Self-reliance after lockdown a long-term goal

Context: The outdated concept of self-reliance marred with red-tapism and unthoughtful import substitution needs to be differentiated for the recent clarion call on Athmanirbharta by the PM.

Outdated concept

• Integral part of the national movement: The original idea of self-reliance flowed from the motto of swadeshi and boycott of colonial foreign goods.
• Import substitution: led to the rise in red-tapism and license raj system.

Echoes of the past in Government’s Policies:

• Increased tariffs: on the wide array of products in the last budget.
• Dismissive comments: made by ministers about global investors (Amazon)
• Formulation of import substitution policies: as insisted by Union Road Transport Minister.
• Excessive bureaucratic coercion: can be noticed in complex phraseology used for keeping people in lockdown and oppressing masses by police personnel.

Redefining Self-Reliance

• Not a return of Nehruvian era: As clarified by Finance mInistry’s economic advisers it is a  ‘decentralized localism’, meant to encourage local capacities and indigenisation.
• Placing self-reliance on the contemporary context of globalisation: 

• Every country cannot cost-effectively make everything. 
• Identify the competitive sectors carefully. E.g. information technology didn’t require as much support as needed by food processing to achieve steep growth.

• Create an enabling environment: 

• Reduce bureaucratic red-tapism: to allow businesses to flourish
• Easier land acquisitions: ensuring the availability of critical infrastructures like power, better roads, and internet connectivity. 
• Application of flexible labour laws: as opposed to the current suspension of all.
• Implement ground-impacting polices: like amendments in Essential Commodities and other farm sector reforms to ensure structural transformation.
• Heavy dependence on banks: will worsen the debt to GDP ratio in the long term. 

• Tackling China:

• Improve Ease of Doing Business: This would ensure a tangible shift of companies looking for relocating out of China.
• Neutralize China’s dumping: through anti-dumping duties
• Avoiding rhetoric: limiting Chinese imports through social media as it only has limited and transitory outcomes.
• As an export destination: In the wake of pandemic and declining global trade, China could act as the solution to India’s export-led growth.

Way Forward:

• Short term revival is very much essential to achieve medium to long term goal of self reliance.
• This is the time for a stimulus in the short run even while continuing to move on long- term reforms.