Extempore Topic: Atmanirbhar Bharat – A Mission to make India Self Reliant

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Atmanirbhar Bharat – A Mission to make India Self Reliant
A country is said to be Atmanirbhar (Self-Reliant), if its produces sufficient amount of goods and services for its domestic needs along with surplus for export to earn foreign exchange, so that it can import the goods that it is unable to produce or can produce at much higher cost which may incur losses to it.

 

The countries with the availability of global trade facilities and faster means of transport, look at those countries wherefrom they can import quality product at a lesser cost and save precious foreign exchange, instead of setting up a costly manufacturing hub for their domestic needs. So, in this era of economic globalization with more interdependence among the countries and the facilities of digital marketing and communication available, it is difficult to think that any country can survive in isolation. 

 

Atmanirbhar (Self-Reliant) Country: Understand the Concept
In fact, an Atmanirbhar (Self Reliant) country need not necessarily manufacture each and every product required by it. On the other hand, it will prefer manufacturing and processing more such products which it can do with expertise at low cost and the demand of which is globally more. At the same time, it cannot indefinitely depend on such countries who are dumping their low quality goods and are destroying the industrial growth of the importing country.

 

The concept of deriving benefits of scale, availability of natural and skilled human resources, expertise in manufacturing & processing the products in home country, judging the domestic and global demand, always help the countries arriving at the decision – whether manufacturing the products is beneficial or the required items should be imported  while focusing on manufacturing and exporting the surplus items. 

 

Atmanirbhar Bharat: What does it mean for India?

  1. By becoming Atmanirbhar, India plans to revive its such small industries which used to contribute in high economic growth but are not functioning now as some of the countries like China have dumped their inferior products at low price in Indian market – a strategy which has made thousands of small scale and cottage industries go out of track. The income from agriculture, which is the back bone of India, also needs to be boosted, to keep India retain its rural India fibre and keep its economic growth wheels rolling at a faster pace.
  2. India has suffered a lot in this corona virus health hazard initially as it was taken aback due to the sudden spread of China originated virus. There was shortage of masks, gloves, sanitizers, PPE kits for the medical professionals who are the warriors to cure the infected people. No country could come to help in this global pandemic as all of them were suffering from similar problem. India, then stood up firmly on its feet and proved its mettle by providing medicines to USA and other countries which were suffering from the Covid-19 pandemic.
  3. India is facing the COVID-19 situation with a spirit of self-reliance. India has re-purposed various automobile sector industries to collaborate in the making of life-saving ventilators. From zero production of Personal Protection Equipment (PPE) before March 2020, India today has created a capacity of producing 2 lakh PPE kits daily, which is also growing steadily
  4. During the Covid-19 pandemic, India has demonstrated how it has risen up to challenges and unfolded the opportunities therein while playing the key role in the global fight against the China born virus. India’s leadership role has been recognized and appreciated widely across the Globe.
  5. The inspiring call given by the Prime Minister of India, Mr Narendra Modi to use these trying times to become AtmaNirbhar (self-reliant), offering Rs.20 lakh crore stimulus to revive Indian Economy, has been very well received to enable the resurgence of the Indian economy. India has started Unlock process with guidelines to resume the economic activities while maintaining preventive measures to allow graded easing of restrictions. Atmanirbhar Bharat has many facets to march on the path of not only economic development but also in infrastructure, defense and technological growth.

How India Achieves Self-Reliance in Any Situation? Examples

  • An example of India marching on the path of self-reliance in any given situation is the PPE industry growth in two months. The PPE industry in India has become a ₹7,000 crore (US$980 million) in just two months from March to May 2020, the second largest after China.
  • The largest fund in the country worth ₹21,000 crore (US$2.9 billion) was setup by the IIT Alumni Council with the aim of supporting  the Atmanirbhar Bharat mission.

The Atmanirbhar Bharat Mission? Pillars and Goals
Atmanirbhar Bharat (self-reliant India) is the vision of the Prime Minister of India Shri Narendra Modi who has a big plan to make India a self-reliant nation.

  • Beginning with the well chalked out strategy, he started  with the  ‘Atmanirbhar  Bharat Abhiyan' or 'Self-Reliant India Mission' during the announcement of the coronavirus pandemic related economic package on 12 May 2020
  • Many government decisions have taken place such as changing the definition of MSMEs, boosting scope for private participation in numerous sectors, increasing FDI in the defence sector as part of the Atmanirbhar Bharat package
  • Many sectors such as the solar manufacturers sector;  growth of India's personal protective equipment (PPE) sector from zero to 2 lakh pieces a day are the fine examples of Atmanirbhar Bharat (Self-Reliant India)

5 Pillars of Atmanirbhar Bharat
India has 5 Pillars to Focus Upon to achieve the Atmanirbhar Bharat mission and plans to focus on each of them:

