Overview: An Introduction
Atmanirbhar Bharat Abhiyaan or the Self-reliant India campaign is the vision of new India envisaged by the Hon’ble Prime Minister Shri Narendra Modi. On 12 May 2020, PM Modi raised a clarion call to the nation giving a kick start to the Atmanirbhar Bharat Abhiyaan (Self-reliant India campaign) and announced the Special economic and comprehensive package of INR 20 lakh crores – equivalent to 10% of India’s GDP – to fight Covid-19 pandemic in India.
The aim is to make the country and its citizens independent and self-reliant in all senses. He further outlined five pillars of Aatma Nirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand. The Finance Ministry further announced Government Reforms and Enablers across Seven Sectors under Aatmanirbhar Bharat Abhiyaan. The government took several bold reforms such as Supply Chain Reforms for Agriculture, Rational Tax Systems, Simple & Clear Laws, Capable Human Resource and Strong Financial System.
A Brief History
During its independence movement, India saw a push for political self-reliance, for swaraj (explained as self-governance or self-rule). Thinkers of the time such as Mahatma Gandhi and Rabindranath Tagore also explained self-reliance in terms of a nation and the self. This included the discipline of an individual and the values in a society. With the foundation of educational institutes such as the Visva-Bharati University, Tagore also brought India closer to self-reliance in education. M.S. Swaminathan writes that in his youth, “like that of most others in India of the 1930s, was a period of idealism and nationalism. Young and old shared the dream of a free and self-reliant India. Purna Swaraj (total freedom) and swadeshi (self-reliance) were our goals…”.
Economic self-reliance and dependence
The swadeshi movement (where Swadeshi is an adjective explained as ‘of one’s own country) was one of the sub-continents most impactful pre-independence movements. It was successfully implemented in the aftermath of the partition of Bengal in 1905.
Indian nationalists emphasised economic self-reliance in the years leading up to independence, of which planning was an important part. The National Planning Committee of the Indian National Congress (INC) was formed in 1938 under INC president Subhash Chandra Bose. The committee was multi-disciplinary and comprised well-known personalities from across the sub-continent. Bose lent his full support to the planning efforts to make independent India an economic unit, industrialised and self-sufficient. However, there was much opposition to these plans, including non-cooperation by noted leaders like Gandhi & Nehru, who opposed the type of industrialisation being championed and labelled the committees efforts pointless. Another pre-independence effort to chart out the course for the economic development of independent India during its years of decolonisation was the Bombay Plan, penned down by J.R.D. Tata, G.D. Birla and A.Dalal among others. The Bombay Plan sought to make India self-sufficient by increasing the state’s role in all aspects of the economy, a stark contrast to 21st century India. In the following years India took cue from economic models in the Soviet Union, later becoming aware of other models such as those of South Korea, Taiwan and Brazil.
Independent India’s first major policy document, the Industrial Policy Resolution of 1948, echoed the “national consensus” regarding how India was to proceed as a nation. This national consensus called for a mixed economy and self-reliance. Under Prime Minister Lal Bahadur Shastri, India’s Green Revolution and White Revolution (Operation Flood) paved the way for India to become self-sufficient and one of world leaders in producing various agricultural products such as milk and tea.
India has seen a shift in the principles governing its defence production— self-sufficiency was followed by self-reliance, which in turn saw changes such as an emphasis in public-private co-production and independent private production. In 1992 a Self Reliance Review Committee was formed under A.P.J. Abdul Kalam, then the Scientific Advisor to the Defence Minister. The committee created an index, called the self-reliance index, to identify the degree of content that was made in India as a part of the total procurement. The ten year target to increase self-reliance in defence was never achieved. Further, this index did not take into account factors like critical components or sanctions during an actual conflict.
In 2000, K.Subrahmanyam of India’s National Security Advisory Board emphasised the need to distinguish between self-reliance and self-sufficiency in the defence sector. He laid emphasis that the most pragmatic way for India would be to go towards self-reliance and not self-sufficiency. This would lead to its own challenges such as the reliance and integrity of the supplier.
