Aatmanirbhar has been probably the most widely discussed word in India since 12 May. PM Narendra Modi addressed the nation on that day to update us about the challenges that our nation will be facing and his vision for the future, especially since the ongoing coronavirus crisis has not just changed the geopolitics of the world, but ushered the time for India to get the place it deserves on the world stage.
If we look at the global success stories of the last seven decades, i.e. after World War II, then we realise that no nation, whether democratic or autocratic, has been successful in eliminating poverty or to increase the income level enough to match the likes of Western European countries if they have adopted the socialist, leftist or anti-capitalization model of economics. Sadly, we chose to align India with the Soviet Union after Independence and we are still suffering as our per capita income, industries, and technology have not increased with the alacrity sufficient to lift people out of poverty. Consider this: The per capita income of India in 1960 was $80, China’s per capita income in 1960 was $82 and South Korea’s per capita income in 1960 was $130. Today the per capita income of these three countries is $2,000, $9,770 and $31,000 respectively.
The reason we lagged behind these two (and many more) countries is that they designed their policies and made laws in a way to nurture their domestic industry, made it cost-competitive and adopted technology to enable global expansion. Companies, on their own, cannot conquer the world. They need the support of the government to make their mark.
The ongoing pandemic and consequent lockdown will undoubtedly cost our economy dearly, but at the same time, it has presented to us new avenues of growth for the medium as well as long term. PM Modi in his speech gave us a glimpse of his vision for India in the coming years. Aatmanirbhar, as the name suggests, is not anti-globalisation. It is more about making India selfreliant and to make us wellprepared to take on global competition. It is also about engineering India’s socioeconomic transformation.
Quite a few Indian companies, namely TCS, Amul, M&M and Airtel have made a name for themselves since 1991 in Indian as well as global markets. Many giant non-Indian companies are headed by Indians too. So we can safely conclude that Indians lack neither entrepreneurial skills nor technical skills needed to run world-class companies. What we really lack is not-so-business-friendly government policies, outdated labour and land laws, and basic infrastructure like quality roads, airports and ports.
The first and most critical aspect is land. It is a tedious process to acquire land in India as outdated land laws make it almost impossible for companies to acquire land without facing litigation. The Modi government tried to answer this issue immediately when they came to power in 2014 by proposing to amend the Land Acquisition Act. But selective outrage from people with vested interests forced the government to scrap this vital reform. Now the government (including the states) must identify and develop large tracts of land and make it available to the interested companies or groups of companies with adequate infrastructure.
The second critical aspect is labour laws and other regulatory laws like environment clearances. We have such a variety of labour laws and regulatory laws that it leads to unlimited interference of government officials, paving the way for red-tapism. Easing this regulatory environment will ensure that we attract capital at the expense of our other South-East Asian competitors. States like Uttar Pradesh, Madhya Pradesh and Gujarat have already started this process as they have recently reformed their labour laws and other states must follow suit. Another interesting example is that of the Ministry of Road Transport & Highways led by Nitin Gadkari. This Union ministry has created a portal named “Bhoomi Rashi” to fast-track the land acquisition process (for themselves only). Other government departments of both the union and states should adopt this model.
The next critical aspect is logistics. We are decades behind other countries in logistics and supply chain management. See this statistic: Turnaround time at Indian ports (which are mostly owned by the government) is 60 hours, in Singapore it is 12 hours, China’s is 20 hours and South Korea’s is 12 hours. This statistic is enough to prove our efficiency levels. The key reason for this hindrance is that we lack enough quality ports and those we already own lack digitisation as there is too much paperwork involved. The government comes into the picture again as they have to start the automation process fast to avoid unnecessary delays. This example of ports is just one of the many problems we face in logistics, and supply chain management and policy overhaul are needed if we seriously want to attract investment.
To conclude, aatmanirbhar is not anti-globalisation. It is more about empowering Indian companies in such a way that they can compete in the global markets after gaining enough strength within India while providing a platform for foreign companies to establish themselves in India as to generate more employment opportunities for skilled Indian workers. It is about driving India’s socioeconomic transformation with smart policy and legal reforms.