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Aatma-Nirbhar Bharat - the importance of self-reliance in the face of global challenges

The primary objective of Atmanirbhar Bharat Abhiyan is to reduce dependency on imported goods and promote domestic production

Aatmanirbhar Bharat Package - Boon or Bane for The Indian Economy?

However, there was some confusion regarding the interpretation of the phrase when the Press Information Bureau referred to both "self-reliance" and "self-sufficiency" in its communication.

Following the Prime Minister's speech, the Indian government announced an economic package named the Atmanirbhar Bharat Abhiyan (Self-reliant India Mission). The response to this initiative was mixed, with varying opinions among economists and commentators.

Economist Swaminathan Aiyar noted that "atmanirbhar" could be translated as

self-reliance and self-sufficiency. He cautioned against repeating India's unsuccessful drive for self-sufficiency in the 1960s and 1970s, suggesting that a similar approach may not be advisable. On the other hand, Sadanand Dhume expressed skepticism about the terminology and language associated with the phrase, questioning whether it implied a revival of pre-liberalization era policies.

It is worth mentioning that "Aatmanirbharta," or "Self-Reliance," was chosen as the Oxford Hindi Word of the Year in 2020, highlighting its significance and impact on the national discourse.

Adapting the concept of self-reliance in the Aatmanirbhar Bharat Package reflects the government's intention to bolster the domestic economy and reduce dependency on imports. However, the diverse perspectives and historical context surrounding self-sufficiency raise valid concerns and debates about the best path forward for India's economic growth and development.

It is essential to balance supporting home industries and keeping open and advantageous economic links with foreign countries as the government advances its self-reliance agenda. It's essential to develop a workable plan that encourages innovation, investment, and global integration while addressing the particular needs and challenges of the Indian economy.

The Aatmanirbhar Bharat Package represents a significant policy initiative to foster economic resilience and self-sufficiency. Its long-term impact will depend on effective implementation, adaptability to changing dynamics, and a commitment to sustainable growth. By carefully navigating the challenges and seizing the opportunities, India can strive towards a more robust and self-reliant future.

The "Self-reliant India" (Atmanirbhar Bharat Abhiyan) mission's primary objectives are as follows:

Make India the hub of the world's supply chain.
Boost the government's belief in the capabilities and potential of the private sector.
For Indian producers, create "good force multipliers."
Enter international markets to export products, including jewelry, apparel, textiles, and agriculture.

Key Features of Atmanirbhar Bharat Mission

The Atmanirbhar Bharat Abhiyan gained attention through a report released by the United Kingdom India Business Council in 2021.
The report highlighted that approximately 77% of United Kingdom companies viewed the Atmanirbhar Bharat Abhiyan as an opportunity for their business ideas rather than perceiving it as a challenge.
The UK India Business Council raised concerns about certain Atmanirbhar Bharat program reforms that could adversely affect the United Kingdom and other multinational companies.
The report titled 'Road To A UK-India Free Trade Agreement: Enhancing the Partnership and Achieving Self-Reliance' emphasized the importance of strengthening the partnership between the United Kingdom and India.

Objectives

The primary objective of Atmanirbhar Bharat Abhiyan is to reduce dependency on imported goods and promote domestic production.
The program aims to enhance compliance and ensure the production of high-quality goods, thereby facilitating a stronger presence in the global market.
Atmanirbhar Bharat emphasizes the concept of "vocal for locals," promoting locally produced products for the benefit of the entire country.
The program has already introduced a 20 lakh crore package and plans to release additional funds to support laborers, MSMEs (Micro, Small, and Medium Enterprises), cottage industries, and middle-class industries.
The vision of Atmanirbhar Bharat is to decrease imports, increase domestic production, and boost exports, to contribute to global economic growth.

Atmanirbhar Bharat Abhiyan's Five Pillars

Economy: The focus is on building a robust and self-sufficient economy capable of making significant leaps forward rather than incremental growth.
Infrastructure: The goal is to develop modern and noteworthy infrastructure within the country, symbolizing a progressive India.
System: A technology-driven system is envisioned to meet the requirements and aspirations of the 21st century. This involves completely upgrading the existing systems to adapt to the present needs.
Demography: India's ambitious and dynamic millennial population is seen as a driving force to elevate the nation to developed status. Their active participation is crucial in the journey towards a self-reliant India.
Demand: Creating a sustainable demand cycle is important; a well-functioning supply chain is essential. Atmanirbhar Bharat aims to establish an efficient demand and supply ecosystem that maximizes the utilization of the country's resources.