The government’s vision for an ‘Atmanirbhar Bharat’ (self-reliant India) is laudable. This is not a new idea, though. Indeed, self-reliance was a key reason for a newly-independent India to lay emphasis on a public sector that, over time, was present in virtually every sector- from aviation to zinc. During the 1980s, the emergence and development of India’s private sector were powered by buzz phrases such as ‘Import-substitution’ and ‘Be Indian, Buy Indian’.
Especially in the past three decades, as India has opened up its economy in a calibrated manner, its large domestic market attracted investments across sectors. While market size is undoubtedly an important criterion, other aspects that make it easy to do business are just as critical. As a nation, India competes with other countries. In an increasingly globalised world, when investors (foreign or domestic) commit risk capital to India, they are making a conscious choice. Other countries (e.g. Vietnam, Malaysia, Bangladesh etc.) may not have large domestic markets themselves but are attractive as hubs for manufacturing products that are then exported around the world, giving a boost to the local economy.
Through sector-specific ‘liberalisation’ and ‘reforms’, Indian governments have, since 1991, been taking steps to attract investments into the country. Modifying the legal framework governing such investments and operations is a key enabling action. The results are visible, as India has become self-reliant in many areas.
Today, the nation exports many products and services to countries worldwide- including the world’s most developed nations. But there are still many gaps that need to be plugged. Electronics are embedded in almost every industry, but India as a nation is a long way off from being self-reliant in this strategic field. Vital ingredients for the pharmaceuticals sector are also imported, as are telecom and defence equipment vital to our nation’s security.
For decades, governments and entrepreneurs have mistrusted each other. High levels of mistrust have also existed between private sector management and the labour force. In the context of India’s cooperative federal structure, as regional political parties have emerged and been elected to power, the chasm of mistrust between state and central governments too has generally widened. That is why sectors such as agriculture and education, which are both fundamental building blocks of any economy, continue to be shackled by many regulatory restrictions. India’s labour law regime also continues to be viewed as lacking the flexibility that exists in many other countries.
That India has the potential to grow rapidly is well-known. But to realise this potential, the nation needs to quickly bridge the widespread trust deficit and ensure that all stakeholders are aligned towards the overall purpose of the country’s overall development. Given India’s large population, levels of illiteracy, weak healthcare infrastructure, wide income disparity and lack of a social security net, there is no silver bullet. That is why, what is needed is a holistic approach that enables balanced, all-round development of every component of India’s economy- agriculture, manufacturing and services.
This kind of mindset will inevitably create competition amongst states to attract investment- and thus infrastructure, jobs and overall development. Such competition will force politicians, private enterprise owners, citizens, and other stakeholders to work towards a common purpose. We have started seeing this play out in bits and pieces in some parts of the country, but much more needs to be done by state governments, given that the onus for formulation and implementation of many policies that are critical to creating a welcoming investment climate lies with them.
Here are 10 examples that clearly signal the government’s intent to make it easier for companies to do business in India and thus contribute to an ‘Atmanirbhar Bharat’:
- Introduction of the Production Linked Incentive (PLI) scheme to attract manufacturers of mobile phones, electronic components and microelectromechanical systems to make in India.
- Changes to the Companies Act (e.g. decriminalisation of offences other than fraud or where the larger public interest is involved, removing imprisonment as punishment for minor offences, etc.)
- Changes to labour codes relating to Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions. It is expected that these changes will give companies with less than 300 workers greater flexibility in retrenchment without obtaining prior government approval. The changes also restrict workers’ rights to strike work without giving 60 days’ notice.
- Changes to the Insolvency and Bankruptcy Code.
- Allowing farmers to sell agricultural produce outside the Agricultural Produce Market Committee (APMC) mandis reduces middlemen’s role and gives farmers the option to sell their produce at more remunerative prices.
