INTRODUCTION
The Indian paper industry has been historically divided on a three dimensional matrix identified by size, grades manufactured and raw material utilized. Generally, tariff rates have protected smaller units utilizing "unconventional" raw material. Over the years, the growth of various segments, investments levels in specific segments, technological changes, industry fragmentation and intensity of competition have been significantly influenced by the Government tariff policy. The present Excise duty on Paper is 12 %. The Government of India from time to time has given some benefits to small iby a mill is chargeable only @ 8 % and thereafter it is @ 12 %.The three main grades of paper manufactured in India are :-1. Newsprint2. Writing and printing.3. Industrial Variety ( Craft paper and Duplex Board )Over 550 players currently populate the industry and the estimated capacity is about ndustries in order to protect them i.e. the first 3500 tones produced7.00 million Metric Tones Per Annum (MTPA). Fragmentation is severe in the "industrial" (packaging) grades, which rely on "unconventional" raw material such as waste paper and partly agro residues. This division generally comprises of units with an average size of about 10000 MTPA and contributes to 45% of the output of paper and paper boards in the country. Although the other divisions in the Indian paper industry are also fragmented by international standards, the degree of fragmentation is less severe. "Newsprint" till about 1995, was the sole preserve of large public sector units and was well protected by high import tariff barriers. Nevertheless, imports contributed to about 50% of the domestic consumption. Since then, new domestic capacity with private investment has been allowed to be created. Thisgrowth has relied namely on De-inked waste paper as a source of raw material. Currently import duty on newsprint is about 5% and domestic manufacture of newsprint is exempted from excise duty. This tariff structure for newsprint has seen Indian newsprint price closely mapping international prices. Imports still constitute about 30% of consumption and newsprint contributes about 10% of the total production of paper and paperboards. The number of players in the newsprint segment is relatively limited and manufacturing capacities are larger than in the packaging grades segment. Historically, the bulk of the output of "Cultural" grades - comprising of writing, printing, office stationery paper and specialty paper has been the preserve of "large" producers, who use forest based raw material in integrated pulping facilities augmented by imported pulp. This segment has been consistently taxed at higher rates due to its size and use of "conventional" forest based raw material. Investment in plant has also been higher. With relatively smaller number of playeto be higher quality, have been high.Import tariff levels, although much lower now, still continues a significant barrier to imports. The high investment levels required and limited "conventional" fiber resources are the major deterrents to growth in this segment for both existing players as well as new entrants. "Lower end cultural grades" manufactured by smaller players using unconventional raw materials in low investment, low tech plants cater to consumers in the price sensitive sub segment of this market. This sub segment depends significantly on the tariff differential based on size and raw material for its viability.The Indian Paper industry is going through substantial changes. Global demand for paper is expected to grow by about 4% p.a. over the next 5 years. The domestic demand is expected to grow at about 8% which will result in increase of demand by 30 Lakh tones approximately over the next 5 years. It is expected that customs duty on import of paper will decrease from the current level to the level of 10% over a period of time due to WTO compulsions. rs and high imThe import of raw material for paper including pulp, waste paper and news print is likely to increase by at least 15% to 20% in 2005-06 to keep up with growing demand port tariff protection, prices of end products, for paper in the domestic market. Despite to the constraints like over crowded market and limitation in procuring the desired quality of waste paper, there are indicators of a revival in the Indian Paper Industry. In the current year, selling price has marginally increased and enabled the industry to partially offset the rise in cost of inputs, fuel & labour .The paper industry has an important social role to play for the country. Use of paper is considered as an index of cultural growth. Key social objectives of the Government like eradicating illiteracy, making primary education compulsory etc. are very much related to the paper industry. The paper industry is also contributing towards fulfillment of various requirements of the industry as a whole like information dissemination, publicity etc. which in turn stimulate industrial growth of the country. The paper industry has, thus, a catalytic role to play not on the industry but also for the living standards of the people. The new millennium is going to be the millennium of the knowledge. So demand for paper would go on increasing in times to come. Because of paper industry's strategic role for the society and also for overall industrial growth, it is necessary that the paper industry performs well.The pulp and paper sector presents one of the energy intensive and highly polluting sectors within the Indian economy and is therefore of particular interest in the context of both local and global environmental discussions. Increases in productivity through the adoption of more efficient and cleaner technologies in the manufacturing sector will be most effective in merging economic, environmental, and social development objectives. A historical examination of productivity growth in India's industries embedded into a broader analysis of structural composition and policy changes will help identify potential future development strategies that lead towards a more sustainable development path. Issues of productivity growth and patterns of substitution in the pulp and paper sector as well as in other energy intensive industries in India have been