Ayadoure S. Stalin Young Leader - IndiaGlocal
Ayadoure S. Stalin is a full time post graduate candidate of Politics & International Studies at Pondicherry University. This article was submitted as part of his selection process as an IndiaGlocal - Young Leader. The views and opinion in the article are solely of the author.
In the ongoing trade war between the USA and China, many multinational and transnational companies have decided to move out of China. In that process, it was introspected by the Nomura Groups to find out which country would be favourable destination to those companies that are exiting from China. That report underscored the plight of the Indian economy that it is unfavorable to these shifting firms. Also, this report highlighted that Vietnam is the preferred destination. The paradoxical argument mooted here: how could Vietnam, which ranks below India in the Ease of Doing Business Index, is a favourable destination to these firms? In that same report, the Nomura group had reported that India is a sleeping giant and noted that India performs below its capacity.
The preferred arguments why India is not the favourable destination for these shifting firms are: Firstly, the complexity in the labour laws and the stagnating reforms in those codes; Secondly, the fall in investment returns or lack of the confidence primarily due to the whooping non-performing assets and lackadaisical approach in the insolvency process; Thirdly, the entry into the Indian land needs multi vectored approvals like Pollution Clearance, Environmental Clearance, Town Planning, etc. These stipulated narratives elucidate why India tagged as a sleeping giant. It is imperative to know what does the industries expect in labour reforms, and primarily they seek a clause for laying off labours and salary cuts on their discretion. India, being a democratic country, finds the industry's expectation as ultra-vires. On that note, the result has been the fall in the GDP. Primarily what it means is the reversal in the growth of the Indian economy, and as a chain reaction, it will lead to severe unemployment.
Now India sets a goal to be Atma-Nirbhar or Self Reliant, but one must be cognizant that in that accord while India has shown a record of economic growth, little has been done in the name of development. To be self-reliant, India needs to have inclusive growth which means: First, India shall give priority to skill its youth because as per statistical records a sizeable number of Indian population and especially women are having divides in terms of how to access Information Communication Technologies; Second, the MSME are nerve centers to the growth and development of Indian Economy and these enterprises are caught in the middle of financial crunch primarily due to the lack of access to formal credit facility; Third, a sizeable investment needs to be scoped into Research and Development so that the innovation will be the driver to the economy in the future. In the ongoing period, the RBI and Finance Ministry has undertaken some measures like interest rate reduction, credit guarantee, and liquidity enhancement schemes. Though these measure are vital but their realisation has been a utopia. As an Atma-Nirbar nation, India needs to understand that the public sector and the private sector have to co-exist. That co-existence is possible when there is a partnership or hyphenation and to quote the best example: JIPMER one of the leading Medical Institute has started to outsource its testing and scanning centers with private players.
The possible strategies to overcome this dilemma would be: First, the government has to create demand because the existence of demand will drive the engine and what government now seeking is to create fuel (credits) and the most desirable aspect in that direction is the passage of basic income such that the demand is revived as of now; Second, in the line of MGNREGA, a new scheme needs to be devised for skilled works and the relevant infrastructure needs to be appropriated such that it would be a formal state medium mechanism which the citizenry would be skilled, this mechanism will quench the narrative of unskilled labour forces; Third, the research and innovation are mandatory and relevant attention needs to diverted into the sphere and primary focus shall be to examine and introspect the best practices of the other countries which would sustain in India; Fourth, the concoction of the private and public sectors are imperative because in the event of calamity or unprecedented situation, the shocks in the economy would be easily neutralised. Self-reliance does not explicate that India will cut itself off from the rest of the world and thereby avoids competing with the best in the world and benchmarking itself against them. But, it denotes the coexistence of public and private sector strategically so that our dependence in the emergency and calamity are minimized.