Daily Current Affairs

The fate of chips will determine the fate of nations (GS Paper 3, Science and Tech)

Context:

• A human hair is 50-180 microns whereas the novel coronavirus is 0.1-0.5 microns. In comparison, today’s most advanced chips are about half the size of the novel coronavirus in diameter and are shrinking rapidly.
• The fate of nations depends on this infinitesimally small piece of silicon, which can devastate and shape human lives in myriad ways.

 

Dependence on chips:

Apple’s new A16 chip:

• First, Apple’s new A16 chip has over 16 billion transistors in it. And Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading manufacturer of chips, placed over one quintillion (that’s 1 followed by 18 zeros) transistors on just the iPhone chip. Every message, every picture and every call made depends on one chip or the other.
• Apple buys its chips from Cirrus Logic, Kioxia, Skywords and TSMC. It designs these in-house, and the super complex processes that run the iPhone operating system makes Apple a force of nature. Buteven a trillion-dollar company like Apple is not able to manufacture its own chips.
• A16 is made by a single company, in a single building called Building 18 in Taipei. TSMC’s fab is perhaps the world’s most expensive and valuable factory.
• Chips today are manufactured in just a handful of nations: Taiwan, South Korea, the U.S., Japan, the Netherlands, and China.

 

Role of chips in Russia-Ukraine war:

• Second, Russia appears to be unable to dominate Ukraine in the war, one of the reasons being that it is using more brawn than brain. Ukraine is using precision-guided missiles to fight Russia, which it recently procured from its Western allies. These missiles are powered by chips.
• While Russia has some precision-guided missiles, it is unable to manufacture these at the scale required because of Western trade sanctions. Whatever Russia has is a combination of some chips stolen, some made indigenously and some imported in the past.
• The U.S. government’s famous Entity List ensures that this technology does not reach China and Russia and they cannot get ahead in the chips race.

 

Chips in new cars:

• Earlier in 2020, Toyota temporarily shut down production at assembly lines at five domestic group plants in Japan due to the shortage of chips.
• If one want to buy a new car in the U.S., the waiting time is really long.

 

Chips in critical sectors & their shortage:

• Not just the ability to manufacture chips, but also the ability to integrate and synthesise them into complex systems will determine the fate of nations in the coming decades.
• Today, critical sectors such as defence, telecom, electronics and mobility are hugely impacted by the chip shortage, which won’t end until 2023, as per research studies.
• If there ever is a natural disaster in South Korea or Taiwan, it could only worsen the crisis.
• The U.S., European Union, Japan, India and China have poured in about $200 billion into the semiconductors sector, but the impact of that will not be seen now.
• The U.S. was ready to defend Taiwan should there be aggression from China probably because no country in the world has the capability to produce chips better and faster than Taiwan (and South Korea) does.

 

‘Don’t be Foxconned’

• While India has taken a visionary step to subsidise chip manufacturing through the Production-Linked Incentive scheme, there is one cautionary tale that it must bear in mind as it chases global chip manufacturers. It is called ‘Don’t be Foxconned’.
• Like Brazil and Vietnam in the past, in June 2018, Racine County in Wisconsin in the U.S. was led up the proverbial garden path by Terry Gou, Chairman of Foxconn, along with U.S. President Donald Trump and Governor Scott Walker.
• Mr. Gou secured around $5 billion in subsidies and promised thousands of jobs and the world’s best LCD manufacturing plant. But everything remained on paper.
• Despite uprooting people from their homes to build a new factory, not one chip or LCD panel ever got built there.
• Mr. Trump even called the Wisconsin Valley Science and Technology Park the eighth wonder of the world. A manufacturing facility in the municipal records, its designation was quietly changed last month to ‘storage facility’.

 

Challenges for India:

• Indian States, which are competing to court chip manufacturing investments, must also bear in mind that steady electricity and billions of gallons of clean water are required to set up a chip unit, which none of them can offer today.
• Even LCD panel manufacturing is a dream for the future. For example, the proposed Racine plant required about seven million gallons of water per day, which was being called a violation of the Great Lakes Compact by environmentalists.
• Chips manufacturing will require even more. India will get there with prudent strategies and sensible leadership in the coming decade, if all goes well.

 

Conclusion:

• A chip manufacturing plant costs $15 billion-$20 billion which takes years to recoup profitably even if it is runs all year. With global supply chains in turmoil thanks to COVID-19 and the Ukraine war, the game of chips is even more complicated now.
• Every major economic superpower is using its money and its best minds to win this silicon battle. This will impact the lives of citizens in more ways than one. India can afford to lose this war only at its own peril.

 

The online gaming market in India

(GS Paper 2, Government Policies & Interventions)

Why in news?

