The world is in panic due to coronavirus pandemic. The virus and the measures taken to contain it are hitting us in many ways. Global supply chains are badly affected due to restrictions on movement. Caught off guard by the crisis, people want to take no chance and want to do everything they can to safeguard themselves from any such crisis in the future. But in this desperation and fear we must see to it that we are not playing into the hands of forces which are searching for opportunities in crisis to push forward their highly flawed ideas.
In one of his addresses to the nation Prime Minister Narendra Modi gave a call for Atmanirbhar Bharat (self reliant India), which means that Indians should buy products made in India and use services of Indian companies. People should also be vocal about using local, he appealed. This way, Mr. Modi said, global brands will emerge from India.
The idea of using “swadeshi” is not new. It did not surface after the pandemic struck. It has been around since early 20th century. The insistence on using swadeshi and boycotting foreign goods was justified when we were under British rule. We were not free to choose with which country we want to trade. The trade was not necessarily for the benefits of Indian people. But when we became independent, we could choose our trading partners, and trade with them on equal terms. The idea of swadeshi became irrelevant especially after India adopted new economic policy of Liberalisation, Privatisation, Globalisation in 1991. However, some radical forces, who were, in the words of former U.S. President Bill Clinton, on the ‘wrong side of history’, kept hugging the idea of swadeshi. In recent years, these forces have come to power and have been imposing their outdated ideas on people through coercion. Coronavirus pandemic has given them the opportunity to exploit people’s fear and push for the highly flawed idea of “be Indian, buy Indian”.
Before coming to the flaws of the idea, let us consider the reasoning behind the self reliant India mission. Apart from reducing India’s dependence on other countries, it is claimed that the mission will provide opportunities for Indian businesses. However, is setting up a new business, putting ideas in practice easy in India? The answer is simply no. Besides the challenges businesses generally face, there are India specific challenges.
A lot has been said about hurdles posed by bureaucracy. I will just share two data points which appeared in Bangalore Mirror. According to an estimate of National Restaurants Association of India (NRAI), if you are in Bangalore and if you want to open a restaurant, you will require a total of 36 approvals. In Delhi the number of approvals is 26, and in Mumbai it is 22. Of late, people have been talking about making India a “manufacturing hub”. According to a figure quoted in the Economic Survey of India 2019-20, manufacturing units in India require complying with 6796 rules and regulations. However, this is the total number of rules and regulations and every rule does not apply to every unit. But look at the number of rules the sector has to comply with. What will happen to a small business which has a limited workforce? They cannot have a dedicated person or team to ensure that they are complying with all the rules.
Indian social environment is not very conducive for entrepreneurship. Society and families in general do not encourage risk- taking. There is no space to make mistakes. People feel pressure to take up a job and live a stable life. Also, despite Indians boasting about unity in diversity in the country, different groups are stereotyped. It poses an additional hurdle in the way of people from different backgrounds who may have brilliant business ideas.
India’s education system, like Indian society, does not encourage entrepreneurship. Let alone the lack of entrepreneurial skills in the curriculum, the culture in the schools gives excessive importance to discipline. There is no scope for children to think and to do something different. Not enough opportunities are given to children to explore themselves. School in India is not at all a better place for different children. It leaves no stone unturned to crush their confidence. As far as education in these schools is concerned, children are bombarded with facts rather than encouraged to put them in different perspectives. Not surprisingly, many people have no clue at all about what to do in life, let alone them thinking about business ideas.
Now let us come to the flaws of the idea of self reliant India. As per my understanding, it means import substitution. India would restrict imports and force people to buy from local companies. In other words, it will reduce people’s choices and competition for Indian companies. If a person gets a good quality imported product at Rs 20, and the same product made in India costs Rs 25, the former is giving more value for money. The person can use the remaining Rs 5 in some other economic activity. That avoids the flow of wealth from one section of the society to another directly, ensures that the wealth doesn’t get concentrated.
If we talk about the competition aspect, as we have seen that setting up a new business is not very easy in India, if we restrict imports, the established businesses will have nobody to compete with. Indians will strictly have to buy products from these companies no matter how the quality and what the price is.
As far as creating global brands in India is concerned, how will Indian companies be able to compete at the global level when they don’t face competition within the country?
The concept of Atmanirbharta or self reliance is an illusion. Nobody in this world is self reliant. We are dependent on one another. It will be disastrous for our economy and our people if we start chasing the illusion of self reliance. Instead, we must compete with the world by making changes in our policies, in our attitudes and, most importantly, by making drastic changes in our education system.
Calling Attention 