Archive for July, 2016

While China has used science to fuel its economic growth, India has done the reverse: invest in science during periods of economic prosperity. The results and the impact on their economies are starkly different, writes Hari Pulakkat

Like any young scientist, Prasad Hegde had to look hard for research positions around the world after a PhD. But unlike many Indian students in the US, Hegde looked eastward to do postdoctoral research. India was not an option as there were few positions available. He chose Taiwan over the US and EU, but it did not work out. Then he moved to China, which like India did not have a tradition of post-doctoral research, but was creating such jobs in large numbers. Hegde spent two years in Wuhan, studying exotic states of matter created by collisions of atomic nuclei, before returning to India and a job at the Indian Institute of Science (IISc) in Bengaluru.

Hegde’s stint in China gave him insights into Chinese science and state of mind, the Chinese work culture and attitudes towards research. At least in his field of heavy ion physics, India had more scientists than China. “This kind of science was new to them,” he says. But China was creating new fields of science and large research teams. The labs had plenty of money and were more flexible in hiring. “They like to do things in large scale and they do things fast,” says Hedge, who is now an assistant professor at the Centre for High Energy Physics at IISc.

Over the last four decades, China has been developing the country at a frenetic pace. As it built its bridges and dams, its coal plants and rockets, the country also invested heavily in science and engineering research. Senior Chinese political leaders, most of whom had their basic education in science or engineering, trusted the power of science to transform the country’s economy and society. At least in quantity, China is about to overtake the US as the leading scientific nation in the world. It is also creating hitech industries of the future, and set to become an important player, if not the leader, in the twenty-first century knowledge economy.

Chinese scientific institutions have had funding increases of 10% or more every year in the last two and a half decades. While China’s GDP itself rose rapidly, its investments on R&D relative to its GDP also increased quickly. In 1991, China’s GDP was $413 billion. It rose to $11 trillion last year. In 1991, China’s investment in R&D was 0.7% of its GDP. It now spends 2.09% of its GDP on R&D. India has been increasing spending on science since the year 2001, but not relative to its GDP: it spends slightly less than 0.9% of its GDP on R&D.

The Chinese scientific establishment is now so big that it can be compared only with the US.In 1991, China spent 5% of what the US spent on R&D.By 2010, it was spending 44% of what the US invested in R&D. By last year this figure has hit 75%, according to data from the Industrial Research Institute and R&D magazine. In scale, China is rapidly closing the gap in research with the US.China contributes 2 0% of the world’s spending on R&D, compared with 3.6% for India. (more…)

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Delhi Concerned Over High Cost of Ship Missiles

India plans to further expand its strategic ties with Israel through more R&D projects to develop hi-tech weapon systems, as also clinch several deals in the pipeline, but has expressed concern over the exorbitant costs involved in deploying a jointly-developed surface-to-air missile system on frontline Indian warships.

Sources said this came through in the 12th meeting of the high-powered joint working group between the two countries, co-chaired by defence secretary G Mohan Kumar and director general of Israeli defence ministry Major General Udi Adam (retd), which was held in New Delhi on July 13.

Though there has been no official word on the JWG meeting, sources said defence minister Manohar Parrikar has red-flagged the “high costs” involved in production of the medium-range surface-to-air missile (MR-SAM) systems called Barak-8 by Israel.

First, there was a huge delay by DRDO-Israel Aerospace Industries (IAI) joint venture to develop and test the MR-SAM systems, which are to be produced in bulk by defence PSU Bharat Dynamics Ltd (BDL). Now, the projected costs in deploying them have also raised eyebrows.

As earlier reported by TOI, while the naval MR-SAM project was sanctioned by the Cabinet Committee on Security in December 2005 at an initial cost of Rs 2,606 crore, the IAF one for nine squadrons worth Rs 10,076 crore was cleared in February 2009. While the naval system was tested for the first time in November 2014, the IAF one was tested thrice earlier this month.

With an over 70-km interception range against enemy aircraft, drones and missiles, the naval MR-SAM has already been fitted on the three new Kolkata-class destroyers. But each MR-SAM system is now projected to cost around Rs 1,200 crore for the 12 under construction warships in Indian shipyards, including aircraft carrier INS Vikrant, four guided-missile destroyers and seven stealth frigates.“Consequently, the orders are on hold as of now. A review to cut costs is in progress” said a defence ministry source.

This has also led to the estimated Rs 14,000-crore Army project to acquire these MRSAMs, which come with missiles, launchers, surveillance and threat tracking radars, and fire control systems, to be kept in abeyance till now.

The JWG also discussed probable joint R&D projects in fields like high-endurance UAVs (unmanned aerial vehicles), micro-satellite surveillance systems, armoured vehicles and different types of missiles and precision-guided munitions, said sources.

Then, there are several big-ticket deals in the pipeline. These include two more Israeli Phalcon AWACS (airborne warning and control systems), which are to be mounted on Russian IL-76 military aircraft, and four more Aerostat radars.

The IAF is also on course to acquire 164 laser-designation pods or ‘Litening-4’ for fighter jets like Sukhoi-30MKIs and Jaguars as well as 250 advanced ‘Spice’ precision stand-off bombs capable of taking out fortified enemy underground command centres.

The Army, in turn, is looking to acquire the Israeli third-generation Spike antitank guided missile systems, with an initial 321 launchers and 8,356 missiles, which too is making slow progress due to the high costs involved. The force is likely to go in for an initial two regiments of the Israeli Spyder quick-reaction SAM systems to defend its forward units for enemy air strikes.

Source : The Times of India (Delhi)

Foreign companies to be allowed to invest in VCFs as part of offset obligations

A Rs 30,000-crore corpus for venture capital funds (VCFs) for defence production by foreign companies -that’s the big idea the government is working on.

A ministry of defence (MoD) concept note, which ET has reviewed, proposes that foreign defence companies that have sold equipment to India can invest in VCFs as part of their offset obligations (at least 30% of the contract value must be invested back in India).

Foreign companies can invest up to 25% of their offset obligations in such funds. But the capital won’t be repatriable, only dividends will be. Such VCFs will be cleared by the defence ministry. They will have to register with the Securities & Exchange Board of India, as all other funds do. The government sees a `30,000-crore potential for such VCFs. Investment, the note says, will be in companies undertaking defence research and in medium, small & micro enterprises (MSMEs).MSMEs are typically part of the supply chain for larger projects.

“It is expected that in a span of the next five years, the fund will be of the size of `30,000 crore,” another note on the defence offset fund drawn up by the MSME ministry says.

“This (the idea for a VCF) is to enable MSMEs to access funds in order to receive technology and contribute to the growth of Indian defence manufacturing and exports, hitherto perceived to be constrained by lack of access to funds,” the MoD note reads. Ankur Gupta, vice-president of EY India, told ET: “The proclivity of foreign vendors to utilise this proposed avenue could depend upon the lock-in period, guaranteed rate of return, if any, and safety of the principal.”

There have been at least two efforts in the past year to set up a defence-focussed VCF, but neither received MoD clearance. Senior officials told ET the government has been in consultations with funds such as Blackstone and Sequoia to understand global best practices.

The fund is the latest in a series of efforts by MoD to make offset obligations easier to meet. Fines of over $35 million have been imposed on foreign vendors over the past few years. Foreign companies have invested just half of the $1.3 billion investment obligation they had under offset clauses.

Source – The Economic Times (Delhi)