The government of India allocated total spending of Rs 20 lakh crore
The government has taken a balanced approach to solving issues across sectors.
“Atmanirbhar Bharat” or “self-reliant India” is one of the most talked-about ambitious visions of the Prime Minister of India Narendra Modi to make India a self-reliant nation. Mr. Narendra Modi launched the ‘Atma Nirbhar Bharat Abhiyan’ (ANBA) or ‘Self-reliant India Campaign’ to inspire Indians to help build a strong economy. He announced an economic stimulus package worth Rs 20 lakh crore to rejuvenate the economy reeling under the onslaught of the COVID-19 pandemic. The allocated fund was about 10% of India’s GDP in 2019-20.
- The ANBA relief package includes Rs 1.7 lakh crore package announced by the government in March, and also, the steps were taken by the Reserve Bank of India (RBI) such as liquidity enhancing measures and interest rate cuts.
- Social distancing has become a serious pre-requisite of continuing business operations due to the coronavirus outbreak.
- The ANBA package is going to help Indian manufacturers to continue business and sustain their logistics supply chain.
- India is well-known as a net importer, implying that its imports exceed its exports.
The government of India allocated total spending of Rs 20 lakh crore under “Atma Nirbhar Bharat Abhiyan(ANBA) or Self-reliant India Mission” to fight the COVID-19 pandemic. The objective of this special stimulus package is providing immediate support, relief and assistance to farmers, labourers, middle class, MSMEs, and cottage industries.
The Rs 20 lakh crore package includes:
- The relief measures government has already announced and the steps taken by the Reserve Bank of India (RBI).
- In March, India committed the first fiscal relief package of Rs 1.7 lakh crore ($22.6 billion) in COVID-19 related relief measures including free foodgrains to poor and some cash to needy senior citizens and women.
- The RBI has announced Rs 3.7 lakh crore liquidity support in March, and another Rs 2 lakh crore in April. Thus the RBI’s decisions have provided additional liquidity of around 6 lakh crore since the start of the Covid-19 crisis.
- As per the RBI, its measures provided support equivalent to 3.5% of the GDP.
5 Pillars of the Ambitious ‘Atma Nirbhar Bharat Abhiyan’
Prime Minister Modi enunciated the 5 pillars of the ambitious ‘Atma Nirbhar Bharat Abhiyan’:
- Technologically driven System
He lauded the endeavors of the local suppliers who met the demands during the global health emergency. He urged citizens to empower local manufacturers, markets and the supply chain as a whole and be ‘vocal about local.’
Impact of this Stimulus Package
1. Primary Sector
The measures such as reforms to amend ECA, APMC, Contract framing, etc. announced for the agricultural and allied sectors are explicitly transformative.
- These are the steps towards the One Nation One Market objective that help India become the food factory of the world.
- These would also help in achieving the self-sustainable rural economy target.
- The MGNREGA infused fund of Rs 40,000 crore may help to reduce the sufferings of migrants on their return to villages.
2. Secondary Sector
The collateral-free loan facility of Rs 3 lakh crore was announced for MSMEs with outstanding loans of Rs 25 Cr or yearly turnover of Rs 100 Cr under the package. A measure of Rs 20K Cr has additionally been reserved to be utilized for small and medium-sized businesses. It will not only help finance starved MSME sector but also boost the dismal state of the Indian economy.
- In India, the MSME sector is the second-largest employment generating sector. This step will help to sustain the labour-intensive industries and leveraging India’s comparative advantage.
- Restricting imports of weapons and increasing the limit of foreign direct investment in defence from 49% to 74% will boost the production in the Ordnance Factory Board while reducing the large defence import bill of India.
- Besides, Govt. reported a few other measures to increase the money flow in the market, equity infusion of Rs 50K in the market, and a 25% decrease in taxes until March 2021.
This is going to help a lot of businesses, including the automobile industry. The government has broadened the extent of small, medium, and large-scale companies and has also restricted the difference between manufacturing and service businesses.
3. Tertiary Sector
The government has taken a balanced approach to solving issues across sectors.
- PM e-Vidya programme, launched newly for multi-mode access to digital online education, provides a uniform learning platform across the whole nation, enabling schools and universities to online stream courses without further loss of teaching hours.
- Increase in Public expenditure on health by investing in grass-root health institutions and ramping up rural and urban health and wellness centres.
What are the Survival Strategies in this new Atmanirbhar India?
1. Contactless Payment and Delivery
As social distancing has become a serious pre-requisite of continuing business operations at the outset of the coronavirus outbreak, contactless delivery of products emerges as the new normal.
Since the lockdown, cash-on-delivery orders have been replaced by online transactions or virtual payment applications such as credit cards and UPI transactions. It has given the domestic financial-tech companies new opportunities to offer several customized payment solutions as per the emerging needs.
The buyers are increasingly moving towards online shopping for their essential needs. It requires the last-mile delivery services to step up to provide better delivery performance. Some are now using OTP for delivery confirmations and cancellations like Pickrr, while others are using GPS for tracking delivery personnel’s location.
Newer technologies like smart proximity check & authentication might provide a solution to an age-old problem of making fake comments by ground staff.
2. Supply Chain Logistics
Indian is a popular net importer, which implies that its imports exceed its exports. As India has a strong local logistics network, techy Indian aggregators must join their hands to ensure a faster and broader reach to substitute its primary reliance on foreign countries.
This could be possible when the self-reliant logistics platforms such as Pickrr and Shiprocket take charge and consolidate local logistics market players virtually, bringing them under one roof.
Every benefit provided under the ANBA is going to help Indian manufacturers continue the business, sustain their logistics supply chain and boost their self-reliance by requiring less from other countries.
Reform Packages of Other Countries
- Japan – a package equivalent to 21.1% of its GDP.
- The US – an estimated stimulus worth 13% of GDP and said to have announced a relief package of $3 trillion (Rs 225 lakh crore).
- Sweden – a stimulus equal to 12% of its GDP
- Australia – allocated 10.8% of GDP to tackle COVID-19.
- Germany – expenditure of around $815 billion, equal to 10.7% of its GDP.
With the “Atma Nirbhar Bharat Abhiyan,” India would rank 6th, only after Japan, the US, Sweden, Australia, and Germany.
The unabated viral spread confirms that the virus is here to stay, and the nation must learn to live with it. Indians have always displayed tremendous grit and determination to overcome hurdles. “Vasudaivakutumbakam,” the concept that proudly recognizes the world as one family, has been integral to the global outlook of India. Hence, India’s attempts to achieve self-sufficiency will eventually bode well for the prosperity of the World at large.
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(About Author: Arindom is a professional writer, editor, blogger and a member of the International Association of Professional Writers and Editors, New York. A management postgraduate in finance with extensive industry exposure, he is associated with many reputed global online magazines and publications as a regular contributor. He loves to help his readers writing highly informative and well-researched investment-related content to make informed decisions.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of organization)