The idea of self-reliance is not about a return to import substitution or isolationism: So what does PM Modi’s Atmanirbhar Bharat really mean?

Being self-reliant and self-sufficient is the way forward, said PM Modi while addressing the nation on May 12.

Since then, concerns are being raised over the government’s “Atmanirbhar Bharat” mission about whether the objective is to drag India back to import substitution and isolationism?

“It is important, at the very onset, to clarify that this idea of self-reliance is not about a return to Nehruvian import substitution or autarkic isolationism,” Sanjeev Sanyal, Principal Economic Adviser, Government of India, wrote in The Indian Express.

Need to attract FDI

“The Prime Minister emphasised that his vision includes active participation in post-COVID global supply chains as well as the need to attract foreign direct investment,” the official added.

Not a return to Inspector Raj

“Similarly, it should also be clear that it is not a return to licence-permit raj and inspector raj of the socialist era,” Sanyal clarified.

“Far from suggesting a centralised, top-down model directed from the “commanding heights” of the Planning Commission, the prime minister spoke of freeing Indian entrepreneurship and innovation from bureaucratic hurdles. This is about decentralised localism that takes pride in local brands, emphasises resilience and flexibility, and encourages local capacity-building and indigenisation,” the Principal Economic Advisor wrote.

Intellectual Underpinnings

“In order to understand the intellectual underpinnings of Atmanirbhar Bharat, therefore, it is necessary to skip past the socialist-era connotation of the term to an earlier era of thinkers like Swami Vivekananda. In this context, the idea of self-reliance is about resilience, leveraging internal strengths, personal responsibility, and a sense of national mission (or “Man Making” to use the late 19th-century expression of Swami Vivekananda),” Sanjeev Sanyal added.

“Self-reliance implies that product and factor markets are made flexible in order to allow the Indian economy to adapt to the problems and opportunities of an emerging post-COVID world,” the Principal Economic Advisor wrote.

An unapologetic commitment to privatisation

He also added that the government has an unapologetic commitment to the privatisation of non-strategic public sector entities, opening up of new sectors like space to private investment, decriminalisation of most aspects of corporate law, all to make Indian economy to adapt to the problems and opportunities of an emerging post-COVID world.

Liberalisation of the farming sector

“The recently announced liberalisation of the agriculture sector is a good illustration of this world view and its economic implications,” he opined while talking about the recent changes in the Essential Commodities Act (ECA) and the state-level Agricultural Produce Marketing Committee (APMC) Acts.

Self-reliance also means a commitment to resilience

“Self-reliance also means a commitment to resilience at multiple levels — at a national level, an industry level, and at an individual level. For example, the government has indicated that it would provide various forms of incentives and protection to key industries — for example, inputs for the pharmaceuticals industry. We have just witnessed how the vagaries of global supply chains can choke a key industry when it is needed most,” Sanjeev Sanyal, Principal Economic Adviser, Government of India, penned down.

So where does this approach lead?

A decentralised system, where economic entities are expected to be self-reliant, requires a generalised system of social trust and the ability to enforce contracts. In turn, it implies a need to carry out administrative reforms and, more specifically, reform of the legal system.

As argued repeatedly in recent Economic Surveys, the inefficiencies and delays of the legal system are now the single biggest hurdle to economic development.

This is not just about the judicial process but the wider ecosystem of rules, regulations, policing, investigation and so on. It is not a coincidence that Prime Minister Modi had clearly mentioned “Law” as one of the pillars of his vision, Sanjeev Sanyal wrote.

Source: Indian Express

Follow us on Google News