Collective effort will make India atmanirbhar

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Collective effort will make India atmanirbhar

Thursday, 13 August 2020 | Priya Gupta

Self-reliance is not a short race, it is a marathon and can be completed only when all engines start firing together in the desired direction

If the Centre’s biggest agenda is the revival of the economy, then it can only be achieved by implementing the  Atmanirbhar Bharat Abhiyaan. We may get some idea if we analyse the progress of our neighbouring nation, China. In 1987, its Gross Domestic Product (GDP) was almost equal to India’s GDP at $279 billion. Then, in December 1978, Deng Xiaoping announced the “Open Door Policy” and it was a major turning point for the Chinese economy. Beijing experienced 15 per cent growth year on year at a time the global economy was not even growing, dipping to a rate of three per cent.

This brought China from the 32nd position in global exports to first position in 2013. The Chinese Government checked all the right boxes, whether it was a lower tax regime, industry-friendly  wage rules, cheap capital, free land or even allowing  the misuse of  patent and knowledge laws.

When multinational corporations (MNCs) realised that manufacturing costs in the US and Europe were skyrocketing due to the high cost of manpower, land and their stringent pollution norms, they began looking for alternative locations and evaluated a few South Asian countries like Malaysia, Vietnam, Thailand, China, Indonesia and many more.

They ignored India due to the Licence Raj, stiff labour laws, unclear policy on land acquisition, poor power supply, lack of skilled manpower, a closed foreign trade policy and many more such hurdles. We were one of the lowest-ranked nations on the Ease of Doing Business index.

Upon the evaluation of all South Asian countries, it was found that China was best suited for moving manufacturing business from the US and Europe, as it had a huge population which could be skilled and brought into the workforce. It had huge tracts of land, too, for setting up manufacturing bases.

Now, given the global anger against Beijing due to the spread of the Coronavirus contagion, nations are looking to shift their manufacturing businesses and supply chains out of China. This is another opportunity for India to attract global business. But we need to check all the right boxes like Beijing did.

It might take time, maybe five-six years minimum to savour the fruits of an atmanirbhar (self-reliant) Bharat instead of the very next quarter like many people are hoping. If we want to act on self-reliance, we need to focus on all segments of manufacturing, starting from big manufacturing companies to the Micro, Small and Medium Enterprises (MSME), which  can feed the former.

However, unless we invest in Research and Development (R&D), unless we create products that are better and more economical than  products made around the world and in China, we can’t sell them in internal or global markets. If we want to make Atmanirbhar Bharat more than a slogan, then we need to provide capital-rich global players an equal footing for their investment and have an open and consistent trade policy; an easy land acquisition policy; cheap and skilled labour and a consistent power supply.

According to the Government,  the five pillars of the Atmanirbhar Bharat Abhiyaan  focus on the economy, infrastructure, the system, a vibrant demography and the creation of internal demand. An economy is the sum total of many small components of business, starting from the consumer, markets, traders, banks, utility companies, manufacturers, Government policies and institutions. Hence, any leakage of resources will not bring about effective use of the same.

Infrastructure always remains a talking point in our country but no one has ever worked seriously towards developing it. As a result of this, many infrastructure projects have been delayed by as much as 20-25 years. It is difficult to believe that projects conceptualised at a cost of Rs 20 crore in 1968 cost Rs 200 crore in 2010 and are still pending. If we are really interested in an Atmanirbhar Bharat, then fiscal self-discipline is mandatory and it must start from Government departments. Plus, we need to fix responsibility for time and cost overruns in order to get work done on time. India still lacks good infrastructure and Atmanirbhar Bharat will not be possible if we don’t connect all the dots.

Consistent Government policies on trade and taxation are key to creating any manufacturing base as it takes time to reap the benefits of the same. The Government must announce policies for 15-20 years which can’t be changed by any new Government of the future. Projects of national importance must not be scrapped or altered by a new set of Ministers.

Another key component that must be aligned is demography. Though India is a democratic country and everyone has the right to follow their own free will,  if we want to make India atmanirbhar, then we need to have a “India First” policy. 

Self-reliance is not a short race, rather it is a marathon and can be completed only when all engines start firing in the desired direction and in synchronisation with each other. Start-ups can act as a catalyst and be stakeholders in manufacturing, service delivery and a support element in creating a consensus among the masses for this mega project.

The Government will act as the agent to expedite and bind the entire process by easing policies around it. Involve all stakeholders and give adequate compensation to them. If this is implemented, then it can be the biggest employment generator, forex earner and a huge support to the Indian economy.

To achieve a $5 trillion economy from a $2.8 trillion one in about five years, we need to achieve a growth rate of more than 15 per cent per annum. It can be done only by firing all engines of growth, including MSME and big industries.

(The writer is Associate Professor, JNU)

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