Economists are skeptical about PM Modi’s push for a ‘self-reliant India’

Prime Minister Narendra Modi
Prime Minister Narendra Modi

By Abdul Bari Masoud

New Delhi:  In the wake of Chinese transgression, the Modi Government banned 59 Chinese mobile applications while the Prime Minister, Minister Narendra reiterated  the call of making “atmanirbhar Bharat” or  India self- reliant.  The PM on May 12 had first asked the countrymen to “go vocal for local” and announced an economic package of Rs 21 lakh crores to make the country self-reliant. However, analysts and economists took these announcements and measures with a pinch of salt.  They are of the view that banning of apps fell way short of making any dent on the Chinese economy. They also of the firm view that India is heavily dependent on import in each sector, therefore, slogan like “atmanirbhar Bharat” lacks   substance.

Before the violent clashes broke out with China in Ladakh in which 20 Indian soldiers were killed, the PM had exhorted the people that the coronavirus outbreak should be used an opportunity to create an “atmanirbhar Bharat” or self-sustaining India.

Muslim Mirror talked to some noted economists on the issue who  said it is a commendable idea but in the given state of affairs, the goal of self reliant is distant dream.

Renowned economist Dr Abusaleh Shariff, Executive Director, US-India Policy Institute, Washington, opines that he does not  find any great spectacle when the PM said to become self reliant as it is  a good ordinary suggestion.

Dr Shariff, who was chief economist of National Council of Applied Economic Research, said the concept of self reliance in our blood since independence and Gandhi called for self-reliance.

Around the 1990s India became open and part of a globalized world so since globalization took place our GDP has increased tremendously so we have in that sense we have reaped the benefits of globalization, he added.

Even before the COVID situation, India was already getting into a recession mode and the economy may grow to 5% or 4.5%, he underlined and added that   lockdown brought almost all economic activities to standstill even in the relaxation in lockdown we are unable to recover so given this tough kind of situation and the government has given that capital support for various types of people they call it 21 lakh crore so it is just a number to me but the point the PM is making is that these are the tough days and now we have to become self reliant.

In response to another question, Dr Shariff said India cannot become self reliant.

“Can we become self reliant and recover, in my judgment NO.”  He  pointed out that just the  last week India achieved the highest amount of FDI that India has ever achieved which is half a trillion dollars.

“Now what does this say now on the one side the PM says we want self-reliant but on the other we see the indication that a lot of foreigners and a lot of outsiders are investing in India”.

Why foreign investors are coming to India? He said because in India their money recovery will be faster than the recovery in Japan, Europe and other developed nations.

He said there is a dualism in the policy approach of the PM on the one side he advocates for self reliance on the other the economic stats suggests not self reliance.

“So there is a dualism in the policy approach of our PM on the one side they suggest that self reliance on the other our economic stats suggests not self reliance, there is a huge amount of invest coming from outside and ultimately the money comes to India because they feel they can create a value out of it and take the profit out of India.”

He said getting huge investments from outsiders is a bad idea and India cannot become self reliance.

“The FDI looks good everybody wants FDI but actually as an economist who also believes in self reliance it is a bad idea to get huge investments from outsiders because ultimately the outsiders will take the money out they will take their profit out of India from 5 years from now 10 years from now depending on how much money is given. In that sense India cannot be self-reliant.”

He  further highlighted that  India is totally dependent on imports of intermediary items and  intermediary items are those kinds of technologies which you bring from somewhere else because you can’t manufacture them you don’t have technology you buy them from other countries so that your machines your company you’re railways your lathe machines can function.

We import these kinds of machinery a lot from China. In fact India ‘s reconstruction post COVID era cannot take place without the support or without the help of technological stuff from China.

In the current stand-off with China, Dr Shariff,, said India should resolve that issue with diplomatic efforts as the USA is not a reliable friend.

India China bahi bhai must prevail, this is very relevant today and PM  Modi has to use diplomacy and reduce the tensions  from the LAC   and not to rely  on the USA because nobody can trust  the USA in the long  term.

However, Prof Amir Ullah Khan has a different take on this who teaches Economics at the MCRHRDI of the Government of Telangana. , According to him  “Self reliance does not mean that we produce everything ourselves. It means that we are able to pay for everything that we would like to consume. It is inefficient to produce everything yourself.

The terms of trade are important. To work towards a healthy trade surplus, India must aim for positive terms of trade which will mean that our exports fetch us higher returns and import prices go down.

Any country that tries to make everything within its borders becomes inefficient and goods and services become expensive.”

While Former Science and technology and Education Minister Kapil Sibal dubs the PM’s call as just another slogan. He said “It is just a slogan as all the government policies today are benefitting international players. That’s the only thing we ‘Make in India’, slogans, every few months, there are new slogans, which is ‘Made in India’ here we are master’s of that.

What self-reliance are you talking about? What kind of Jumla is this for the people of the country?

Before March24, there was much talk about 2 G in the health sector, namely Gomutra and Gobar. What kind of scientific thought is this? Is this how we are going to make ourselves self-reliant?”


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