• An inter-ministerial task force, set up by the Ministry of Electronics and Information Technology (MeitY)in May 2022 has recently submitted its report.
• It was set up to propose contours of a national-level legislation to regulate online gaming.

 

Details:

• It has proposed the creation of a central regulatory body for the sector, clearly defining what games of skill and chance are, and bringing online gaming under the purview of the Prevention of Money Laundering Act, 2002, among other things.
• The task force included the CEO of government think tank NitiAayog, and secretaries of ministries including IT, Home, Finance, Information and Broadcasting, and Consumer Affairs, among others.
•  The task force is understood to have prepared a final report of its recommendations and submitted it to the IT Ministry.

 

Why a central-level law?

• Online gaming so far has been a state subject, but state governments have said they find it extremely difficult to enforce certain rules like geo-blocking certain apps or websites within the territory of their state.
• Also, there is a concern that rules passed in one state are not applicable in another, which has caused inconsistency in how the online gaming industry is regulated in the country. State governments also do not have enough blocking powers like the Centre to issue blocking orders for offshore betting sites.

 

Challenges:

• Stakeholders have highlighted a number of societal concerns that can arise from the proliferation of online games in the country. There have been a number of reported incidents of people losing large sums of money on online games, leading to suicides in various parts of the country.
• Along with that, there is currently no regulatory framework to govern various aspects of online gaming companies such as having a grievance redressal mechanism, implementing player protection measures, protection of data and intellectual property rights, and prohibiting misleading advertisements.
• For online gaming businesses, the inconsistency has led to uncertainty. The thinking within the government is to have a nodal agency that will address all issues related to online gaming, including introducing a uniform law to determine what forms of online gaming are legally allowed.

 

How big is the online gaming market in India?

• The revenue of the Indian mobile gaming industry is expected to exceed $1.5 billion in 2022, and is estimated to reach $5 billion in 2025.
• The industry in the country grew at a CAGR of 38% between 2017-2020, as opposed to 8% in China and 10% in the US. It is expected to grow at a CAGR of 15% to reach Rs 153 billion in revenue by 2024.
• India’s percentage of new paying users (NPUs) in gaming has been the fastest growing in the world for two consecutive years, at 40% in 2020 and reaching 50% in 2021.
• According to a report by EY and FICCI, transaction-based games’ revenues grew 26% in India, with the number of paying gamers increasing by 17% from 80 million in 2020 to 95 million in 2021.

 

What are the recommendations of the task force?

• A central-level law for online gaming should apply to real money and free games of skill, including e-sports, online fantasy sports contests, and card games among others.
• Casual games with no real money element in the form of stakes may be kept outside the scope of such rules, unless they have a high number of users in India, or permit the publication or transmission of information in the nature of any inappropriate content like violence, nudity, addictive content or misleading content.
• It has also recommended creating a regulatory body for the online gaming industry, which will determine what qualifies as a game of skill or chance, and accordingly certify different gaming formats, seek compliance and enforcement.
• A three-tier dispute resolution mechanism, similar to that prescribed under the Information Technology Rules, 2021 for online streaming services, consisting of a grievance redressal system at the gaming platform level, self regulatory body of the industry, and an oversight committee led by the government should be put in place for online gaming.
• Any online gaming platform – domestic or foreign– offering real money online games to Indian users will need to be a legal entity incorporated under Indian law.
• These platforms will also be treated as ‘reporting entities’ under the Prevention of Money Laundering Act, 2002, and will be required to report suspicious transactions to the Financial Intelligence Unit-India.

 

Which ministry will be in charge of the regulation?

• The task force has suggested that MeitY may act as the nodal ministry to regulate online gaming, except for the e-sports category on which the Department of Sports can take the lead.
• The scope of the regulation by MeitY should only cover online gaming, that is, games of skill, and the issues of online betting and gambling being games of chance in nature should be excluded from its scope, the task force is learnt to have recommended.
• Certain other aspects of online gaming such as advertisements, code of ethics relating to content classifications etc. could be regulated by the Information and Broadcasting Ministry, while the Consumer Affairs Ministry can regulate the sector for unfair trade practices.

 

What did the task force say about offshore betting apps?

• On the aspect of prohibiting games of chance, gambling websites or apps being played online, the proposed Digital India Act can include it in the list of prohibited user harms that will not be permitted.
• “Many offshore betting and gambling websites which are illegal in India have become popular among Indian users. Despite being based outside India, some of these websites are widely advertised in Indian newspapers and TV channels, and allow users to transact in Indian rupees through popular digital payment modes such as internet banking, UPI and popular wallets.

