What the PM did not say | HT Editorial
In an address to the Indian Chamber of Commerce on Friday, Prime Minister (PM) Narendra Modi reiterated his call for a self-reliant India. He urged Indian industry to think and act boldly; he asked citizens to buy local and went back to Swami Vivekananda to emphasise how Indians buying domestic products and getting outsiders to buy local products is an effective remedy; he outlined manufacturing possibilities; and he spoke about the inter-connections between people, profits and the planet.
The pandemic has highlighted the close linkages between people and nature. The PM, through his term, has often spoken about placing environmental consciousness at the heart of India’s future. This is laudable — though many will ask why this principle is often not reflected in practice, given the rapid clearances provided by the environment ministry to projects that may have adverse consequences. This is the first gap between his messaging and policy which must be addressed. In the immediate context, it is important to examine the PM’s repeated emphasis on self-reliance. This has merit. At a time when protectionism is rising across the world, countries are turning more insular, and local industry needs all the support it can get, the principle is understandable. While the PM has spoken of how this does not mean getting divorced from global supply chains, the government has not yet clarified — in detail — how this will be reconciled with the deliberate objective of reducing foreign imports and how other countries will be persuaded to remain open to India, even as India closes its doors. This is the second gap between principle and policy which must be addressed.
But the most significant gap is between the PM’s optimism for the future — which is indeed a morale-booster — and the grim economic reality that exists today. A range of international agencies now predict a severe contraction in the Indian economy, of 5% or more. The economic package announced by the government lacked the fiscal measures needed to pump up demand. And there is a widespread consensus that till demand rises, businesses, supply chains, employment and tax revenues will not bounce back. And until that happens, India will not be able to achieve its high growth potential. On the environment, on global interlinkages, and most critically, on India’s economic future, the government must offer more clarity.