On May 12th 2020, Prime Minister Narendra Modi announced the ‘Atmanirbhar Bharat Scheme’ by addressing the nation on May 12 2020 at 8 pm. This is an economic package according to counter and fill the economic distress caused by the COVID-19 pandemic. The package prima facie is of the quantum of 20 lakh crores, which is equivalent to 10% of the GDP for the fiscal year 2020. This package will cater to the sustenance of labourers, middle class, cottage industry, MSMEs and other industries. This package will also cater to the sustenance of labourers, middle class, cottage industry, MSMEs and other industries also aims to revive the industrial sector. The announced economic package is 10% of India’s Gross Domestic Product (GDP) in 2019-20. The amount includes packages already announced at the beginning of the lockdown incorporating measures from the RBI and the pay outs under the Pradhan Mantri Garib Kalyan Yojana. The package is expected to focus on land, labour, liquidity and laws.
This scheme aims towards cutting down import dependence by focussing on substitution while improving safety compliance and quality goods to gain global market share. There are five pillars of Aatma Nirbhar Bharat. They are economy, infrastructure, system, demography & demand. As per first pillar, an economy takes quantum jumps and not incremental change. As per second pillar, infrastructure should be world-class and becomes the identity of India which is synonymous with a modern India. As per third pillar, a system is based on the technology-driven arrangements, fulfilling the dreams of the 21st century, not the policy of the past century. As per the fourth pillar, a vibrant demography is the source of energy for a self-reliant India. And as per the fifth pillar, demand and the strength of our demand and supply chain should be utilized to full capacity. The fifth pillar mainly focusses on the importance of strengthening all stakeholders in the supply chain to increase, as well as to fulfill, the demand.
This scheme neither signifies any exclusionary strategies but involves creation of a helping hand to the whole world. The Aatma Nirbhar Bharat scheme or mission main aim is to focus on importance of promoting “local” products so that we can use our product as much as we can. Using products mainly used in India makes Indians proud. This mission is also expected to complement ‘Make in India Initiative’ which intends to encourage manufacturing in India.
This scheme/mission will be carried out in two phases:
Phase 01: This phase will consider sectors like medical textiles, electronics, plastics and toys. In this phase only local manufacturing and exports can be promoted.
Phase 02: This phase will consider products like gems and jewellery, pharma and steel, etc.
The Aatma Nirbhar Bharat included RBI’s expenditure in this fiscal package and due to which the declared package is considered to be substantially less because it includes the actions of RBI as part of the government’s “fiscal” package, even though only the government controls the fiscal policy and not the RBI. The Government expenditure and RBI’s actions are neither the same nor can they be added in this manner. And thus, nowhere in the world fiscal packages are declared in this manner. But due to the inclusion of RBI’s expenditure, there would be bit implications due to that such as If the government is including RBI’s liquidity decisions in the calculation, then the actual fresh spending by the government could be considerably lower. This would be because RBI has been coming out with Long Term Repo Operation (LTRO), to infuse liquidity into the banking system worth Rs 1 lakh crore at a time. If RBI launches another LTRO of Rs 1 lakh crore, then the overall fiscal help falls by the same amount. The direct expenditure by a government usually includes wage subsidy or direct benefit transfer or payment of salaries, etc. In simple words, money necessarily reaches the people either as through salary or purchase. But the measures from RBI include credit easing that is making more money available to the banks so that they can lend to the broader economy. Thus, the declared amount is 10% of GDP, but less than 5% cash outgo is expected.
The economic crisis which was done by Covid-19 pandemic is much like the 1991 economic crisis. Aatma Nirbhar Bharat resonates well with the Sangh’s core philosophy of Swadeshi, or being indigenous, and the PM’s announcement was perceived as the first steps for reshaping this policy in keeping with their long-pending demand. The Aatma Nirbhar Scheme is very useful and beneficial for Indian citizens. It is like a ray of hope for many Indian citizens.