As Prime Minister Narendra Modi outlined, these five pillars form the foundation of the Atmanirbhar Bharat Abhiyan, guiding the nation towards self-reliance and sustainable growth.

Atmanirbhar Bharat Abhiyan Programmes

The Atmanirbhar Bharat Abhiyan's main goal is to make India's economy self-sufficient and assist the government in reaching the ambitious goal of making India a US$5 trillion economy. The key components of the Atmanirbhar Bharat stimulus package, which the Indian government unveiled in May 2020, are as follows:

A 50 lakh rupee insurance policy for each health professional.
Distribution of 5 kg of wheat or rice per person for 3 months to 80 crore poor people from May 2020.
Provision of 1 kg of pulses per household for 3 months from May 2020.
INR 500 per month for 3 months provided to 20 crore women Jan Dhan account holders from May 2020.
Free gas cylinders were given to 8 crore low-income families for 3 months.
Increase MNREGA wage to INR 202 daily from INR 182, benefiting 13.62 crore families.
Front-loaded payment of INR 2,000 to 8.7 crore farmers under PM-KISAN.
60% increase in Ways and Means advance limits of States and extension of Overdraft duration limits by RBI.
Extension of the last Income Tax and GST return date to June 30, 2020.
Three-month moratorium on payment of installments and interest on Working Capital Facilities of all Term Loans.
Automatic loans without collateral up to INR 3 lakh crores are available to businesses, especially MSMEs.
INR 50,000 crore equity infusion through the MSME Fund of Funds.
Approval of 25 lahks new Kisan Credit Cards with a loan limit of Rs. 25,000 crores.
Sanctioning 63 lakh loans worth Rs. 86,600 crores in the agriculture sector between March 1 and April 30, 2020.
NABARD would provide additional emergency working cash to farmers of Rs. 30,000 crore.

Atmanirbhar Bharat Abhiyan's benefits

The Atmanirbhar Bharat Abhiyan 2021 is expected to bring numerous benefits to various industries and sectors in India. Here are the key beneficiaries and advantages:

Primary Sector:

Agriculture, mining, and fishing industries stand to gain from initiatives and support provided under the mission.

Secondary Sector:

The focus on self-reliance can be advantageous for businesses including manufacturing, MSMEs (Micro, Small, and Medium Enterprises), construction, utilities, and cottage industries.

Tertiary Sector:

Services sectors, including retail, tourism, banking, real estate, media & entertainment, telecommunication, hospitality & leisure, and information technology, are expected to see positive outcomes.

Quaternary Sector:

Education, research & development, and public sector industries are included in the mission's focus areas.

Key Factors: The mission emphasizes four key factors - Land, Labour, Liquidity, and Laws. Several initiatives were introduced between 2014 and 2020 to support these factors and promote self-reliance.

Land & Labour:

Schemes like Jan Dhan Accounts, Microinsurance schemes, PM Ujjwala Yojana, Ayushman Bharat Yojana, PM Awas Yojana, PM Kisan Yojana, PM Krishi Sinchai Yojana, DBT-based reformsPM Fasal Bima Yojana and the establishment of a new Fisheries department empower vulnerable sections of society, farmers, and land cultivation.

Liquidity:

Initiatives such as recapitalization of public sector banks, PSB merging,, FDI reforms, GST reforms and ease of doing business reforms aim to strengthen the business environment and enhance liquidity.

Laws:

Policy reforms, including airport privatisation, power sector reforms, cleaning the mining sector, and promoting champion sectors like solar PV and advanced battery manufacturing cells, are expected to boost investments.

Key Beneficiaries:

Shramiks (labourers/workers), Kisans (farmers), daily wage earners, the middle class (income tax-paying individuals), and the upper class (contributing to the economy's strength) are among the primary beneficiaries of the mission.

By promoting self-reliance and implementing supportive policies and schemes, the Atmanirbhar Bharat Abhiyan aims to create a more resilient and self-sufficient India, benefiting various sectors and contributing to the country's economic growth.