  1. Growth of Economy
  2. Infrastructure Development
  3. System
  4. Vibrant Demography
  5. Demand Increase

Plan to achieve the goal of Atmanirbhar Bharat? 5 Phase Strategy
India proposes to build a self reliant India in the five phases as below

  • Phase-I: Growth of Businesses including MSMEs
  • Phase-II: Well Being of Poor, including migrants and farmers
  • Phase-III: Agriculture Growth
  • Phase-IV: New Horizons of Growth
  • Phase-V: Government Reforms and Enablers​

Rs. 20 Lakh Crore Package Released to Revive & Make India Self Reliant
Moving with the plan to revive Indian Economy and make India Self-Reliant, the Prime Minister of India announced mega fiscal package of Rs. 20 lakh crore – equivalent to 10% of India’s GDP. The amount is meant to help MSME, Agriculture, Poor and was scheduled to be disbursed in five tranches.  India so far has had the harshest lockdown in the world accompanied by the most measly fiscal support to vulnerable sections of the economy. The magnitude of the package reflects a desire to compensate for the plight of migrant workers and their families; MSME, Agriculture and other key sectors which are the pillars of Atmanirbhar Bharat mission. The United States have put together a rescue package of about 13% of GDP.

 

Stimulus package in 5 Tranches for Atmanirbhar Bharat
The states were allowed  to increase their borrowing limit unconditionally by 0.5% of their Gross State Domestic Product (GSDP) or Rs 1.07 lakh crore. The complete package of Rs.20 lakh crore was supposed to be disbursed in five tranches and the fifth and final tranche of Rs. 40,000 crore has already been disbursed. 

 

Tranche-wise Distribution
The bifurcation of disbursal of the package in five parts is as under:

 

Overall Stimulus provided by Atmanirbhar Bharat Package

SN
ITEM
 
(Rs. Cr.)
1.
Part 1
 
5,94,550
2.
Part 2
 
3,10,000
3.
Part 3
 
1,50,000
4.
Part 4 and 5
 
48,100
 
 
Sub-Total
11,02,650
5.
Earlier Measures incl PMGKP
 
1,92,800
6.
RBI Measures (Actual)
 
8,01,603
 
 
Sub Total
9,94,403
 
 
GRAND TOTAL
20,97,053

Source:  Financial Express

 

A part of the Centre’s fiscal relief – Rs 40,000 crore or 0.2 per cent of GDP – has come as additional allocation to MGNREGA over and above the Budget Estimate of Rs 61,500 crore in the fifth and final tranche of the Atmanirbhar package announced by Finance Minister Nirmala Sitharaman.

 

While announcing the final tranche of Covid economic package, the Finance Minister Sitharaman said, “Rs 16,394 crore has reached 8.19 crore farmers. Twenty crore women were benefited after Rs 10,025 crore were deposited in their accounts. The building and construction workers also received their financial support due to Direct Benefit Transfer. We immediately responded to cash transfers and provided cooking gas to those in need.”  

 

Breakdown of the Rs 20 lakh crore package under the Atmanirbhar Bharat Abhiyan Announcement: May 12, 2020
Prime Minister Narendra Modi announces Rs 20 lakh crore Atmanirbhar Bharat package. Size of the economic package is 10% of GDP

 

Tranche-1: May 13, 2020 - Reviving MSMEs for Economic Growth
Finance Minister Nirmala Sitharaman presents Tranche 1 of Atmanirbhar Bharat package.

 

Size of the package: Rs 5.94 lakh crore (2.97% of GDP)

 

Includes:

  • Collateral free automatic loans to MSMEs, Govt to give 100% credit guarantee cover to banks and NBFCs on principal and interest: Rs 3 lakh crore
  • Subordinate Debt to provide equity support to stressed MSMEs, of which govt support to CGTMSE limited to Rs 4,000 crore: Rs 20,000 crore
  • Equity infusion for MSMEs through Fund of Funds, Mother Fund and few Daughter Funds to operate it, govt contribution to be Rs 10,000 crore to FoF: Rs 50,000 crore
  • EPF support for business and workers for 3 months: Rs 2,500 crore
  • EPF contribution reduced for business and workers for 3 months: Rs 6,750 crore
  • Special liquidity scheme for NBFCs/ HFCs/ MFIs, securities issued by them fully guaranteed by govt: Rs 30,000 crore
  • Partial Credit Guarantee Scheme 2.0 for NBFCs, first 20% loss borne by govt: Rs 45,000 crore
  • Liquidity by REC and PFC for Power Distribution Companies (Discoms): Rs 90,000 crore
  • 25% reduction in TDS/ TCS rate: Rs 50,000 crore

Tranche-2: May 14, 2020 - Support to Agriculture, Migrant Workers, Poors, 
Finance Minister Nirmala Sitharaman announced Tranche 2 of the Atmanirbhar package.

