Why India must adopt its own development model post Covid-19
All big economies of the world are suffering from Covid-19, as these countries have imposed lockdown to prevent spread of this virus, which first emerged in China . This virus has harmed more to western countries who were thought to have the most modern health care system than developing nations. It is worth mentioning that owing to its business interest, China lied to the world about this virus unless it spread across the globe. And despite being the first country infected of this virus, China has started its production chain, whereas the world economy has fallen. It shows the Chinese mindset of having monopoly over the supply chain.
Having said that, Covid-19 has categorically pointed out that pre-Covid 19 world was largely dependent on two countries– US and China. But post Covid-19 world will not be the same again. Now rivalry between western countries and China will increase. And western countries would now suggest their companies to come out of China and invest somewhere else. As a result of this, India will be the first country which will be the beneficiary of this rivalry. The positive thing about India is that it is a democratic nation where business works on ethics and legality. On the contrary, in China, business largely works on concept of ‘Guanxi’ which is also said to be a source of corruption. It is worth mentioning that even before this pandemic hundreds of companies were planning to shift their manufacturing base from China to India. Countries like Japan and South Korea, which are facing the aging workforce, are already investing in India’s SMEs. This is also true India strategically matters for them to counter the dominance of Chinese monopoly over the world market. So it is probably clear that post Covid-19 situation will be more in India’s favor and world order will not be the same again. World cannot afford to depend on two countries only. Here, India will have an opportunity to play a leading role in world’s economy and also in security as 80 per cent of world’s maritime oil trade flows through Indian Ocean.
Now coming to the point, Covid-19 has also harmed India economically. This pandemic has forced India to think on some serious issues. India shares 18 per cent (135 crore) of world’s population which is almost double to the population of Europe. When it comes to economy, India’s share in world’s economy is almost 3.5 per cent. Therefore, it is high time for India to adopt its own model of development. Indigenous model of development is the only solution. India has limited resources and it has to distribute them into almost one and half billion of people. It is indeed a gigantic task. India will have to invest a lot in R&D, Research and Development. With the help of local research, India can produce low cost products which would be sustainable for every Indian. Importing foreign technology is good. However, this is also true that the production of goods with help of these technologies increase the cost of product. India can learn a lot from China in this regard. Due to local R&D, production cost of Chinese goods are so low that Indian companies in India are not able to compete with Chinese products despite manufacturing locally. Of course, it’s true that Chinese products are not so qualitatively comparable to that of Japanese, Korean or Taiwanese. The recent example of failure of Chinese Covid-19 test kits clearly points out that China is in a haste to dump its products to capture the world market.
Geographically, India is not like other countries. In other developed nations, quality of life of the people are same. So, the governments of these countries easily identify and fix the problem. In India, every state has its own distinct quality. Therefore, Government should bring Industrialization policy for every state. Every state should be asked to manufacture some specific products. Agro-processing will play a vital role in the growth of rural India.
The second most important thing is that India’s economic development should be on the basis of India’s local tradition. For, the quality of life of a large section of Indians is based on their local culture and beliefs, which play an important role in their survival. Even different festivals in India have their role in India’s economy. In this way of India’s development, MSMEs will contribute a lot. Even a district should have its own model of development.
The fact emerges that even being little dependent on other countries is not helpful for India. India’s economy can never be equal to US or other countries. For instance, even if we want to give US like quality of life to our people, our economy should be at least $60 trillion at present, which is a difficult task for any government to do. Therefore, only ‘local technology and local production’ with indigenous model of development is the path to self-reliance. It will also help in reducing the gap between the rich and the poor in the country.
By Ravi Mishra