The coalition of the world

(GS Paper 2, International Organisation)

Context:

• The League of Nations, set up in 1920, was the first intergovernmental organisation with the aim to promote international cooperation and outlived its utility with World War II.
• The United Nations claims to be the one place where all the world’s nations can discuss common problems and find shared solutions that benefit all of humanity.

Reforms:

• Now, 75 years later, rising conflict situations suggest it is time to go back to first principles of the Charter.
• India’s Presidency of the Group of 20, UN Security Council (UNSC) in 2022, and the Shanghai Cooperation Organisation (SCO) in 2023 when major powers are not even talking to each other and India alone, now the fifth largest economy, is interacting with each of them, presents a historic opportunity.

Challenges before UN:

Multilateralism:

• First, multilateralism is under challenge even by its proponent, with the United States opting for partnerships, with the most important areas being the worst affected.
• The G7 Summit, held in June, endorsed the goals of a cooperative international Climate Club to accelerate climate action outside the UN. The dispute settlement mechanism of the WTO without the quorum of its members has rendered the institution dysfunctional.
• Despite the G7 having accepted the need for transfer of funds at Rio in 1992, because of their role in creating the climate crisis, the promise made in 2009 to provide at least $100 billion per year in climate finance remains unfulfilled.

 

Rival multilateral institutions:

• Second, China has opted for rival set of multilateral institutions. China’s Belt and Road Initiative (BRI) seeks to achieve policy, infrastructure, trade, financial, and people-to-people connectivity by building a new platform for international cooperation to create “new drivers of shared development”, and covers half the world population with one-third the GDP and investment of $930 billion.

• China’s Global Development Initiative, 2021, and linked Global Security Initiative, 2022, is developing a conceptual frame responding to an urbanising world, i.e. digital governance and non-traditional security, which the international system has not covered.

 

Rising conflicts:

• Third, more significant than the clash of institutions reflecting the deepening divide between the Atlantic powers and the Russia-China combine is the diffusion of wealth, technology and power.
• The ‘rest’, despite threats, are now capable of not taking sides and are looking for leadership within the United Nations, for what the UNSG characterised as “coalition of the world”.

 

Future Roadmap:

• Strategists in major powers see the world in binary terms around rules. In a multipolar world, the question is the kind of rules needed for human wellbeing and whether principles would serve the purpose better.
• Second, the time is ripe for a ‘big idea’ that both keeps away from the current multilateral focus on global rules, amount of aid and inviolability of IPR’s as well as recognises a role for competing institutions as countries can now secure the best terms themselves without bargaining.
• Third, just as the ‘Rio principles’ continue to guide climate change, vasudhaivakutumbakam, or ‘world as one family’, focusing on comparable levels of wellbeing can be the core of a set of universal socio-economic principles for a dialogue between the states.
• Fourth, to the current global consensus around equitable sustainable development, Prime Minister Narendra Modi has added a clearer societal purpose to flesh out a universal civilisational principle.
• He emphasised ‘Lifestyle for Environment’ seeing climate change as a societal process and combating it devoid of trade-offs characteristic of the Climate Treaty. He has also offered India’s payments and linked digital ID technology without IPR restrictions. 
• Fifth, redefining ‘common concerns’ in terms of felt needs of the majority rather than interests and concerns of the powerful will shift the focus of a much slimmed down United Nations squarely to human wellbeing, and not as an add-on.

 

Way Forward:

• India’s Presidential statement could introduce ‘vasudhaivakutumbakam’ in the UNSC in December. The SCO Summit will precede the G20 Summit and acceptance of overarching principles will support acceptance by the wider G20.

New weapon systems branch in IAF

(GS Paper 3, Defence)

Why in news?

• Recently, the Chief of Air Staff Air Chief Marshal announced the setting up of a new branch in the officer cadre for the first time since Independence, though a major reorganisation of the branch system was last done in 1971. This new branch represents a much-needed reform.

Background:

• At the time of inception of Indian Air Force in 1932, every officer was offered just one choice, to be a pilot. Since then, the IAF has come a long way.
• Today, the IAF has nine branches that officer cadets can join – Pilots, Navigators, Technical Officers, and Ground Duties (Administration, Logistics, Accounts, Education, and Meteorology).
• The IAF’s branches have expanded alongside the force’s evolution and growth to continually adapt and meet the needs of the modern battlefield.

 

Royal Air Force:

• In 1932, the IAF had just one squadron. The General Duties Pilot branch, as it was called then, was based on the lines that existed in the Royal Air Force. All other functions required to support flying were taken care of by airmen (initially called HawaiSepoys).
• The headquarters, air bases, and other aspects of managing the Air Forces in India were controlled by the RAF. It meant limited need for IAF personnel and hence fewer branches. It wasn’t until 1941 that the IAF felt the need to expand.
• In the early years, the trainees who did not qualify to become pilots were commissioned into the second branch, Equipment, to take care of logistics.