- Allowing companies to raise equity capital outside India by listing their shares in specified foreign jurisdictions (without requiring listing in India as well).
- Allowing private sector participation in the space sector, including launching satellites, setting up control centers outside India, develop new systems and offer ‘Spacecom’ services around remote sensing, navigation, space exploration etc.
- Simplifying the Environment Impact Assessment (EIA) process for certain projects.
- Changes to the Food Safety and Standards Authority of India (FSSAI) regulations to make people more aware of the health risks of packaged foods and banning of e-cigarettes to ensure that our citizens can make better-informed choices around their health.
- Reducing ownership of firearms by decreasing the number of firearms allowed and the validity of the license.
Many of country’s laws had been formulated several decades ago when every aspect of society was very different. The intervening period has seen myriad changes driven by technology, greater awareness of the environment and the imperatives to protect it, progress in the field of medicine and health care, etc. Perhaps the most significant change has been ushered in by the Covid-19 pandemic, which has fundamentally changed the way millions of people live and work.
As our environment evolves, it is only natural that laws too will need to evolve in tandem to ensure that they remain relevant and effective.
As the policy-makers formulate new policies and enact new laws, they would do well to be guided by the line ‘Where the clear stream of reason has not lost its way into the dreary desert sand of dead habit’ from Gurudev Rabindranath Tagore’s famous poem ‘Where the mind is without fear’. While modifying laws and framing new ones, the objective should be to enable and not just control.
Here are some additional areas that the government must urgently turn its attention to:
- Enact specific data protection laws that are appropriate to India in light of the growing wave of digitalisation around us. Making tweaks is not enough; a comprehensive legal framework is needed.
- Eliminate the need for multiple regulatory filings by allowing companies to upload data to one location from where regulators can access what they need. This can go a long way in easing the compliance burden. A study by Teamlease has found that Indian businesses operate under the burden of more than 65,000 compliances, including 2,500 regulatory updates and 3000 filings in a year.
- Come out with a Direct Tax Code that reduces the need for frequent and large-scale changes and thus provides a higher degree of stability and predictability to companies and individuals.
- Rationalise the GST regime by reducing the number of rates and further simplifying the compliance process.
- The New Education Policy to encourage “critical thinking” in students and enable the creation of world-class institutions of higher education in India is an excellent step. In order to accelerate this transformation, I believe the government must enable reputed foreign universities to set up campuses in India. Perhaps this can start with online access to classes- a phenomenon the pandemic has already forced on educational institutions. In addition to creating domestic R&D capabilities in areas such as robotics, AI, healthcare, etc., such a move can also help India conserve valuable foreign exchange in the form of the money spent by Indian students studying abroad- resources that can be deployed elsewhere.
Of course, building political consensus around such policies will not be easy. But the emerging context can be said to have created a conducive environment to push forward with bold structural reforms that will help transform India holistically, and not just facilitate lop-sided development.
Make in India & Aatmnirbhar Bharat
Athough, Make in India and Aatmnirbhar Bharat both campaigns initiated by the government aim towards strengthening the economy and help nation attain self reliance (aatmnirbharta) and become a major export hub using the manufacturing capabilities of the country through its vast workforce, both skilled and in enormous numbers for the outer world, there is categorical difference between the two.
The Aatmnirbhar Bharat campaign, which on the one hand, focuses more on attaining greater self-reliance for the nation through various initiatives. The ‘Make in India’ initiative is somewhat a broader concept where the government is inviting producers across the globe to come and invest in the country. Through the Make in India initiative the government wishes to showcase the immense opportunities lying with the Indian Sub-continent to the outer world in terms of an ideal location for production of varied goods required for global fraternity.
The Make in India campaign further, is a major national programme of the Government of India designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure in the country. The primary objective of this initiative is to attract investments from across the globe and strengthen India’s manufacturing sector.
