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Atmanirbhar Bharat: Implementation Conundrum

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In the wake of the unprecedented and catastrophic Covid-19 pandemic, India has come to realize the importance of self-reliance and self-sufficiency without closing the doorway to foreign countries, instead to attract more foreign investment, enhance technology, boost employment and generate skilled labour. The ‘Atmanirbhar Abhiyan’ (ABA) package has been implemented in the aftermath of the unforeseen economic upheaval that every country, all and sundry, has been facing. The package aims at liquidity infusion and credit expansion to give an impetus to the derailed economy nationwide.  The Prime Minister of India asserted to the whole country to become ‘Atmanirbhar’ for reviving as well as boosting the country’s economy and bringing self-sufficiency; thereby reducing its reliance on foreign countries, improving its balance of trade and establishing a strong foothold over other countries. The slogan ‘make for world’ has been supplemented to ‘make in India’ whereby the ABA package has broached vital measures on miscellaneous grounds. A step so dauntless seems revolutionary on paper, but would its implementation be as effective as it seems?

The Five phases of Atmanirbhar Bharat are:

  1. Businesses including MSMEs (Micro, Small and Medium Enterprises):

The MSMEs form the backbone of the Indian economy, given that they majorly contribute to the manufacturing, industrial, trading and service sectors. MSMEs contribute nearly 30 percent of the Gross Domestic Product (GDP) and 31 percent of the Gross Value Added (GVA). Yet the growth of these enterprises is shunned due to lack of institutional or non-institutional sources of finance; whereby few of the MSMEs are still facing the wrath of GST and demonetization. The impact of Covid-19 has significantly worsened the situation for MSMEs. In order to take the edge off the dwindling economy for the MSMEs, the first phase of the ABA package involves a support of 3.7 lakh crore. The aim is to meet operational liabilities, purchasing raw materials, and resuming the production capacity of the MSMEs. The same is sought to be achieved by financial support and preferential tax policies to relieve MSMEs. 

But would it be so plain sailing to relieve the burden of the MSMEs with these provisions, if the demand itself stays knee-high and the sale remains indifferent- the financial support and preferential tax policies would seem inutile then. Unless the cycle i.e. Purchasing power leads to demand, demand leads to supply, supply is met by productions, more production is met by investment, is not kick-started the state of normalcy cannot be retained. Moreover, the relief provided to these MSMEs would aid them to absolve the debts that they have incurred formerly, the situation would be just tad improved for a while. Unless demand does not come back to normalcy, the production would go in vain, ergo, leading the MSMEs into losses and eventually into insolvency.

  1. Agricultural reforms: 

Along the lines of ABA, three ordinances, The Farmers Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020; The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020; and The Essential Commodities (Amendment) Ordinance, 2020 have been introduced for the betterment of the farmers and have sought to be conclusive for bringing out revolutionary changes in the archaic system which followed the middlemen system. The farmer would now be able to trade intrastate as well as interstate without the middlemen.

Yet a major drawback of these bills is that the provisions do not focus on the small-holder farmers. India is home to about 120 million smallholder farmers who contribute over 40% of the country’s grain production and over half of its fruits, vegetables, oilseeds, and other crops. These farmers would not have the knowledge of the availability of greater flexibility and the freedom to trade on one’s will while doing away with the middlemen system. To make these reforms a success, a holistic approach needs to be undertaken to focus on the needs of smallholder farmers- To appoint an expert at the village level to guide the farmers, facilitate access to physical and virtual markets, places for warehousing, and an efficient transport system for intrastate as well as interstate trading.

  1. New horizons of growth: 

 Tranche 4 has been one of the highlights of the ABA Package. The new horizons of growth deal encompass the following sectors- Coal, mineral, defence, civil aviation, power, social infrastructure, space, atomic energy. In the wake of the geopolitics surrounding China, Indian as well as other countries have made up their mind to reduce their dependency as well as limit trade relations with China. 

In the same direction, The Government’s initiative to allow private investments has opened doors to significant and remunerative opportunities for foreign investments, self-reliance, employment generation, and gradual development. Nonetheless, the foreign companies would only be attracted when there is suitable land availability, non-complex labour laws, favourable tax system, a cheap transportation system; stand unaddressed in the ABA package. Additionally, the measures undertaken by the Government should have been incorporated earlier, even when COVID-19 was not in existence

Another point of contention is that the ABA package mainly focuses on regularizing and improving the ‘supply’ side, but the ‘demand’ side which itself is in an inept condition to meet the ‘supply’ side, in such a situation, without any demand the supply forces would go futile. There should have been reforms propelling the consumption side of the economy which includes lowering of taxes, subsidized prices of commodities, and effective digitalization which would facilitate people in every nook and cranny. 

  1. Government Reforms and Enablers:

Covid-19 has left an indelible mark on employment in the country; people have lost jobs, businesses have shutdown, and savings have become the livelihood of individuals. Out of all the sectors, the informal sector is the worst affected due to its lack of assurance of job security and social protection. Close to 81% of all employed persons in India make a living by working in the informal sector. The allocation of an additional Rs 40,000 crore for MGNREGA to provide employment boostwould help generate employment for migrant workers on a large scale, but the main point of contention over here is the unemployment of the informal sector. Deprived of work by contractions in demand and supplies, by logistical disruptions, labour blockages, and physically inaccessible credit, and frequently stranded without flexible assets to buffer them, they only have the state and citizens’ entitlements for economic and social protection. It forms the backbone and bread-earner of millions of people in this country, yet they are not even remotely within the regulatory reach of the state.

 Ergo, the state should undertake measures to regulate the unorganized sector and thereby rekindle and regenerate employment opportunities which are a prerequisite for restoring the lost opportunities and embracing the new avenues of uplifting the economy. Another hurdle for Atmanirbhar Bharat is unemployment due to illiteracy. Within the social infrastructure of the ABA package, the government has formulated and implemented national education policies that could revamp the tepid educational system. Yet the moot question remains about the literacy rate which stands at 77.7% as of 2017-18  that stalls India from becoming ‘Atmanirbhar’. For India, its colossal population stands as a liability owing to its uneducated and thereby, unproductive individuals whose contribution stands negligible for the economy.

Conclusion:

The ABA package is endowed with reliefs, opportunities, and impetuses to restore and strengthen the economy and make India self-reliant and staunchly competent in the eyes of other countries. Nonetheless, other than the hurdles abovementioned; red-tapism, corruption, extraneous oppositions from the opposition parties on various reforms introduced by the Government, and lack of coordination between relevant authorities make the reality of Atmanirbhar Bharat impracticable and speculative. If only every Tom, Dick, and Harry of this country endeavours to make this vision a reality, can Atmanirbhar Bharat become a dream come true!

Bibliograpgy-

1 Building Atmanirbhar Bharat and Overcoming Covid-19, National Portal of India, https://www.india.gov.in/spotlight/building-atmanirbhar-bharat-overcoming-covid-19

2 Subash Sasidharan, Rajesh Raj S. N, MSMEs and Covid-19, COVID-19: Challenges for the Indian Economy – Trade and Foreign Policy Effect, Pg. 190, May 2019

3  Deepa Maggo, Impact of COVID-19 on smallholder farmers – insights from India, wbcsd, 2 Jun 2020, https://www.wbcsd.org/Overview/News-Insights/WBCSD-insights/Impact-of-COVID-19-on-smallholder-farmers-in-India#:~:text=India%20is%20home%20to%20about,vegetables%2C%20oilseeds%20and%20other%20crops.

– Manasi Joglekar, Writer

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