The Impact of Policy Reforms on Aatmanirbhar Bharat
4 min read • Updated: January 31, 2024, 10:33 PM
The Aatmanirbhar Bharat Initiative, spearheaded by the Indian Government, aims to foster self-reliance, self-sufficiency, and diversification in India's economy. Three key policy measures - Production Linked Incentives (PLI), Public Sector Enterprise (PSE) privatization, and Foreign Direct Investment (FDI) liberalization - form the backbone of this initiative. Unlike past approaches, these policies emphasize competitiveness, innovation, and exports, signaling a shift towards a dynamic and globally competitive economy. The PLI scheme incentivizes domestic manufacturing, PSE privatization reduces fiscal burden and enhances efficiency, while FDI liberalization attracts foreign investment and technology. These reforms are expected to bolster India's economic growth and reinforce its position as a global economic powerhouse.
- Aatmanirbhar Bharat Initiative is a transformative vision that promises to bring about a fundamental change in India.
- Our country’s development trajectory can be promoted by self-reliance, self-sufficiency, and diversification- the Aatmanirbhar Vision.
- Three significant policy measures, namely Production Linked Incentives (PLI), Public Sector Enterprise (PSE) privatisation, and Foreign Direct Investment (FDI) liberalisation, form the cornerstone of this initiative.
The Aatmanirbhar Bharat Initiative, meaning the Self-Reliant India Campaign, is a vision set forth by the Indian Government. It aims to make India a globally competitive economic powerhouse by promoting self-reliance, self-sufficiency, and diversification in various sectors.
Imagine India as a puppet, controlled by foreign strings and pulled by global economic winds. This is exactly how India's economy has evolved since its independence – dependent on imports and flickering at the mercy of foreign economic policies. The Aatmanirbhar Bharat Initiative indicates a new era, where India takes the steering wheel of its economy and begins its course to self-reliance.
With five pillars - Economy, Infrastructure, System, Vibrant Demography, and Demand - the initiative seeks to introduce a cycle of economic growth and development that is both inclusive and sustainable. The initiative aims to improve in key sectors, such as transportation, telecommunications, power, and logistics, to promote ease of doing business and attract more investment.
However, how does the Aatmanirbhar Bharat Initiative differ from previous economic reforms in India?
How is it different from previous policies so far?
Unlike earlier initiatives, which were focused on subsidies and active player intervention, the Aatmanirbhar Bharat Initiative is driven by strategic interventions combined with incentives that seek to promote competitiveness, innovation, and exports. This is likely to result in a paradigm shift towards a dynamic, innovative, technology-intensive, and globally competitive economy. So, less dependence on imports and foreign aid.
Besides, the Aatmanirbhar Bharat Initiative is not a one-time event but a coherent strategy that seeks to build upon the foundational reforms initiated by successive Indian Governments. It will take some time to bear fruit, but the Government is committed to its implementation by working hand in hand with the private and public sectors, civil society, and mass media to create a vibrant ecosystem for self-reliance.
Impact on Policy Reforms
The impact of policy reforms on this scheme shows a significant focus on boosting domestic manufacturing and exports through various initiatives. The effectiveness of recent policies like Production Linked Incentives (PLI), Public Sector Enterprise (PSE) privatisation, and Foreign Direct Investment (FDI) liberalisation has been instrumental in driving economic growth.
Production Linked Incentives scheme has been implemented by the government in various sectors, such as pharmaceuticals, electronics, textiles, and automobiles. From which it has received a positive response. By providing financial incentives to manufacturers to scale up production in India, the scheme is expected to transform India into a global manufacturing hub. The Economic Survey 2022-23 estimated that the PLI would add $53 million as incremental exports by 2025-26.
They also introduced about 14 categories, as of January 2023, which have an estimated capital expenditure of ₹4 lakh crore over the next five years.
Another significant policy reform is Public Sector Enterprise privatisation. The government has recently announced plans to privatise several PSEs, except those for strategic purposes. The move is expected to reduce fiscal burden, improve efficiency, and create operational and financial synergies. Plus, the profits generated from divestment can be used to fund infrastructure projects, which in turn, can create employment opportunities and contribute to the nation’s growth.
Furthermore, the liberalisation of Foreign Direct Investment policies can also improve domestic manufacturing and exports. The government has taken several measures to ease FDI norms, such as allowing 100% FDI in insurance intermediaries, risk management, and underwriting business, and raising the FDI limit in the construction sector to 75%. Not only will this encourage foreign investment in India but also promote technology and create additional employment prospects.
In short, recent policies like PLI, PSE privatisation, and FDI liberalisation have been truly effective in increasing domestic manufacturing and exports. And the Aatmanirbhar Bharat vision has demonstrated a wholesome approach towards self-reliance and economic growth. These initiatives are expected to have a major impact on the Indian economy and are likely to be further reinforced in the upcoming budget to keep the momentum going.
It’s time that India emerges as a global economic powerhouse by plotting its destiny and realising its true potential.