 

WWII:

• In the second half of 1939, the winds of war were blowing across Europe. Britain required manpower to deal with the demands of WWII and looked to its Indian colony. IAFVR or the Indian Air Force Volunteer Reserve was set up, which led to manifold increase in recruitment.
• Nearly all the expanded IAF took part in WWII on the Burma front, some even in Europe. As part of IAFVR, apart from Pilots, officers were commissioned in the General Duties Observers and General Duties Air Gunner branches. Air observers or aerial observers were predominantly tasked with reconnaissance duties.
• The term was coined by the British Royal Flying Corps in World War 1, and was maintained by its successor, the Royal Air Force. An air observer’s brevet was a single wing with an O at the root.
• Just like any intake, there are some who do not make it to pilots. Therefore, a few of the IAFVR members were commissioned into Ground Duties, then called Administration & Special Duties (A&SD branch). Special duties included air traffic control (ATC), photography and cypher for instance.

 

Period of expansion:

• Between 1939 and 1942, the IAF saw a massive expansion – growing from just one to six squadrons. To accommodate this increased size, numerous training institutions for officers and airmen were set up. It was here that proliferation of other branches took place across the officer cadre in 1942-43.
• It was but natural that the first choice of officers for these roles were the airmen, who were already playing some of these roles. This eliminated training time and retained training manpower. The IAF did not see the need and therefore did not have any establishments to induct or train for ground duties.
• The branches that got set up in this period were Education, Accounts, a specific branch called Balloon, and four branches in the technical field – Signals, Armament, Electrical, and Engineering.
• Unknown to most in the IAF, there was a fifth technical branch called Radar, referred to as T/Rad. But it seems to have merged into Sigs around 1947 and therefore was forgotten.
• The independent Balloon branch was first formed to look after the balloon barrages erected round vulnerable points to trap low-flying enemy aircraft, a concept that was used extensively during the World War 2 in Europe, but its utility waned soon after and the branch was discontinued in 1945.

 

Meeting new requirements:

• Such expansion of force and services created challenges in recruitment of trained manpower and the IAF had to rely on services of other government agencies as well.
• For instance, the IAF did not have any Meteorology expertise or manpower. Prior to the 1940s, Meteorology was handled by the RAF/IMD. In 1943, the IAF started to have commissioned officers in the Meteorology branch. All these officers were deputed from the IMD. In fact, direct recruitment into Meteorology did not happen until much after 1947.
• Similarly, air traffic and aerodrome management skills were in short supply. The IAF deputed “aerodrome officers” from civil aviation for a while in the 1940s to meet the needs. They were part of the A&SD branch.
• As a result of these arrangements, the officer cadre in the IAF outside of pilots tended to be short service commission and also significantly older. For instance, many officers of the ground duties branches were commissioned as pilot officers well into their 40s.
• The IAF also had a distinct Legal branch with officers commissioned for the role. This branch was merged into A&SD around 1949. In 1946, the system of Observers was stopped and Navigators as a stream was introduced. So, GD(O) became GD(N) and erstwhile GD(O) officers underwent a conversion course.

 

Changes introduced in 1971:

• At its peak, just before the 1971 War, there were as many as 14 branches in the IAF. This system continued till 1 September, when under Air Chief Marshal Pratap Chandra Lal, a reorganisation took place.
• General Duties was replaced with the word Flying. So GD(P) became F(P) and GD(N) became F(N). A&SD was renamed as ADM (Administration) and predominantly had three duties – Administration, Air Traffic Control, and Fighter Controller.
• Equipment was renamed as Logistics. Technical branches were consolidated into two branches. Armament + Engineering became Aeronautical Engineering (Mechanical) and Signals + Electrical became Aeronautical Engineering (Electrical). Meteorological, Education, and Accounts continued as is.
• The IAF did not have its own medical and dental officers who were, 1941 onwards, deputed from Army Medical Corps. However, on such deputation, the officer was given a commission in the IAF under the “medical” or “dental” branch. The first Medical officers were commissioned in January 1941. Dental came in much later in 1956.

Changes introduced in 2022:

• No significant changes to the branch structure have occurred since 1971, until today.
• The new Weapon Systems branch will combine four streams – Surface-to-Surface Missiles, Surface-to-Air Missiles, Remotely Piloted Aircraft (drones), and Weapon System Operators.
• In effect, this is an important step in making the IAF future ready as it recognises the need to recruit, groom and grow talent in the organisation focussed on these streams.