It is being led by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India. The Make in India programme is very important for India’s economic growth as it aims at utilising the existing Indian talent base, creating additional employment opportunities and empowering secondary and tertiary sector. The programme also aims at improving India’s rank on the Ease of Doing Business index by eliminating the unnecessary laws and regulations, making bureaucratic processes easier, making the government more transparent, responsive and accountable.
Prime Minister, Mr Narendra Modi in his maiden Independence Day speech from the ramparts of the Red Fort on August 15, 2014 introduced the Make in India programme for the first time. He urged people across the globe to come and manufacture in India with a liberty to sell the finished goods in any part of the world. He asked the global fraternity to use the skill, talent, discipline and desire of the Indians to do something while giving the world an opportunity to come and make in India. The initiative was formally introduced on September 25, 2014 by Mr Modi at Vigyan Bhawan, New Delhi, in the presence of business giants from India.
The focus of Make in India programme is on 25 sectors. These include: automobiles, automobile components, aviation, biotechnology, chemicals, construction, defence manufacturing electrical machinery, electronic systems, food processing, IT & BPM, leather, media and entertainment, mining, oil and gas, pharmaceuticals, ports and shipping, railways, renewable energy, roads and highways, space, textile and garments, thermal power, tourism and hospitality and wellness. The initiative targeted 25 economic sectors for job creation and skill enhancement and transformed India into a global design and manufacturing export hub.
The ‘Make in India’ campaign has three stated objectives:
- To increase the manufacturing sector’s growth rate to 12-14% per annum;
- To create 100 million additional manufacturing jobs in the economy by 2022;
- To ensure that the manufacturing sector’s contribution to GDP is increased to 25% by 2022 (later revised to 2025).
After the launch, India gave investment commitments worth Rs. 16.40 lakh crore (US$220 billion) and investment inquiries worth of Rs. 1.5 lakh crore (US$20 billion) between September 2014 to February 2016. As a result, India emerged as the top destination globally in 2015 for foreign direct investment (FDI), surpassing the United States and China, with US$60.1 billion FDI.
As per the current policy, 100% Foreign Direct Investment (FDI) is permitted in all 100 sectors, except for Space industry (74%), defence industry (49%) and Media of India (26%). Japan and India had also announced a US$12 billion ‘Japan-India Make-in-India Special Finance Facility” fund to push investment.
In line with the ‘Make in India, individual states too launched their own local initiatives, such as ‘Make in Odisha’, ‘Tamil Nadu Global Investors Meet’, ‘Vibrant Gujarat’, ‘Happening Haryana’, and ‘Magnetic Maharashtra’. India received US$60 billion FDI in FY 2016–17.
The World Bank’s 2019 Ease of Doing Business report acknowledges India’s jump of 23 positions against its rank of 100 in 2017 to be placed now at 63rd rank among 190 countries. By the end of 2017, India had risen 42 places on Ease of doin g business index, 32 places World Economic Forum’s Global Competitiveness Index, and 19 notches in the Logistics Performance Index, thanks to recent governmental initiatives, which include converges, synergies and enables other important Government of India schemes, such as Bharatmala, Sagarmala, Dedicated Freight Corridors, Industrial corridors, UDAN-RCS, Bharat Broadband Network, Digital India.
Make in India has not yet achieved its goals. The growth rate of manufacturing averaged 6.9% per annum between 2014–15 and 2019-20. The share of manufacturing dropped from 16.3% of GDP in 2014-15 to 15.1% in 2019-20.
Summary & Conclusion
Atmanirbhar Bharat which translates to ‘Self-reliant India’, is a phrase used and popularised by Prime Minister Mr. Narendra Modi and the Government of India in relation to the economic vision and economic development in the country. In this context, the term is used as an umbrella concept regarding making India a larger and more involved part of the world economy, pursuing efficient, competitive and resilient policies that encourage equity, and being self-sustaining self-generating.
