On the eve of 75th Independence Day when you buy a plastic Tricolour from a young child on the traffic signal, would you (a) pause to think that this flag may be of Chinese origin, (b) buy with the idea of helping the poor child; or (c) just buy to demonstrate your feeling of patriotism?
In the post-independence
period, the Indian economy has been persistently suffering from a variety of
deficits. Though in the financial market parlance the twin economic deficits,
viz., current account deficit and fiscal deficit, have been discussed most,
these could be the least of worries for Indian economy in the current
circumstances. Some of the most worrisome deficits, in my view, include:
·
Growth
capital deficit
·
Advanced
technology deficit
·
Skill
deficit
·
Trust
deficit
·
Compliance
deficit
·
Governance
deficit
·
Productivity
deficit
·
Social
infrastructure deficit
·
Employment
opportunity deficit
·
Demand
deficit
On the eve of 75th
Independence day it is important to appreciate that to successfully achieve the
objective of self-reliance, as being popularly understood, we must first bridge
this multitude of deficits.
Not many people may like
hearing this, but the fact remains that 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.
Of course, all this has not been gratuitous on the part of Chinese enterprise
and administration. Nonetheless, it has helped to a great deal.
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 equipment, precious
metals and Iron & Steel. Our main exports to China include Cotton, gems
& jewellery, 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 endeavour would 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.;