discussed from various perspectives. Historical estimates vary from indicating an improvement to a decline in the sector's productivity. The variation depends mainly on the time period considered, the source of data, the type of indices and econometric specifications used for reporting productivity growth. Regarding patterns of substitution most analyses focus on inter fuel substitution possibilities in the context of rising energy demand. Not much research has been conducted on patterns of substitution among the primary and secondary input factors: capital, labor, energy and materials. However, analyzing the use and substitution possibilities of these factors as well as identifying the main drivers of productivity growth among these and other factors is of special importance for understanding technological and overall development of an industry. In this paper we contribute to the discussion on productivity growth and the role of technological change. We introduce the pulp and paper industry in more detail taking into
Account industry specific aspects such as structural composition, production, technologies,
Energy consumption within processes, sector specific policies etc. This following we derive both statistical and econometric estimates of productivity growth for the fertilizer sector over time. For the statistical analysis we develop the Kendrick and Solow indices while for the econometric analysis a translog cost function approach using both cross-state and national time series data is employed. The results are then interpreted within a broader context of structural and policy changes in the sector as well as other sector specific aspects. Future energy use depends on the level of production and the technologies employed. Furthermore, different economic and policy settings affect structures and efficiencies within the sector. The final section therefore examines the ongoing changes in the pulp and paper industry structure. It compares world best technologies to Indian technologies and identify potentials and barriers to the adoption of such efficiency improvements. We conclude the report in highlighting the energy efficiency and productivity improvements that could be achieved by employing more efficient technologies.
Paper industry in India is the 15th largest paper industry in the world. It provides employment to nearly 1.5 million people and contributes Rs 25 billion to the government's kitty. The government regards the paper industry as one of the 35 high priority industries of the country.
Paper industry is primarily dependent upon forest-based raw materials. The first paper mill in India was set up at Sreerampur, West Bengal, in the year 1812. It was based on grasses and jute as raw material. Large scale mechanized technology of papermaking was introduced in India in early 1905. Since then the raw material for the paper industry underwent a number of changes and over a period of time, besides wood and bamboo, other non-conventional raw materials have been developed for use in the papermaking. The Indian pulp and paper industry at present is very well developed and established. Now, the paper industry is categorized as forest-based, agro-based and others (waste paper, secondary fibre, bast fibers and market pulp).
In 1951, there were 17 paper mills, and today there are about 515 units engaged in the manufacture of paper and paperboards and newsprint in India. The pulp & paper industries in India have been categorized into large-scale and small-scale. Those paper industries, which have capacity above 24,000 tonnes per annum are designated as large-scale paper industries. India is self-sufficient in manufacture of most varieties of paper and paperboards. Import is confined only to certain specialty papers. To meet part of its raw material needs the industry has to rely on imported wood pulp and waste paper.
Indian paper industry has been de-licensed under the Industries (Development & Regulation) Act, 1951 with effect from 17th July, 1997. The interested entrepreneurs are now required to file an Industrial Entrepreneurs' Memorandum (IEM) with the Secretariat for Industrial Assistance (SIA) for setting up a new paper unit or substantial expansion of the existing unit in permissible locations. Foreign Direct Investment (FDI) up to 100% is allowed on automatic route on all activities except those requiring industrial licenses where prior governmental approval is required.
Growth of paper industry in India has been constrained due to high cost of production caused by inadequate availability and high cost of raw materials, power cost and concentration of mills in one particular area. Government has taken several policy measures to remove the bottlenecks of availability of raw materials and infrastructure development. For example, to overcome short supply of raw materials, duty on pulp and waste paper and wood logs/chips has been reduced.
Following measures need to be taken to make Indian paper industry more competitive:
Outlook
Outlook for paper industry in India looks extremely positive as the demand for upstream market of paper products, like, tissue paper, tea bags, filter paper, light weight online coated paper, medical grade coated paper, etc., is growing up Indian Paper industry is the 15th largest industry in the world. It provides employment to nearly 1.5 million people and contributes Rs. 25 billion to the government policy's kitty. The government regards the paper industry as one of the 35 high priority industries of the country.
Paper industry is primarily dependent on forest-based raw materials. The first paper
mill in India was set up at Sreerampur, West Bengal, in the year 1812. It was based on
grasses and jute as raw material. Large Scale mechanized technology of papermaking was
introduced in India in early 1905. Since then the raw material for the paper industry
underwent a number of changes and over a period of time, besides wood and bamboo, other
non-conventional raw materials have been developed for use in the papermaking. The
Indian Pulp and Paper industry at present is very well developed and established. Now, the
paper industry is categorized as forest-based, agro-based and other (waste paper, secondary
fibre, baste fibres and market pulp).
