Monday, 10 August 2020

Self-Reliance Movement A Masterstroke

By Dr. Alok Chakrawal
Updated: May 20, 2020 10:30 am

Almost a century ago British economist John Maynard Keynes advised the Queen of United Kingdom to increase demand for boosting the economy. It was to tackle ‘the Great Depression of Thirties’ adverse economic impact on Britain and its ruled countries. Keynes challenged the ideas of Neoclassical Economics and said ‘Free Market’ will not provide full employment in short and medium terms. Hence, he was of the opinion that an absolute free market economy is not possible for desired growth and development of a nation. Keynesian concept was mainly based on demand theory but yes it has its absolute effectiveness in the prevalent economic conditions.

Let us examine this Keynesian concept in the Indian perspective keeping in view the recent announcement by the Prime Minister Namenda Modi. Prime Minister has mentioned about five important pillars of Self-Reliant economy i.e. Economy, Infrastructure, System, Vibrant Demography and Demand. Interestingly demand is mentioned here in the last but let us understand that by and large these all five important elements of Self Reliant economy are closely interconnected. After a century of ‘The General Theory of Employment, Interest and Money’, India has rediscovered it by enhancing the ‘demand’ form local to global canvas. Moreover, it is not only limited to ‘demand’ but it has a broader spectrum consisting of effective system, qualified and enthusiastic workforce, complete set of infrastructure to support the developmental activities, and above and all much needed working capital in the form of huge liquidity.

Vibrant Demography has a special reference here in the present context. It indicates the foundation of pluralism for a sustainable economic growth and development. We need all caste, creed, community, colour and core values to support the economic activities of the nation. All sections of the society has to contribute to the cause of national economic development.

Self-Reliant Movement caught the attention of public when Prime Minister made an address to the nation during COVID – 19 pandemic era. But it is interesting to learn that this movement was the basic agenda of the National Democratic Alliance (NDA) Government from the very beginning. The ‘NDA Government – I’ had launched ‘Make In India’ movement (Swadeshi movement) just within six months period of its government formation i.e. on November 24, 2014.

There is a big misconception that Self Reliant means throwing foreign companies out of India; whereas the basic underlying idea is something different. The intentions of the Government is that India should produce everything of its need and requirement within the country with as much as possible local resources. Moreover, India is interested to help the rest of the world by supplying goods and services produced in India. There is no harm in inviting foreign investment and companies to India. The condition is only that they should manufacture their products and services in India only instead of importing from foreign countries.

The Swadeshi movement – ‘Make In India’ initiated in 2014 has motivated many multinational corporations to start production of their products and services in Indian workshops and offices. To name a few are Ford, Good Year, Cisco, Coca Cola, American Express, Honda, Toyota, Mitsubishi, Yamaha, Suzuki, Nissan, TAQA, EMAAR, BMW, Volkswagen, Bayer, SAP, Merck, Daimler, Rafael, Renault, Cap Gemini, and many more. The biggest partner of India in this Swadeshi movement are USA, UAE, Japan, Germany and France.

CORONA – 19 pandemic has proved China’s doubtful intensions. It is a matter of fact that China is interested in only their own economy at the cost of the world economy. China has lost its credentials as an economic partner of MNCs and countries. India is a superior option over China. India is a democratic country but not in autocracy as the China is. The latest reaffirmation of the Government of India of Self Reliant Economy is a golden opportunity for domestic industries and states to explore options of global collaborations. Some of the Indian states like Gujarat and Maharashtra have already started following prospective MNCs to settle down in their state.

More than 1000 multinational corporations and at least 300 Fortune 500 companies are having keen interest to relocate from China. In the given economic and political scenario India is the most suitable country for these MNCs to settle down. The booster dose of economic stimulus is certainly going to help the nation in fruitful results in this direction.

By pumping up Rs. 20 lakh crores in the economy, the Modi Government has earned an advantage over China and other likely global investment destinations. This is a huge amount infused in the economy unmatchable anywhere in the world as it admeasures about ten percent of the total Indian GDP. China has announced stimulus package of only 3.8% of its GDP to combat COVID – 19 effects. Even developed countries are behind India is combating Corona impact over economy e.g. France, Spain, Italy and United Kingdom have declared stimulus package of 9.3%, 7.3%, 5.7% and 5% of their respective GDP. However, some international economists have a higher estimates of financial packages announced by Japan, USA, Sweden and Germany. Nevertheless, if we look on the purchasing power of Indian currency, team Namenda Modi is far ahead of all developed economies.

Economic measures triggered off by the Government of India is going to enhance individual as well as corporate liquidity. Money in hand is the greatest booster of demand in any market. Cyclical impact will increase production activities, employment, and vibrancy in the economy.

But we need to make our system fool proof and robust. Unfortunately, we are yet to make our system reliable, efficient and effective. We are still entangled in a complicated bureaucratic systems where smallest of the affairs are addressed after herculean efforts. As matter of fact 56 MNCs shifted out from China and only three of them could be settled in India. We need to learn lesson from this incident.

The MANTRA of Self Reliance is indeed excellent but at the same time we must put our best possible efforts to make it a grand success. Any economy is a great economy because of its committed citizens. We Indians have to be Indian by showing our solidarity by preferring products manufactured in India. Let me make it clear once again that Swadeshi does not mean boycotting MNC products but it’s true meaning is that we have to self-reliant in terms of producing all our needs.

 

By Dr. Alok Chakrawal

(The author is Professor at Saurshtra University, Gujarat)

 

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