Prime Minister in his message at Indo US Business Summit, invited Global
investors to invest in India; 'India offers combination of openness,
opportunities and options'. He has been saying that 'India has undertaken deep
structural reforms, improving domestic manufacturing and is committed to
diversified international trade'. He talks about merging of domestic production
and consumption with global supply chains.
Shri Narendra Modi has
never shied from taking tough decisions in the interest of the nation. He has
the will power and is always ready to take bold decisions; privatization of
railways, PSU disinvestments, reducing corporate tax and opening up of coal
mining to private sector, may have been unpopular with certain quarters, but
are necessary for the long-term health of our economy, particularly
strengthening our manufacturing base. The goal is; politically and economically
strong India and Aatma Nirbhar Bharat is the roadmap.
Government’s Aatma
Nirbhar Bharat Abhiyan is a 360 degree initiative to make India an economic
superpower, integrating domestic manufacturing into regional and global supply
chain. The focus is on five pillars of development; economy, infrastructure,
technology, demography and demand. Our targets are the factors of production;
land, labor, legislation and liquidity, improving their efficiency and reducing
cost to make our industries, globally competitive. It is not only restricted to
manufacturing, but targeted to direct benefit transfer to the needy and the
poor, also resulting in the demand creation in the economy and helping the
needy, particularly farmers, migrant laborers, daily wagers etc.
Aatma Nirbhar Bharat
Abhiyan has little to do with disengagement with China alone. We saw the design
of Chinese economic imperialism very early. Our disengagement with China began
much early then many would like to believe. It began with Prime Minister opting out of (Regional Comprehensive
Economic Partnership) RCEP. Chinese leadership was all out to pressurise Indian
side to go for RCEP or face isolation amongst the 16 countries. But the PM
stood for the interest of the Nation. In 2010, UPA II signed Free Trade
Agreements (FTA) with 10 ASEAN countries, the benefits of which were being reaped by China as well.
Reduced custom duties from these countries was creating inverted duty structure
in domestic manufacturing sector, destroying local industries and converting
manufacturers into traders. Therefore in the last Budget in 2019, government
had increased import duties in about 56 items spread across eight
classification. Items like toys saw an increase of 60 percent from 20 percent
earlier. All these efforts were to protect domestic industries from the
onslaught of dumping and competition. Without first strengthening domestic
manufacturing by providing level playing field and reducing the cost and increasing
the efficiency of factors of production, we cannot open the floodgates of
imports.
Chinese leadership had
almost hit the target with the UPA led government accepting RCEP. The reports
by Rajiv Gandhi Foundation (RGF) points towards that clearly. India's signing
of FTA with ASEAN countries without strengthening our domestic industries and
opening them to regional and global competition, shows that India's interest
were compromised. One important question; why did India which was a global
leader in the pharma sector, gradually concede API production to China. Let UPA
leaders answer them all.
As of now, with the unprecedented Corona pandemic,
world saw the risk associated with over dependence for supply chain on one
nation. We rose to the occasion identifying it as a Risk Diversion Strategy for
Global Manufacturing companies. It was an opportunity for India within the
challenges arising from Corona crisis. Further, the Chinese aggression at LAC
at Galwan valley, forced the government to immediately ban imports, FDI and 59
apps from China. This is being hailed as a timely move, though certain
economist and industrialist are sounding caution on its long term impact. But many
of the logic put forward and concerns expressed by them seem to be the line propagated
by the Chinese media and the government
officials.
Fortunately what
we import from China are mostly where India has domestic technology and can leverage itself for import substitution. Most of
these items do not come under the essential consumption requirements category
and are generaly non Merit Goods.
Except pharma,
where China is dominating through the supply chain of API, it has not been able
to penetrate into strategic sectors,. India's manufacturers need to come
forward to take this golden opportunity in sectors such as; toys, electrical
equipments, electronics, minerals, chemicals, iron & steel, plastics,
furniture, sports goods, musical instruments, fertilisers and Apps.
Earlier ministry of commerce and industry had identified 12 such sectors, which
now constitute 20 sectors. And 371 items have been identified for increasing
import duties including non tariff barriers on some of them.
If you look into
the comaparative advantage theory domestically we have to
focus on areas such as agriculture; particularly food processing, textiles,
affordable housing, healthcare and education, and increase their contribution
to our GDP. These sectors have ample scope, can generate large employment and
are looking up, on our path to recovery.
Gopal Krishna
Agarwal
National
Spokesperson of BJP on economic Affairs