Growth of paper industry in India has been constrained due to the high cost of
production caused by inadequate and high cost of raw materials, power cost and
concentration of mills in a particular area. Government has taken several policy measures to
remove the bottlenecks of availability of raw materials and infrastructure development.
Goldar and Kumari (2003) analysed the impact of liberalisation on the
productivity growth of Indian manufacturing industries and found productivity accelerated
in paper, paper products, printing and publishing industry in the 1990s. Pattnayak and
Thangavelu (2005) studied the economic reform and productivity growth in Indian
manufacturing, including paper and paper products industry and found a little increase in
the growth of TFP of paper and paper product industry during post-reform period. Sindhu
and Balasubramanyam (2006) computed Malmquist index of productivity growth of
Indian paper and paper products industry during pre-reform period. The rate of growth was
3.1 per cent and this was due to the improvement in technical change.
Several studies have attempted to estimate the relationship between economic
reforms and productivity growth in the Indian manufacturing sector. Some studies have
reported that policies of liberalization improved the productivity of the manufacturing
industry (See Majumdar 1996; Fujita 1994; Sharma 1999; Unel 2003; TSL 2003; Banga and
Goldar 2007), whereas some have detected negative effects, or at least no significant
improvement, in productivity growth since the onset of economic reforms in 1991 (See
Trivedi et al., 2000; Balakrishnan et al., 2000; Unni and Rani 2001; Goldar 2004; Das
2004). Thus, the topic of the effects of economic reforms on productivity growth remains a
critical focus of research.
While there have been numerous studies conducted on productivity growth, only a
relatively few studies have concerned themselves with the sources of productivity growth in
the Indian economy. The traditional Tornqvist index, which is applied to calculate total
factor productivity growth, is incapable of decomposing the productivity change into
movements along and changes in frontier, because the Tornqvist index assumes that the
observed output is the consequence of the best practice frontier. Conversely, the Malmquist
index decomposes the total productivity growth into 'efficiency change' and 'technical
progress'. TFP can be increased by using its existing technology and factor inputs more
efficiently-this is referred to as 'efficiency change'. The TFP of an industry can also
increase when the industry adopts innovations or technological improvements, and this
process is referred to as 'technological change'. Therefore, changes in TFP from one
period to the next are the products of both efficiency change and technological progress.
Most previous studies conducted in India have failed to consider the sources of
such changes in productivity growth1. This paper has attempted to assess the effects of
economic reforms on productivity growth in Indian paper and paper products industry. We
utilize the Malmquist index, which can demonstrate that the reform has positive effects on
efficiency change or technical progress, as well as total factor productivity.
The paper is organized as follows. A brief summary of relevant Indian economic
reforms is presented in Section II, and the methodology utilized to estimate the Malmquist
productivity index is provided in Section III. Section IV shows the data sources and gives a
PESTLE ANALYSIS
POLITICAL FACTORS
In late 1970s, they started implementing some reforms such as "reducing the
barriers to entry and expansion, simplifying procedures, and providing easier access to
better technology and intermediate material imports" (Ahluwalia, 1991). There were some
additional reforms during 1980s, but the most radical reforms were initiated since 1991,
after the severe economic crisis in the fiscal year 1990/91. the major policy changes
initiated in the industrial sector since July 1991 include removal of entry barriers, reduction
of areas reserved exclusively for public sector, rationalization of approach towards
monopolistic and restrictive practice, liberalization of foreign investment policy, farreaching
liberalization of import policy with respect to intermediate and capital goods,
measures to bring about regional balance, especially the development of backward areas
and encouraging the growth of employment intensive in small and tiny sector
(Madheswaran et al., 2007).
Trade policy of a country consist a set of policy measures that have impact upon its
international trade and economic relations with the other country. Free trade policy permits
international flow of goods and services without any artificial impediments.
If trade is left free, there will be no tariff or no-tariff restrictions and every country is likely
to specialise in the production and export of the product. The benefits of specialization
make the optimum use of factor resources. Haberler points out that free trade can contribute
in the process of growth in different ways; (i) it enables the unrestricted import of raw
materials and capital goods which are essential for industrial expansion, (ii) free trade
assists in an easy transfer of advanced technical know-how and entrepreneurship from the
advanced to the less-advanced countries, (iii) free trade facilitates large scale international
capital movements to speed up the process of growth and (iv) free trade promotes
competition, efficiency and productivity can create such capacities in the poor countries,
which enable them to achieve higher levels of production, employment and income.
Protectionism is a trade policy which advocates protection of home industries from
foreign competition. A free exchange of goods may be positively harmful to economically
backward countries, a country may enjoy very great national advantage but may not be
able to exploit them due to lack of skill, and insufficient infrastructure. The policy of
protection has been well expressed in the following words "Nurse the baby, Protect the
child and Free the adult."