 

Size of the package: Rs 3.10 lakh crore (1.55% of GDP)

 

Includes

  • Free food grain supply to migrants for two months: Rs 3,500 crore
  • Interest subvention of 2% for prompt-payees of Mudra-Shishu loans: Rs 1,500 crore
  • Special liquidity scheme to provide Rs 10,000 working capital to 50 lakh street vendors: Rs 5,000 crore
  • Credit-linked subsidy scheme for middle income families (Rs 6-18 lakh a year), with expectations it will lead to Rs 70,000 crore investment in housing industry
  • CAMPA funds to be used by states for afforestation and plantation works: Rs 6,000 crore
  • Additional emergency working capital funding for farmers through Nabard: Rs 30,000 crore
  • Concessional credit to 2.5 crore farmers through Kisan Credit Cards: Rs 2 lakh crore

Tranche-3: May 15, 2020 - Support to Food & Agriculture, Infrastructure
Finance Minister Nirmala Sitharaman announced Tranche 3 of Atmanirbhar package:

 

Size of the package: Rs 1.5 lakh crore (0.75% of GDP)

 

Includes

  • Financing facility for agri infrastructure projects: Rs 1,00,000 crore
  • Scheme for formalisation of Micro Food Enterprises: Rs 10,000 crore
  • Funding for fishermen through PM MatsyaSampadaYojana: Rs 20,000 crore
  • Animal Husbandry Infrastructure Development Fund to be set up: Rs 15,000 crore
  • Promotion of Herbal Cultivation: Rs 4,000 crore
  • Beekeeping initiatives: Rs 500 crore
  • Operation Green to be extended to all vegetables: Rs 500 crore
  • Policy reforms: Essential Commodities Act to be amended, agriculture marketing to be freed up

Tranche-4: May 16, 2020 - Viability Gap Funding (VGF) for social infrastructure projects
Finance Minister Nirmala Sitharaman announced Tranche 4 of Atmanirbhar package.

 

Size of the package: Rs 8,100 crore (0.04% of GDP)

 

Includes

  • Commercial coal mining; coal gasification projects; building a hub for aircraft maintenance, repair and overhaul (MRO); privatisation of airports, and optimisation of Indian airspace.
  • The viability gap funding (VGF) was announced for social infrastructure with an aim to boost private investment – similar measures were outlined in this year’s Budget.
  • 3,376 industrial parks/estates/SEZs in 5 lakh hectares have been mapped on IIS

Tranche-5: May 17, 2020 - Strengthening Public Sector
Finance Minister Nirmala Sitharaman announced Tranche 5 of Atmanirbhar package.

  • New policy for public sector enterprises, strategic sectors to be notified in which there will be at least one, but not more than four, PSEs in addition to private players.
  • Limit of state borrowings increased to 5% of GSDP from 3% of GSDP; but only 0.5% of it (Rs 1.07 lakh crore) can be raised conditionally
  • MGNREGA gets an additional Rs 40,000 crore

Atmanirbhar Bharat: Key Benefits and Achievements

  • Rs 16,394 crore has reached 8.19 crore farmers. Twenty crore women were benefited after Rs 10,025 crore were deposited in their accounts
  • Pradhan Mantri Garib Kalyan package used technology to do direct benefit transfer to people.  One-time transfer of Rs 2,000 has reached 8.19 crore farmers, total amount Rs 16,394 crore. NSAP beneficiaries got Rs 1,405 crore in first installment & Rs 1,402 crore in second instalment, target of Rs 3,000 crore nearly achieved
  • 20 crore Jan Dhan account holding women got Rs 10,025 crores. 2.2 crore building and construction workers got Rs 3,950 crores. 6.81 crore people got free LPG cylinders
  • 12 lakh EPFO holders got online withdrawal of advance
  • Govt has taken a number of health-related steps for COVID19 containment Rs 15,000 crore announced for states, essential items and testing labs and kits alongwith rolling out of teleconsultation services,launch of Arogya Setu app&protection to health care workers with adequate PPEs
  • Swayam Prabha DTH channels launched to support and reach those who do not have access to the internet; now 12 channels to be added
  • More than Rs 4,113 crores have been released to states. Insurance cover of Rs 50 lakhs per person has been announced for healthcare workers and Epidemic Diseases Act was amended for protection of healthcare workers
  • Additional Rs 40,000 crore allocated for MGNREGA
  • Diksha: one nation one digital platform will be launched for e-education. Online content for students with disablities
  • One class, one channel will also be launched. Radio content focused on education
  • Top 100 universities can automatically start online courses
  • Special insolvency framework for MSMEs will be announced. Threshold now Rs 1 crore

Atmanirbhar Bharat: Not a Protectionist Policy - Clarifies Government…
The Global dependence of countries on one another for their economic requirements and for sectoral economic growth is well known. But According to the Government, the basic definition that Atmanirbhar Bharat would not need anything from other countries in any sector does not apply in the concept of Self Reliant India. So, the Atmanirbhar Bharat policy does not aim to be protectionist in nature.