The english phrase has been used by PM Modi since 2014 in relation to national security, poverty and digital India. The first popular mention in hindi came in the form of the ‘Atmanirbhar Bharat Abhiyan’ or ‘Self-Reliant India Mission’ during the announcement of India’s Covid–19 pandemic related economic package in 2020. Since then phrase has been used across ministries such as the Ministry of Consumer Affairs, Food and Public Distribution, the Ministry of Education and the Ministry of Defence in relation to press releases, statements and policies. The government has also used the phrase in relation to India’s new National Education Policy and the 2021 Union Budget of India. The concept under the premiership of Narendra Modi has been adapted from previous explanations and usages of the concept in the Indian sub-continent.
The swadeshi movement was one of India’s most successful pre-independence movements. The country’s former Planning Commission has used self-reliance as a phrase and concept in multiple Five-Year Plans of India between 1947 and 2014. Commentators have noted that India has been enacting policies and building institutions that promote self-reliance since the day it was created. Private companies and their products have been considered as fine examples of self-reliance in India encompassing sectors such as beverages, the automotive sector, cooperatives, the financial services and banking sector and the pharmaceutical and biotechnology sector.
In the backdrop of the Coronavirus pandemic in India, the pandemic induced lockdown, and a pre-existing slowdown in the growth of the domestic economy and the economic impact of the pandemic, the government came out with an adapted idea of self-reliance. On 12 May 2020, Prime Minister Modi used the hindi phrase popularly for the first time when he said, “the state of the world today teaches us that (Atma Nirbhar Bharat) “Self-reliant India” is the only path. It is said in our scriptures — EshahPanthah. That is — self-sufficient India.” While the speech was in Hindi, this reference by Press Information Bureau to both “self-reliance” and “self-sufficiency” caused some confusion. The Indian government came out with an economic package in the coming days labelled as the Atmanirbhar Bharat Abhiyan (Self-reliant India Mission) says the same, “atmanirbhar” can be translated as both self-reliance and self-sufficiency.
The adapted self-reliance or Aatmarnibharta that emerged was ready to associate with and challenge the globalised world, as opposed to past decades where there had been a wish to disassociate, such as during the pre-independence swadeshi movement and the matter of post-independence foreign aid. However, even swadeshi has been adapted with slogans such as ‘vocal for local’ while at the same time global interconnectedness is being promoted. The government aims to reconcile this, Economist Intelligence Unit explains, “Modi’s policy aims to reduce domestic market access to imports, but at the same time open the economy and export to the rest of the world”.
Prime Minister Modi used the phrase ‘self-reliance’ in June 2014 in relation to defence manufacturing for self-reliance in national security. He reiterated this over the years, including in 2018 and the need for India to make its own weapons. In August 2014 he connected self-reliance to Digital India and in September 2014 to making the poor self-reliant.
Its proponents, including Prime Minister Modi and cabinet ministers for finance and law, have said that this self-reliant policy does not aim to be protectionist, exclusionist or isolationist in nature. For India, self-reliance plays out as being a larger and more important part of the world economy. The concept requires policy-making that allows this to happen, including efficient and resilient policies and policies that encourage equity and competitiveness. It means being self-sustaining and self-generating. This translates to creating “wealth and values not only for ourselves but for the larger humanity”. In March 2021, Finance Minister Nirmala Sitharaman reiterated that the Atmanirbhar Bharat campaign was not bringing back socialism or import substitution, rather the intention is to boost manufacturing. The five pillars of ‘Atmanirbhar Bharat’ have been elucidated as— economy, infrastructure, technology-driven systems, vibrant demography and demand.
Metro Rail News is conducting a 2nd Edition InnoMetro 2022 on 28-30 April 2022, virtually focusing on Seamless Mobility. Join InnoMetro 2022 for a detailed discussion on the topic “Realising Atmanirbhar Bharat”.
Join as a delegate: https://bit.ly/3uihjkd
Join as a Speaker: https://bit.ly/3N7lcRj
Join as a Partner: https://bit.ly/3widL3Y