An optimist would say every cloud has a silver lining. On May 12 at 8 PM, when Prime Minister Shri Narendra Modi addressed the nation, he had a similar approach and message for the citizens. The world is enduring the biggest catastrophe in a hundred years. COVID 19 is a new reality, a harsh truth that is slowly becoming a part of our everyday lives.
Successive lockdowns since March have wreaked havoc on the economic activity and the GDP of the country. The United Nations slashed India’s economic growth projection for the current year to 1.2 per cent, which still is second highest among major world economies.
The Prime Minister’s office and his Cabinet Ministers have been engaged in constant brainstorming with stakeholders and experts to lay a foundation for the new economic trajectory and came out with an ambitious plan of self-reliance: The Atmanirbhar Bharat Abhiyaan.
The messaging projected a need for localism and promotion of Make in India, launched in the year 2014 right after the BJP government took control. It’s an indicator for China, by first putting roadblocks to Chinese investments in the form of new FDI policy route and now this push for indigenous production to invite other prospective companies eager to shift base out China, which deceived the world by concealing the severity of the Virus back in December and also arrested the whistle-blower late Dr Li Wenliang who first intimated about the novel Corona Virus on a Chinese Social media platform.
For this self-reliance, the PM announced a historic stimulus package of INR 20 Lakh Crores amounting to almost 10 per cent of the GDP. The figure sounds like music to ears, especially for experts who demanded stimulus support of at least 5 to 6 per cent of the GDP. Though a few questions remain unanswered as to the source of this number and fiscal deficit balancing.
Majority of the economies worldwide are feeling the heat of the Corona Pandemic and have announced various support packages for their citizens. Japan’s COVID support amounts to 21.1 per cent of the GDP, The US gave support of 13 per cent, Germany gave 10.7 per cent, France 9.3 per cent, Italy 5.7 per cent, the UK gave 5 per cent and China, which was the home to Wuhan Virus gave only 3.8 per cent support.
The Finance Minister took the baton in her hand and on May 13, began series of her press conferences, laying the groundwork for the ambitious plan relying on five main pillars, i.e. Economy, Infrastructure, Tech-driven System, Demography and Demand. Apart from the new announcements, there is a slew of measures that the government took during the lockdown period to build the foundation for this Atmanirbhar Bharat.
There are about 63 million Micro, Small and Medium Enterprises ( MSME’s), which supposedly are the backbone of Indian economy contributing to 29 per cent of the GDP and will be major players in the Atmanirbhar Abhiyaan. They were a prime focus of the Finance Minister’s announcement, which dedicated six major steps for the same. The big one being, INR 3 lakh crores collateral-free government-backed automatic loans for businesses/SMEs, liquidity infusion of INR 50 thousand crores via funds of the fund, size definition liberalization and Global tender disallowance for govt projects of up to Rs 200 Crores, which in turn pushes Make in India. These efforts apart from addressing the investment and functionality issue would foster jobs and add to the pillar of infrastructure and demand.
Some major announcements were also made for the Employee Provident Funds, TDS and TCS cuts, Discoms, realty sector etc. Though widely extolled, they also met with criticism of not addressing the real problem of the downtrodden and the majorly affected migrant workers and small farmers.
Without giving much room for criticism, The Finance Minister reached Press Information Bureau within 24 hours with a support package for street vendors, migrants, small farmers and the middle class.
The second booster was no less powerful with revolutionary ideas in the form of technology-driven ‘One Nation One Ration Card’, addressing silos, leakages and food avail crisis. Affordable rental PPP mode housing was a sixer and so was the idea to support 50 lakh street vendors by credit facilities with an infusion of liquidity worth INR 50 thousand crores. Ground reports post these announcements showed a fall in the number of migrants walking back home.
The labour code modification is a step in the right direction to formalise the workforce, avert the job crisis and boost confidence. Special attention has been given to the right to health and women safety in these measures. Indian policy- making has been bereft of understanding women issues and adequate attention was missing. This pertinent announcement of making arrangements for night shifts with safety will address this missing piece of the puzzle.
Liquidity support to farmers and rural economy post-COVID, like 63 lakh loans worth INR 86,600 crores approved show that the government is willing to strengthen every sector of the country to move towards self- resilience. Some claimed this idea to be old wine in a new bottle and fears of protectionism were raised. The right approach would be a mixed concoction of both pushing local production and enabling foreign investments to make the products in India. Demand will depend on the quality and viability as consumers have experience of world- class imported products and will not settle for anything less.
Some of these measures received an overwhelming response from industry experts, stakeholders and key players. They welcomed these decisions and are hopeful for a U-turn shift for the economic activity and regard them as a cornerstone for the self-reliance aim. Apart from pushing local production, it would enthuse the entrepreneurial zeal of local producers and service providers. In a time when pessimism is at a peak, such cushion support is the holy grail for reviving spirits and achieving aims. After 1991 liberalization reforms, if implemented well, these big bang reforms will gear us to enter phase two of the rise of the Indian economy.
The key lies with implementation, message percolation, system reformation and checks and balances. The ball is in the court of state players and administrative actors to take the baton from the hands of the cabinet and run successfully with the support of 1.3 billion citizens to the end goal of ‘The Atmanirbhar Bharat’.
Author: Sanya Dhillon, Public Policy and Political Communications professional