Atmanirbhar Bharat Abhiyan-Related Concerns

The Atmanirbhar Bharat scheme has faced several criticisms and concerns regarding its structure and statistical aspects. The following are the key concerns and criticisms associated with the Atmanirbhar Bharat Abhiyan:

Cumulative Addition of RBI and Government Initiatives: Some critics argued that the Reserve Bank of India (RBI) efforts were included as part of the package, but the initiatives taken by the RBI and the government cannot be added cumulatively. There is a need for clarity and transparency regarding the specific contributions from each entity.
Insufficient Spending: Renowned economists have raised concerns that more spending is necessary to prevent economic contraction. However, increased spending may lead to a surge in fiscal deficit and higher inflation rates. Balancing the need for economic stimulus with fiscal prudence becomes a significant challenge.
Demand Generation: Generating sufficient demand is crucial for economic recovery, but there are concerns that demand may not surge easily. Factors such as income disparities, job losses, and overall economic uncertainty can hinder the effective stimulation of demand.
Restructured Model of Make in India: The Atmanirbhar Bharat Abhiyan has been criticized for being a restructured version of the Make in India initiative. Critics argue that the rebranding lacks substantive changes and may not address the underlying issues that hindered the success of Make in India.

Addressing these concerns and criticisms requires careful policy planning, effective implementation, and continuous evaluation of the Atmanirbhar Bharat Abhiyan. Striking a balance between economic stimulus, fiscal discipline, and inclusive growth becomes imperative to ensure the long-term success and sustainability of the self-reliant India vision.

Criticism of Atmanirbhar Bharat Abhiyan

The Atmanirbhar Bharat Abhiyan has come under fire from several angles. The main criticisms are as follows:

Inflated Figures: Opposition leaders have argued that the actual government expenditure in the Atmanirbhar package is much lower than claimed. Economists' calculations suggest that the government expenditure in the package is only around 1%, raising concerns about the figures' accuracy.
Need for More Spending: Economists and experts have emphasized that the government needs to increase spending to prevent economic contraction. The Indian economy is projected to contract, and Gross Value Added (GVA) across sectors is expected to fall. Higher public spending may result in higher fiscal deficits and inflation, but a growth contraction could have severe economic consequences.
Credit Easing Challenges: Critics argue that credit easing measures by the Reserve Bank of India (RBI) may not have an immediate impact. While direct government expenditure can reach people, credit easing through the RBI might face hesitancy from banks to lend available funds, hindering the desired impact.
Lack of Demand Stimulation: Many economists have pointed out that the government stimulus primarily addresses supply-side issues but fails to generate sufficient demand. They argue that putting money directly into the hands of people is essential to stimulate demand and drive economic recovery.
Modest MSME Package: Opposition leaders criticize the MSME package for being modest and favoring larger businesses over smaller ones. Additionally, they argue that the unorganized sector has not received adequate support.
Insufficient Support for State Governments: State governments, at the forefront of fighting the pandemic, have not received adequate support through fund transfers, according to critics. This lack of support hampers their ability to effectively tackle the crisis.
Remodeled Make in India Campaign: Some have seen The Atmanirbhar Bharat Abhiyan as a remodeled version of the Make in India campaign, which did not achieve the desired results. Critics argue that the new campaign lacks substantive changes and merely adds to previous initiatives.
Viability of Self-Reliance Philosophy: The philosophy of self-reliance is questioned by skeptics who argue that India has been following the principles of globalization since the 1991 reforms. It remains to be seen whether self-reliance can be a viable economic policy for a country like India post-COVID, especially considering the interconnected nature of the global economy.

These criticisms highlight various concerns and raise questions about the effectiveness and long-term implications of the Atmanirbhar Bharat Abhiyan. Addressing these concerns and ensuring balanced policies becomes crucial for achieving sustainable economic growth.

Disadvantages of Atma Nirbhar Bharat Abhiyan

The Atma Nirbhar Bharat Abhiyan, while aiming to promote self-reliance, has its share of disadvantages and challenges. Here are the key drawbacks:

Credit Guarantees and Liquidity Focus: The monetary component of the Rs 20 lakh crore package primarily relies on credit guarantees and liquidity infusions into the banking and financial sector entities. This approach may not effectively stimulate the overall economy as it focuses on specific sectors, potentially limiting its impact on broader economic growth.
Inefficient Transmission of Monetary Policy: The bulk of the package consists of liquidity measures, which rely on transmitting these measures through financial institutions to the general public. Inefficient transmission of monetary policy can hinder the effectiveness of these measures in revitalizing the economy.
Lack of Adequate Demand: The package does not adequately address the decline in aggregate demand caused by the shutdown. Individuals across economic segments must have funds available for spending to stimulate investment. However, relying on credit infusions alone may not generate sufficient demand to drive economic recovery.
Burgeoning Fiscal Deficit: While the government claims the stimulus plan will amount to approximately 10% of India's GDP, the focus on reducing the fiscal deficit poses challenges in raising the necessary funds. Striking a balance between fiscal prudence and providing adequate financial resources for the stimulus becomes a delicate task.
Difficulty in Mobilizing Finances: The government's approach to raising funds for the plan through disinvestment encounters challenges. Many Indian businesses already have significant debt burdens, making it challenging to afford stakes in public sector undertakings (PSUs). Additionally, borrowing from foreign markets becomes more challenging when the value of the rupee against the dollar is at an all-time low.

