Mahatma Gandhiji said that the future depends on what you do today. Unprecedented situations call for unprecedented steps, actions and decisions. The world is facing an unprecedented not just financial but social and political crisis also. If a nation wishes not just to get back on track but emerge as a leader it has to change this crisis into once in a lifetime opportunity. And India is on that right track through the Atmanirbhar Bharat Abhiyan. Prime Minister has announced that the stimulus package under Atmanirbhar Bharat would amount to 20 lakh crore rupees, including liquidity infusion measures announced by the Reserve Bank of India. The Union Finance Minster has been elaborating the sector wise allocations, policy decisions. Here, while going through those policy decisions and allocations would like to discuss the conceptual things around such stimulus packages which intend to kick start economy and decode how today's actions are going to define the future of India.
Before going into the stimulus package, let's consider some concepts or approaches towards poverty alleviation. One is poverty alleviation through putting cash benefits into hands of poor through various subsidy based programs. For example Public Distribution System, Employment Guarantee schemes such as MGNREGS and various such schemes. Considering the technological advancement the Direct Cash Transfers i.e. something similar to Universal Basic Income have come up in recent times. The other is the Asset Creation Approach. Where the State Makes sure that the poor gets into credit cycle, gets rightful possession over an asset which yields monetary income and gets himself out of poverty. The women SHGs and other such schemes are examples of Asset Creation approach. Considering these two approaches in mind let's move ahead with the Keynesian approach to kick start economy to get out of the vicious cycle of depression, recession. The root cause of vicious cycle of demand is lack of demand. Once the root cause is defined, solution lies there i.e. put money or more accurately put purchasing power in the hands of people. In various economic crises various countries followed the theory that defines the root cause. The difference lies in how to put purchasing power in hands of the people? Whether to initiate large infrastructure projects or to go for cut in taxes and give push for demand? Considering all the debate along the approaches India always keeps on walking ahead with the 'Samyak Marg.' On one hand India had announced the 'National Infrastructure Pipeline' on the other hand had announced the 'Pradhan Mantri Garib Kalyan Yojana' which had provisions for direct cash transfers. Now Atmanirbhar Bharat Abhiyan which we can roughly attribute to the Asset Creation Approach.
Before going into the stimulus package, let's consider some concepts or approaches towards poverty alleviation. One is poverty alleviation through putting cash benefits into hands of poor through various subsidy based programs. For example Public Distribution System, Employment Guarantee schemes such as MGNREGS and various such schemes. Considering the technological advancement the Direct Cash Transfers i.e. something similar to Universal Basic Income have come up in recent times. The other is the Asset Creation Approach. Where the State Makes sure that the poor gets into credit cycle, gets rightful possession over an asset which yields monetary income and gets himself out of poverty. The women SHGs and other such schemes are examples of Asset Creation approach. Considering these two approaches in mind let's move ahead with the Keynesian approach to kick start economy to get out of the vicious cycle of depression, recession. The root cause of vicious cycle of demand is lack of demand. Once the root cause is defined, solution lies there i.e. put money or more accurately put purchasing power in the hands of people. In various economic crises various countries followed the theory that defines the root cause. The difference lies in how to put purchasing power in hands of the people? Whether to initiate large infrastructure projects or to go for cut in taxes and give push for demand? Considering all the debate along the approaches India always keeps on walking ahead with the 'Samyak Marg.' On one hand India had announced the 'National Infrastructure Pipeline' on the other hand had announced the 'Pradhan Mantri Garib Kalyan Yojana' which had provisions for direct cash transfers. Now Atmanirbhar Bharat Abhiyan which we can roughly attribute to the Asset Creation Approach.
The Atmanirbhar Bharat Abhiyan package can be clubbed in 6 bullet points. Prompt and timely implementation of these initiatives can transform and strengthen the business ventures, agriculture.
- Initial Working Capital Assistance of Rs. 10,000 to the Street Vendors. Which will benefit to 50 lakh street vendors to get back on track. The total liquidity infusion through this initiative will be Rs.5,000 Crore.
- Provision for Interest Subvention of 2% to prompt payers of MUDRA-Shishu loans.
- Rs.3 Lakh Crore Collateral free Automatic loans for Businesses, MSMEs, Rs.20,000 Crore Subordinate Debt for stressed MSMEs and the most important decision in this direction is Rs.50,000 Crore Equity Infusion through Fund of Funds. Global Tenders up to Rs. 200 Crore to be disallowed. New definition of MSMEs on the basis of Investment and Turnover would change the entire business scenario of MSMEs.
- Opening up the agriculture produce marketing for farmers, deregulation of cereals, edible oils, oil seeds, pulses, onions, potato from the Essential Commodities Act, 1955, Creation of Rs1 Lakh Crore Fund for Farm-Gate Infrastructure for agriculture sector.
- Provision of Rs.20,000 Crore for Fisherman through Pradhan Mantri Matsya Sampada Yojana. Among which Rs.11,000 Crore for activities in marine, inland fisheries and aquaculture. Rs.9,000 Crore for infrastructure. Employment to over 55 lakh persons; double the exports to rs.1,00,000 Crore.
- Atmanirbhar Bharat. The vision that is based on 5 pillars. Economy, Infrastructure, System that is technology driven, Demography i.e. vibrant and Demand with the aim of full utilization of power of demand and supply are the pillars.
Street vendors, sellers in railways are forms of self employment. Due to lock down their business have hit hard. Their ventures are dependent upon continuous cash flow, continuous availability of working capital. The Atmanirbhar Abhiyan provides for these needs. However, details of the schemes are to be unveiled withing a month by the Central government. But some questions may arise as to the proof of being street vendors. One answer to this can be the licenses issued by the local authorities to street vendors. A self certification mechanism through portals with Railways, Local Authorities can be created. Prime Minister reiterated some reforms, initiatives implemented for last 6 years. Prime Minister Jan Dhan Yojana is one of the most important among them. Jan Dhan Yojana not just created the number of bank accounts but created a 'Creditworthy' individual, enterprise also. Who can avail various benefits of formal credit cycle.
The Atmanirbhar Bharat Abhiyan has various provisions related to almost every sector of the economy. Micro, Small and Medium Enterprises (MSME) are largest employment creators in India. Indian economy has been going through slowdown. One of the worst hit sector was MSMEs. MSMEs are those 'Assets' in the economy which can yield monetary incomes and create huge employment opportunities. These decisions will boost the liquidity availability and open the opportunities for expansion of MSMEs. Expansions that will enable those to make themselves more competitive. Structural reforms in agriculture sector are revolutionary. are such revolutionary provisions. Animal Husbandry, Fisheries are allied sectors of agriculture which are given great importance. Provisions aiming self reliance in defense production and procurement are according to the vision of Prime Minister of With provisions in Atmanirbhar Bharat Abhiyan India is investing more in 'Asset creation and Strengthening' with the agenda of Vocal for Local and Global Vison towards Atmanirbhar Bharat.
Comments
Post a Comment