Q. In order to make a truly Atma Nirbhar Bharat, the economic stimulus needs to complemented by bold reforms. Discuss. (250 words)03 Jun, 2020 GS Paper 3 Economy
- Start your answer by giving the context of Atma-Nirbhar Bharat Abhiyan, recently announced by the government. Briefly, state how through this policy government intends to make India self-reliant.
- Mention the possible impact of the economic stimulus package. Along with it, briefly discuss the associated challenges.
- Discuss the various reforms that should complement this stimulus package.
- Conclude suitably.
The covid-19 pandemic has impacted the lives and livelihoods of the people. Thus, in order to revive the economic activity, the Government of India has announced an economic stimulus package of Rs 20 lakh crore.
However, without bold reforms, especially in areas of 4L’s: Land, Labour, Law and Liquidity, this economic package may not be able to put India’s growth back on track.
Intended Goal and Associated Challenges
- The Rs 3 lakh crore collateral-free loan facility for MSMEs under the package will help this finance-starved sector and thereby provide a kickstart to the dismal state of the economy.
- Amid migrant workers crisis, lack of demand, this credit facility is unlikely to achieve its intended goal.
- A slew of measures related to agriculture marketing like amending Essential commodities Act, APMC Act, promoting contract farming, have been announced.
- Since Agriculture is a state subject, cooperation amongst states and union is critical to implement these reforms.
- Apart from it, without augmenting the agriculture supply chain, these reforms may not bring the desired result.
- The government also intends to boost domestic manufacturing, by further liberalising FDI policy in the defence and aviation sector.
- The issues of land acquisition, labour laws and lack of credit due to the incomplete transmission of monetary policy, have acted as a roadblock in the path of India becoming a manufacturing hub.
- Immediate measures should be taken to revive the aggregate demand in the Indian economy. In this pursuit, the policy of emergency basic income for a short time may be a good option.
- In order to have success in revamping agriculture and doubling farmers’ income, there is a need for cooperative federalism and augmenting agricultural infrastructure.
- There is a need for holistic reforms like addressing skill deficit, establishing a land bank, introducing innovative financing tools like InVITS, bringing labour reforms and improving ease of doing business.
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