As reported on October 19, 2020, two renowned professors of Economy, Shoumitro Chatterjee and Arvind Subramanian, at Pennsylvania State University and Ashoka University, respectively, have expressed their concern over the ‘Atmanirbhar’ policy of the Government of India. They argue that the adoption of Atmanirbharta by India’s intellectual and policy community—an inward turn, rather return—amounts to abandoning two core principles of the post-1991 consensus, i.e., export-orientation on the macro-economic side, and slow but steady liberalisation on the trade side.
Subramanian, the chief economic adviser to the Indian government recently, and Chatterjee are of the view that the Atmanirbhar policy will not work because India’s GDP ‘seems alluringly big’ at US$ 2.9 trillion and as the fifth-largest economy in the world. However, if the domestic market is to sustain growth, the government needs to look at the size of the market like the ‘middle class’ with some amount of purchasing power over manufacturing goods and services. They assume that this middle-class market size is between 15 and 40 per cent of GDP, which is smaller than commonly believed and substantially smaller than any potential world market that Indian firms and producers can and should compete for.
There are two major reasons for the reduction of the market for consumption. One, there are a lot of poor people with limited purchasing power, and two, a few people with a lot of purchasing power, who save a lot. Therefore, the policymakers should set their sight on the world market, rather than the domestic one. Normally, a failure is an intellectual orphan, and India seems to make an orphan of spectacular success through inward turn.
Therefore, they argue that India’s growth model has been an export-led one, which should not be abandoned at any cost. Not only that, India’s export opportunities, in general and in specific sectors, could be significant even in a post-Covid scenario.
Besides, some others view this as a re-packaged version of the Make in India drive, using new taglines like ‘Vocal for Local’. As for Opposition members, they say that India enacted policies and built companies since its creation to make India self-reliant, such as SAIL for steel production, IITs for domestic engineers, AIIMS for medical sciences, DRDO for defence research, HAL for aviation, ISRO for space, CCL NTPC and GAIL in the area of energy. They regard the Atmanirbhar mission as advertising tactics in the re-packaged scheme, or a re-phrased ‘Fend for Yourself’ campaign.
Atmanirbhar Bharat Abhiyan means an effort to become ‘self-reliant’. Prime Minister Narendra Modi announced, on May 12, in his address to the nation while announcing economic package of Rs 20 trillion to aid the country out of the coronavirus crisis. He said that the economic package would play an important role in making India ‘self-reliant’ and that it would benefit labourers, farmers, honest tax payers, MSMEs, and the cottage industry. The Atmanirbhar Bharat would be based on 5 pillars, namely, 1. Economy; 2. Infrastructure; 3. Technology-driven System; 4. Vibrant Demography; and 5. Demand. As per the government, self-reliance does not advocate a self-centred protectionist system.
Courtesy: Indian Express, business-standard.com