Addressing these disadvantages requires careful policy considerations and adjustments. Balancing the focus on liquidity measures with measures to stimulate demand and exploring alternative avenues for raising finances can help mitigate these challenges and maximize the effectiveness of the Atma Nirbhar Bharat Abhiyan.

Key Achievements of Self-reliant India (Atmanirbhar Bharat Abhiyan)

The Self-reliant India (Atmanirbhar Bharat Abhiyan) mission has accomplished significant milestones, demonstrating progress towards self-reliance. Here are the key achievements:

Reduction in AC Imports: The mission has contributed to a significant reduction in the import dependence on air conditioners. Between October and November 2020, India witnessed a 65% decline in imports of split ACs. This achievement aligns with the government's policy of self-reliance and reflects the positive impact of the Atmanirbhar Bharat Abhiyan.
Indigenous Supply Chain of PPE Kits: Within 60 days of the mission's launch, India established an indigenous supply chain for personal protective equipment (PPE) kits. This achievement showcases the country's self-sufficiency in producing PPE kits, a crucial component in combating the COVID-19 pandemic.
Launch of the World's Largest Vaccination Drive: In January 2020, India commenced its largest vaccination drive, highlighting its determination to become self-reliant. Two "Made in India'' vaccines, Covaxin and Covishield, were instrumental in this endeavor.
Domestic Vaccination Coverage: As of April 14, 2021, India achieved a cumulative vaccination coverage of over 110 million people. This significant milestone demonstrates the progress in vaccinating the country's population and ensuring domestic vaccine availability.
International Vaccine Supplies: India has also contributed to global efforts by exporting over 65.5 million indigenous COVID-19 vaccines to more than 90 countries as of April 15, 2021. This demonstrates India's commitment to global cooperation and its capacity to meet domestic requirements while supporting other nations.

These achievements signify the progress made under the Self-reliant India mission, showcasing India's capabilities in reducing import dependence, fostering self-sufficiency, and contributing to global efforts during the pandemic.

Conclusion

The Aatmanirbhar Bharat Abhiyan, with its focus on self-reliance, holds the promise of delivering benefits to all sectors and individuals. By strengthening India's resilience and competitiveness in the global supply chain, the package seeks to support low-income people, laborers, and migrant workers from organized and unorganized sectors. India's favorable ranking in the World Bank's Ease of Doing Business survey reflects the conducive business environment in the country, further enhancing its prospects for self-reliance.

The recent government reforms, which have enabled commercial coal mining, introduced agricultural initiatives, opened up key industries to private companies, and implemented labor reforms, serve as strong pillars for India's economic development and offer significant opportunities for self-reliance.

Furthermore, the strong emphasis on the manufacturing sector, MSMEs, and supportive reforms like the Production-Linked Incentive (PLI) scheme will boost domestic manufacturing and attract foreign investments. This will contribute to India's path toward self-reliance.

However, addressing concerns about protectionism, reduced global integration, budgetary constraints, and implementation challenges is important. Striking a balance between self-reliance and global integration is crucial. The government should create an enabling environment that fosters innovation, attracts foreign direct investment (FDI), and promotes international collaborations. Transparency, accountability, and inclusive policymaking are essential to ensure the equitable distribution of benefits across society.

Ultimately, the success of the Aatmanirbhar Bharat Package relies on effective policy implementation, adaptability to evolving global dynamics, and a proactive approach to address challenges while leveraging opportunities. Through careful planning, continuous evaluation, and timely adjustments, the package has the potential to pave the way toward a more self-reliant and resilient Indian economy. By fostering self-sufficiency, promoting domestic industries, and leveraging global opportunities, India can strive towards sustainable economic growth, job creation, and enhanced well-being for its citizens. The Aatmanirbhar Bharat Abhiyan represents a significant step towards realizing this vision and securing a prosperous future for India.