Sustainable development has a direct relation to human development, employment, per capita expenditure, disposable income and so forth human indices as well when you look beyond dry words of Industry and Agriculture and Services growth and GDP etc.
Few identified deadlocks were –
- Lack of Liquidity on part of the loan givers and funding agencies.
- Lack of Demand on part of the purchasers
- Lack of cash influencing consumer behaviour
More than 50 days of Lockdown has worsened the situation
While February showed a silver line and positive growth of 4.5% suddenly in March all industrial output index shown a major decline. Industrial Production contracting 16.7%, reflecting the drastic impact of the countrywide lockdown that began on March 25. Manufacturing sector output slumped 20% in March, while electricity generation shrank almost 7%, Ministry of Statistics and Program Implementation confirmed.
India inched up one spot to rank 129th out of 189 countries on the 2019 Human Development Index (HDI) released by the United Nations Development Program (UNDP) But the situation needs many improvements.
This is only possible when Economic cycle moves, jobs are created; earnings are such that one has disposable income. Wealth is created at the ground level. Social inequality fades with better health and Education. But, Pre-COVID, there already has been a global recession going on and India being integrated part with the World Trade was already reeling through a slowdown.
At this background, when Industry, experts and all concerned were expecting for a Govt. stimulus package to lift the situation- there was a need for a Big Bang reform and Indian govt. came out with a massive bold package of Relief and Reform termed as Atmanirbharshil Bharat meaning Self-reliant India stressing on Localisation and then going Global with Sustainable Development.
Considering the global impact of Covid-19 on already recession-hit EU and current situation of US and considering the Indian domestic market size – If India can ignite the growth engine within with a retrospective effect across sectors, the Economy can take off with a jump start.
Prime Minister Modi announced a special economic package and gave a clarion call for Self Reliance. He noted that this package, taken together with earlier announcements by the government during COVID crisis and decisions taken by RBI, is to the tune of Rs 20 lakh crore, which is equivalent to almost 10% of India’s GDP. He said that the package will provide a much-needed boost towards achieving ‘Atmanirbhar Bharat’.
Prime Minister stated that the package will also focus on land, labour, liquidity and laws. It will cater to various sections including cottage industry, MSMEs, agriculture, labourers, middle class, and industries, among others.He underlined the importance of strengthening all stakeholders in the supply chain to increase, as well as fulfil, the demand.
Globalisation to Localisation
What COVID taught is – Too much of outward dependency without empowering Local industries ultimately weakens the Economic fundamentals as in the entire value chain starting from raw material to end product to the market, some part remains in India whereas most come from overseas. Till the time India is not being able to develop the most part of it in India e.g. raw material to Assembly Line to Product Manufacturing to Supply Chain Logistics to Market – It will largely remain dependent on other countries and economy will be import based. What India wants now is to identify areas where this can be implemented on priority so that in the time of crisis in future India can remain self-reliant for example for Pharma sector, many raw materials come from oversea now and therefore dependency is very high.
During the initial days of Lockdown, local grocers were found to be saviours and came in rescue of masses. A nationwide strong network of small-time traders are still robust and Therefore, in Demand generation – there is a call to encourage these Local players. Local pe Vocal. And, gradually make these brands help become Global Brands.
Therefore, focus on Local doesn’t mean isolation but going Global with the empowered Local and help make them Global brands too. In the process, FDIs are most welcome in strategic manufacturing starting from Mining, Defense manufacturing to Civil Aviation etc.
Now if you link these two perspectives, it caters to Demand-side as well as supply-side encompassing large Enterprises to MSMEs.
It also ensures Liquidity issues by RBI, the Central Bank of India, flow of cash by Loan, releasing govt. funds and refunds etc. Policy changing for generating demand in tendering processes and encouraging exports than Imports
The success story
For example, two months ago, India was completely dependent on foreign imports for PPE (Personal Protective Equipments) kits for Healthcare workers. But when the situation demanded, Indian MSME sector came up and just in 2 months India is currently producing 2L kits per day with 400 lab-certified manufacturers produced so far 50L kits which are projected to reach 2 Cr by June end and can be a major global exporter. This has encouraged the policymaker.
Similarly, at the beginning of COVID outbreak, India lacked testing kits and was importing. Then, Indian start-ups developed cost-effective kits and there were more than 20 indigenously developed Covid-19 test kits in one month.
Balance among States
There is a deep gap among states in India’s SDG Index Score ranges between 42 and 69 for States and between 57and 68 for us. Kerala and Himachal Pradesh are the front runners amongst all the States with a score of 69, Chandigarh and Puducherry are the front runners with a score of 68 and 65 respectively among the UT’s, the Survey states.
Developed states provide work and migratory labourers from underdeveloped states flocks to those states as a cheap labour force. If this imbalance continues, sustainable development is not possible.
Self Reliant India Mission also focuses on removing this imbalance through its reform measures.
Few examples –
MSME – The maximum employment generator
MSMEs are the backbone of the Indian economy and it contributes 29 per cent of the country’s GDP. And the target is to up the contribution to 50 per cent by 2025 as India plans to become a $5 trillion economy. The key to solving India’s job crisis may also lie within the MSME sector. A CII survey reveals that the MSME sector created the most number of jobs in the country in the last four years.
Govt. first changed the definition of MSME to broad spread the coverage and announced a slew of liquidity measures, which include collateral-free automatic loan worth Rs 3-lakh crore. Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover are eligible a 4-year tenure and moratorium for 4 months. There will be a 100% credit guarantee cover and to Banks and on principal and interest and the scheme can be availed till October 31, 2020. This is expected to benefit 45 lakh units.
This is expected to infuse fresh money into the system percolating down to the grass-root level.
Agri and allied services account for around 16% of the Indian GDP. Agriculture is the primary source of livelihood for about 58 per cent of India’s population. GVA by agriculture, forestry and fishing is estimated at Rs 18.55 lakh crore (US$ 265.51 billion) in FY19(PE). Growth in Gross Value Added (GVA) by agriculture and allied sectors stood at 2.1 per cent in H1 2019-20.
New reform measures will focus on increasing Farmer’s income, Farm to Market forward/backward linkage taking the entire value chain into account with storage. the e-auction, Mandi/Market.
While this article is being penned, many other measures are being announced in tranches such as big pending reforms and relaxation in Mining abolishing Coal India monopoly inviting private investments, FDI in Civil Aviation, Defense Manufacturing et all with much stress on Technology. The Economy is expected to have a quantum jump with all-round impact on the overall livelihood.
Kaushik is a Business Strategy & Management Consultant with over 24 years of global experience. He is Evangelist in the areas of BigData, Analytics, Customer Experience Management, Digital Transformation. He is a renowned speaker, coach & writer, a Mentor at Start-up India. Worked with NASSCOM, Headstart, MSME, Govt. of India as Mentor.