The Indian economy suffers from a variety of deficits. The most
talked about deficit, i.e., fiscal deficit in fact is the least worrisome
amongst all the deficits, in my view. I believe that some of the most worrisome
deficits include:
1. Growth capital
deficit
2. Advanced
technology deficit
3. Skill deficit
4. Trust deficit
5. Compliance
deficit
6. Governance
deficit
7. Productivity
deficit
8. Social
infrastructure deficit
9. Employment
opportunity deficit
10. Demand deficit
To successfully achieve the objective of self reliance, as being
popularly understood, we must first bridge these deficits.
In recent years, China has been helpful in bridging many of
these deficits, especially growth capital, technology, productivity, employment
opportunities and demand deficits. Chinese investors have invested millions of
dollars in Indian start ups by way of risk capital. Chinese have supplied
affordable solutions in the areas of energy, transportations, chemicals,
healthcare, etc. Affordable Chinese consumer imports have created huge
employment opportunities for millions of self entrepreneurs, traders, street
vendors, and aided in creation of demand, especially consumption demand. The
Chinese economy funded these deficits at the expense of its labor and stability
financial system.
We must pause here and assess that since due to legacy issues we
always have a wide and deep trust deficit with China, was it advisable in the
first place, to let Chinese and Indian economic interest intertwine so much?
Keeping the jingoistic nationalism aside, we must also consider
that the non essential, toys, plastic decorative items, small appliances &
tools which are more visible and talked about items, constitute a miniscule
part of the total imports from China. The imports are dominated by electronics,
engineering products & components, agro chemical, specialty chemical,
medical equipments, precious metals and Iron & Steel. Our main exports to
China include Cotton, gems & jewelry, copper, ores, organic chemicals.
China is therefore present in our entire value chain.
Disengagement with China in markets therefore has to be equally
strategic as in case of borders. We cannot and should not do it overnight by
taking some whimsical, but popular, decisions. We need to have a strategy to
fill the deficits by alternative means and render China redundant before disengaging
ourselves. Self reliance in this context would mean, building capacities in the
fields of advanced technology, raising the level of skill, compliance and
governance to attract adequate amount of growth capital, raising productivity
to enhance savings potential for domestic funding of growth; and bridging the
trust deficit between the people and the administration.
This endeavor inevitably include bringing India into a state of
equilibrium by removing social, and regional, economic imbalances, e.g.,
through-
- Industries and businesses who have thrived historical on government largesse and not necessarily on the enterprising abilities of promoters giving back to society by way higher taxes, higher voluntary CSR spending, technology upgrade for better resource utilization, etc.;
- Regions like Gujarat and Maharashtra, which are economically more developed despite not being endowed richly with natural resources, acknowledging that a part of their development is due to imperial designs of British regime and share their wealth with exploited regions like Jharkhand and Odisha.
- Caste and communities which command ownership of the major part of economic resources and occupy most of the social space, voluntarily vacating some space for the historically oppressed and downtrodden.
- Populace which has grown to be non-compliant by habit, not necessarily by intention, changing habits like spitting on roads, violating traffic rules, encroaching on pavements in front of their house/shops, exploiting domestic helps and child labor etc.
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