Modi's 'Atmanirbhar Bharat Abhiyan': Will It Make India Self Reliant? - Voofacts

But It's nothing new...

The concept of Atma Nirbhar Bharat is the same as Swadeshi which Indian leaders were seeking even before Independence.

Gandhi’s charkha was a symbol of the Swadeshi movement in pre-independent India.

Post-Independence India still followed the policy of self-reliance for the first four decades since its Independence and which led to the economic crisis in 1991.

India could avert the crisis only because it changed its path and followed the policy of LPG (Liberalization, Privatization, and Globalization).

" Atma Nirbhar Bharat Abhiyan will not revive the Indian Economy!" As our PM claims.

Before understanding Self Reliant India and Atmanirbar Bharat Abhiyan, We need to look into the structure of the Indian Economy.

India is a country with 93% of the total workforce in the Informal sector. In other words, these people are working in an Unorganized Sector. So it's important to create a stable informal sector for creating a more Vibrant Economy. 

However, this informal sector always lacks financial access and people are always exploited by individual money Lenders without having banks and ATMs available, especially in rural areas. 

So it becomes a fundamental duty of today's government to provide more policies of financial inclusion like Pradhan Mantri Jan Dhan Yojana before implementing a package of 20 Lakh crore through monetary measures.

What is Atmanirbhar Bharat Abhiyan?

The economic crisis triggered by the coronavirus pandemic in 2020 gave birth to the Atmanirbhar Bharat Abhiyan amounting to 20 Lakh crores to act as a relief package for the entire nation.

This package is so huge that it Sums up to around 10.3% of India's total GDP.

Among the 20 lakh crores announced by the Prime minister, only 1.5 Lakh crores are provided as a financial relief to the people which in turn means all the other remaining money comes as Monetary measures from RBI and banks which provide loans to people and used to inject liquidity in the economy.

Poorest of the poor suffer the most!

However, the poorest of the poor are the real sufferers since they don't have any financial access to avail these facilities. Landless laborers, Daily wage workers, Migrant laborers are the ones who actually need money to feed themselves. 

Availability of bank service in India Since money is not reaching these poorer strata of people. This clearly shows that the transmission of monetary policy in India is very ineffective. 

India's monetary policy is so poor to such an extent that banks refuse to provide proper loans to the farmers but provide loans to corporates at favorable interest rates. 

With these statistics in mind, the Government must have opted for more fiscal and administrative measures to satisfy these people but still the government led by Narendra Modi and Finance Minister Nirmala Sitharaman have opted for excess monetary measures in the relief package.

What is in the policy Maker's mind?

Policymakers must have thought that these loans will create artificial demand in the market.

This may lead to setting up of more factories or prevent the shutting down of existing factories and create employment so that the Economy can be sustained without excess dependency on imports.

Problems with Atmanirbhar Bharat Abhiyan

With the excess migration of the workforce, it's more unlikely that people will come back to urban areas immediately after the pandemic.

Remember even well-intended and planned policies have failed to do any good in the past because of the structural problems and ineffective transmission of monetary policies.

If this doesn't go as the way it should or if the transmission breaks in between as other variables like the behavior of Bankers and Customers which were not taken into account, then 75% of Atmanirbar Bharat Abhiyan will turn out to be ineffective and it will fail to accelerate the growth which defeats the ultimate purpose of self-reliance.

Things to be done to prevent contraction of the Economy:

• Increasing Public expenditure from the Government side through more Administrative And Fiscal measures.

• More Rural Projects like NREGA and Rural Infrastructure Development.

• This will provide opportunities and employment to migrants who have migrated to their native places.

• Keeping indirect tax rates to a Moderate level (Remember, Higher tax rates leads to too much evasion of taxes).

• Incentivizing Public and Private sectors - not by providing loans but by giving them subsidies.

• Subsidizing the domestic industries will make domestic goods more competitive and attractive in international markets.

Summary

Our government at the center is more fond of new terminology and acronyms than getting a job done.

This Atma Nirbhar stuff is no different from the erstwhile Make in India slogan Modi coined six years ago.

Once again the Modi government came up with a beautifully worded scheme that causes more headaches and problems than the solution it claims to provide in the "long term".

Only slogans or lectures won't help without concrete steps.





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