The Prime Minister’s goal of a self-reliant India is not about returning to “Nehruvian import substitution or autarkic isolationism,” Sanjeev Sanyal, Principal Economic Adviser, Government of India said.
Prime Minister Narendra Modi has in recent weeks has emphasised on the idea of an ‘Atmanirbhar Bharat’ or a self-reliant India. However, the government has faced a volley of questions since then, about whether the aim is to drag India back to import substitution and isolationism? The Prime Minister’s goal of a self-reliant India is not about returning to “Nehruvian import substitution or autarkic isolationism,” Sanjeev Sanyal, Principal Economic Adviser, Government of India, wrote in The Indian Express. Sanjeev Sanyal clarified that the Prime Minister has emphasised that his vision includes active participation in post-COVID global supply chains as well as the need to attract foreign direct investment.
The aim to make Indian self-reliant was outlined by the Prime Minister while announcing that his government will help the Indian economy get back on its feet with a Rs 20 lakh crore economic package. Sanjeev Sanyal added that the march towards a self-reliant India should not be taken as a return to the licence-permit raj and inspector raj of the socialist era. “Far from suggesting a centralised, top-down model directed from the “commanding heights” of the Planning Commission, the prime minister spoke of freeing Indian entrepreneurship and innovation from bureaucratic hurdles. This is about decentralised localism that takes pride in local brands, emphasises resilience and flexibility, and encourages local capacity-building and indigenisation,” he wrote.
Terming the recently announced liberalisation of the agriculture sector as a “good illustration of this world view and its economic implications”, Sanyal called the Essential Commodities Act (ECA) and the state-level Agricultural Produce Marketing Committee (APMC) Acts, draconian. The two acts were recently changed by the central government, giving farmers much-needed freedom. Under the two acts, government officials were given the powers to tell farmers where to sell their produce, restrict transportation, fix prices, and confiscate stocks. “The scrapping of the ECA-APMC system enables localised decision-making by farmers even as they can participate in a national common market or export to the global market. Similarly, traders can now invest in supply-chains and agri-businesses without the fear of being arbitrarily labeled a hoarder by an inspector,” Sanyal opined.
“Self-reliance implies that product and factor markets are made flexible in order to allow the Indian economy to adapt to the problems and opportunities of an emerging post-COVID world,” the Principal Economic Advisor wrote. He added that the government has an unapologetic commitment to privatisation of non-strategic public sector entities, opening up of new sectors like space to private investment, decriminalisation of most aspects of corporate law, all to make Indian economy to adapt to the problems and opportunities of an emerging post-COVID world.
“As argued repeatedly in recent Economic Surveys, the inefficiencies and delays of the legal system are now the single biggest hurdle to economic development,” Sanjeev Sanyal wrote while highlighting that law has been mentioned as one of the pillars of his vision by the Prime Minister. “So where does this approach lead? A decentralised system, where economic entities are expected to be self-reliant, requires a generalised system of social trust and the ability to enforce contracts. In turn, it implies a need to carry out administrative reforms and, more specifically, reform of the legal system,” Sanjeev Sanyal wrote.