, India is presented with an opportunity to become a global innovation hub and eventually transform itself into an innovation-driven economy using its existing resources.


QUESTION : What is offset liability and discuss the significance of the policy in Indian Defence.





  • Offset in Indian Defence



  • Recently, the government diluted the “offset” policy in defence procurement. This Policy decision was taken with a view to reduce cost of defense deals and also in response to a CAG report on the same issue.



  • An offset provision in a contract makes it obligatory on the supplier to either “reverse purchase, execute export orders or invest in local industry or in research and development” in the buyer’s domestic industry.
  • Most countries restrict trade in defence equipment and advanced technologies in order to safeguard national interest. But for commercial gains and for global technological recognition, governments and firms engage in offset deals.



  The Comptroller and Auditor General (CAG) defined offsets as a “mechanism generally established with the triple objectives of:

  • Partially compensating for a significant outflow of a buyer country’s resources in a large purchase of foreign goods
  • Facilitating induction of technology and
  • Adding capacities and capabilities of domestic industry




  • Boosting domestic defence industry: Since defence contracts are costly, the government wants part of that money either to benefit the Indian industry, or to allow the country to gain in terms of technology.
  • Leverage capital acquisitions to develop Indian defence industry by

 o Fostering development of internationally competitive enterprises,

 o Augmenting capacity for Research, Design and Development related to defence products and services and

 o Encouraging development of synergistic sectors like civil aerospace, and internal security”




  • CAG Report: According to the recent CAG report, between 2007 and 2018, the government reportedly signed 46 offset contracts worth ₹66,427 crore of investments.

 o However, the realised investments were merely 8%, or worth ₹5,457 crore.

 o It also noted that there is not a single case where the foreign vendor had transferred high technology to the Indian industry.


  • New Policy: In a response to CAG report, the government has decided not to have an offset clause in procurement of defence equipment if the deal is done through inter-government agreement (IGA), government-to-government or an ab initio single vendor.


  • Misplaced Rationale: The government held that the offset load extra cost in the contract to balance the costs, and doing away with the offsets can bring down the costs in such contracts.

 o However, the higher (upfront) cost of the agreement due to the offset clause would pay for itself by: reducing costs in the long term by indigenisation of production and the potential technology spill-overs for domestic industry.

 Impact of New Policy: As most defence deals are bilateral, or a single supplier deal (given the monopoly over the technology).

 o The dilution means practically giving up the offset clause.

 o This would impact India’s prospects for boosting defence production and technological self-reliance.

 o Further, India has voluntarily given up a powerful instrument of bargaining to acquire scarce advanced technology



  • There is a need to establish a formal mechanism for implementation of the defence offset policy.
  • What India needs is an effective body to handle offsets, liberal FDI and licensing policies, and a better banking provision.
  • Also there is a need for a clear roadmap for transfer of technology through offsets, keeping in view India’s long-term military industrial objectives.


  • India needs to re-conceive or re-imagine the offset clause in defence contracts with stricter enforcement of the deals, in national interest, and in order to aim for ‘Atma Nirbhar Bharat Abhiyan’, or a self-reliant India.

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