Post-Covid prescription

Context: According to the World Bank, the phenomenon of trade-led catch-up growth is petering out; thus, Atmanirbharta is the way that can help India bounce back from the effects of Covid-19.

India’s growth strategy before the policy of self-reliance (Atmanirbharta)

• Import substituting growth strategy of the 1960s: Failed because the high protective customs barriers led to the growth of non-competitive industries that were locked into older technologies.
  • E.g. Ambassador Car.
• Trade-led catch-up growth strategy of the 1990s:  Resulted in high relative growth rates driven by globalization and export.
  • But this strategy is petering out due to the process of de-globalization, reduction in the demand for exports, and reduced service exports from the tourism, travel and hospitality sector due to COVID.

Intended benefits of achieving Atmanirbharta in various sectors

• Health sector: Atmanirbhar Swasth Bharat will invest over Rs 64,000 crore in setting up rural and urban health and wellness centres and critical care hospitals in the districts. 
  • This investment can be best utilized if India creates 60 health workers per 10,000 population (presently at 29 health workers per 10,000 population), creating 4 million new jobs.
  • Vaccine development: Serum Institute’s collaboration with Oxford University and AstraZeneca enabled India to book Covishield, even as Europe, Canada and Brazil are struggling.
• Infrastructure sector: 
  • In Railways: For E.g. Railways aims to build lay 9.5 km of track daily and achieve 100 % electrification and zero carbon footprint by 2024. 
  • Heavy investments in urban mass transit systems since 2014, with construction in over 40 cities.
  • The resolution of financial problems of blocked PPP projects and smooth land acquisition process has increased the pace of construction of national highways from 3,330 km per year during 2009-20014 to nearly 9,450 km in 2020-21.
• Green technologies:
  • Reduce solar prices: down from Rs 17 per unit in 2010 to Rs 2.44 per unit in 2020.
  • Reduce transmission losses: As renewable sources like solar power can be generated at the points on consumption- (unlike coal, hydro or even wind)
  • Reduce carbon footprint: Thus helps to achieve targets set under the Paris Climate Agreement.

Way forward: To realize the full potential of Atmanirbharta

• In the Infrastructure sector: Expand the commercial land allocation model of Maharashtra throughout the country, which helped in financing the metro, trans-harbour links and industrial infrastructure.
  • Similar model, along with financial decentralization, has resulted in China’s supernormal growth in infrastructure.
• Promote solar power: by - 
  • Incentivising farmers to install their solar-powered pumps. 
  • Providing state support to Public-private partnership (PPP) projects to establish small local solar grids for local farmer groups