Indian economy was under the protected trade policy regime till July 24, 1991 and
the policy measures were liberalised and entered in free trade regime after 1991. These two
policies led to different impact on Indian manufacturing in general and Indian paper and
paper products in particular.
The major sectors generating e-waste include individuals, small businesses, large businesses, institutions, governments and original equipment manufacturers (OEMs). Due to the new technologies, the rate of obsolescence is very high.
Often hazards arise due to the improper recycling and disposal processes used. As new technologies enter the market, e-waste is a mounting concern. The estimate is that 20 million devices become obsolete with many kilos of toxins in each year.
Environmental implications
Over the years, e-waste leads to chemical and metal leaching finally resulting in groundwater contamination. Mercury, for example, will leach when certain electronic devices such as circuit breakers are destroyed. Lead has been found to leach from broken lead-containing glass, such as the cone glass of cathode ray tubes from TV's and monitors.
When brominated flame retarded plastics or plastics containing cadmium are landfilled, both PBDE and cadmium may leach in to soil and ground water. Landfills are also prone to uncontrolled fires, which release toxic fumes.
Disposal practices
Disposal of e-wastes is a particular problem faced in many regions across the globe. Landfilling e-waste is the most widely used method of disposal. Incineration is also being practiced for some parts of the computer, especially cables. About 3-5 per cent of the computers that have been discarded by their users are re-used. Re-use involves direct second-hand use or use after slight modifications of the original functioning equipment like memory upgrades, etc.
Though recycling is gaining popularity, rates of recycling are still very low.
Indian scenario
In India, most of the recyclers currently engaged in recycling activities do not have this expensive technology to handle the waste. Computer scrap is managed through various management alternatives such as product reuse, conventional disposal in landfills, incineration and recycling. However, the disposal and recycling of computer waste in the country has become a serious problem since the methods of disposal are very rudimentary and pose grave environmental and health hazards.
India now also has to manage the waste being dumped by other countries. Over the years, Toxics Links has regularly been claiming that large quantities of e-wastes are being dumped on to Indian shores in the name of recycling.
Remedial action
The U.S. House of Representatives approved a bill on 12th July, 2006, which requires the US Environmental Protection Agency (EPA) to study the use of energy-efficient servers that can reduce the power demand of data centers packed with equipment.
In India, the National Energy Labeling program was officially launched on 18th May, 2006, for the first time by the Bureau of Energy Efficiency (BEE). It has been made mandatory for many electronic products to get certified by BEE. The certification of PC's, Laptop's and servers are yet to be made mandatory under this program.
Improvements in datacenter energy efficiency can yield great savings. They reduce direct energy consumed by IT equipment and also reduce indirect costs by reducing the need for increased floor space and more cooling equipment to dissipate server-generated heat. Energy efficient servers are currently available and perform as well as, or better than, less efficient counterparts.
IEEE has come out with a Standard 1680 with the support of EPA in which it mentions that all desktops have to have a "Energy Star" label to as a certification of energy efficiency.
An example of a successful international voluntary initiative is that all applicable products of Sun Microsystems comply with requirements of "Energy Star".
For government policy
Government should play a vital role by revisiting the proportion of time and funds spent by governments on increasing the supply of energy at the expense of efforts to decrease the demand. It should also establish tax incentives and government procurement guidelines that motivate purchase of energy efficient servers and other data centre components.
The government should also foster voluntary industry efforts to develop energy efficient computing products and engage in public private partnership.
Recommendations
The Ministry of Communications and Information Technology has emphasized the need for recycling and re-use of end-of-life electronic equipment. Appropriate legislation and its enforcement are absolutely essential to tackle this problem.
There are different options available for computers besides just throwing them away (or storing them). Many computers are built in a way that allows them to be repaired or upgraded, which means they can be reused.
The other viable option is recycling. The government rules should make it mandatory for the OEMs to buy back their products at the end of the life. Thus the OEMs have to be equipped with recycle and disposal facilities of the rejected IT hardware.
Some leading computer manufacturing companies strictly comply to the environmental friendly requirements.
For example, Sun Microsystems avoids the use of hazardous substances where possible. The company has a unique product "take back" and reuse programme, which recycles, reclaims and reuses both components and entire systems to the benefit of its customers and the environment. In fact less than 1 per cent enters the waste stream.
Conclusion
The continued and expanded use of electronic information and communication technologies is likely to be a key to achieve global sustainability. However, with the current industrial technology and infrastructure, the electronic products have unacceptably high social and environmental impacts. Therefore, while acquiring electronic products one must consider that the items are made up of fewer toxic components and are recyclable, energy efficient, designed for easy upgradation or disassembly, environmentally preferable and have take back options. Finally, it is the responsibility of every individual to work for a cleaner environment.