 

The Finance Minister of India Nirmala Sitharaman has clarified, "self-reliant India does not mean cutting off from rest of the world". The law and IT minister, Ravi Shankar Prasad, said that self-reliance does "not mean isolating away from the world. Foreign direct investment is welcome, technology is welcome.”

 

Many reforms as part of the government's stimulus package have been announced as the structural reforms, industrial and Agricultural reforms to make India self-reliant in this Global competition:

 

Self Reliance in Industry & Aviation

  1. Commercial mining of coal by the private sector. 50 blocks will be offered for bidding, on the basis of a revenue-sharing model, and the government will invest Rs. 50,000 crore to build evacuation infrastructure.
  2. Enhanced private investment in the mineral sector. 500 blocks will be auctioned in a composite exploration-cum-mining-cum production regime. Besides, distinction between captive and non- captive mines to be removed for better redistribution of surplus materials.
  3. Hike in FDI in Defence manufacturing from 49% to 74%.
  4. Easing of restrictions on Indian air space, benefitting civil aviation, and reducing flying costs.
  5. Privatisation of electricity distribution companies in Union Territories to begin with, to be extended to states later.
  6. Boosting private participation in space activities. Private sector can use ISRO facilities.
  7. Research reactors in atomic energy in public-private (sector) partnership (PPP) model.
  8. Viability gap funding for social infrastructure projects. ​

Self Reliance in Agriculture
With respect to agriculture, several measures to address some agricultural structural issues have been announced. These are:-

  1. Agri-marketing reforms, including a new central law to bypass Mandis and APMC reforms framework for e-trading.
  2. Revamp essential commodities act and deregulate oil, pulses, onion, potato, etc.
  3. Rs 1 lakh crore investment in farm gate infrastructure and logistics.

Disinvestment: Self Reliance in Deliverance
To kickstart the economy, the government needs to spend and make huge Investments in Infrastructure. The private sector will follow only after the government moves forward. Aggressive and serious disinvestment can generate revenue to fund government spending.

 

Since it is none of the business of government to be in business and hence should exit it, and the disinvestment target should be non-negotiable. In the absence of tax buoyancy and little space for borrowing as fiscal space is already stretched, disinvestment in all possible ways is the only way.

 

Atmanirbhar Bharat: More to be done

 

Indian Industry dependant on Imports from China & other countries
Experts feel that the calls for India to boycott Chinese products, and promote an Atmanirbhar Bharat instead, are practically difficult in the short term for India because India imports $75 billion worth of goods every year from China. Many parts of Indian industry are dependent on China.

 

Although, following the Galwan Valley skirmish on 15 June 2020 in which 20 Indian soldiers died, Swadeshi Jagran Manch said that if the government was serious about making India self-reliant, Chinese companies should not be given projects such as the Delhi-Meerut RRTS, however it remains to be seen how proactive India could be on its decision with good alternatives.

 

Revival of Demand: Very Important
Loans, liquidity and credit guarantees are useful, but will they be enough to lift the Indian economy out of this crisis? Or do they simply push government spending down the road, forcing the state to pick up the pieces if a lack of demand ends up pushing individuals and firms into insolvency?

 

Strengthen Existing Manufacturing & Defense Sector 
India had enacted policies and built companies since its creation to make India self-reliant - SAIL for steel production, IITs for domestic engineers, AIIMS for medical science, DRDO for defense research, HAL for aviation, ISRO for space, CCL NTPC and GAIL in the area of energy and many more. All of such Government and public sector companies need to be further strengthened. 

 

More Things to be Done to become Atmanirbhar

  • At the present juncture, when we need both growth and jobs, there can be no second thought on ushering in nothing short of an industrial revolution.
  • A well thought industrial policy can change the ecosystem which can transform India into a global manufacturing hub with competitive pricing, innovation, and make the country an attractive investment destination.
  • With US-China Trade war, there is a great opportunity to attract investment in the region. We must not miss the bus now as it is now or never.
  • Looking at Agriculture sector, the agrarian distress is palpable in rising farmer suicides. Many farmers still have to depend on money lenders and the informal sector.  It is time to review the agrarian problems and possible solutions in a holistic manner.
  • The immediate goal is to double farmers' income, which can only be possible by increasing production and productivity.
  • Issues pertaining to marginalised sections such as landless labour and share croppers/tenants need to be studied in depth.
  • A few areas that need immediate attention are--land reforms, consolidation of fragmented holdings, clarity on titles, ownership, and possession of land resources and digitalisation.

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