Dr. Devendra Kothari
Population and Development Analyst
Forum for Population Action
Self-reliance increases self-confidence.
Current thinking about economic development has not bettered global livelihoods. Without a solid model based on human development, economic development models produce hit-and-miss successes. “Economically, the lives of billions are lived out in misery and despair while many tools of better living are readily available. At a very basic level all of us suffer because social justice is not being achieved,….” noted by Paul Godfrey, Director of the Melvin J. Ballard Centre of Economic Self-reliance at Brighten Young University, Provo, UT. [1]
Here the concept of ‘Atmanirbhar economy’ or ‘self-reliant economy’ could be a great help. ‘Aatmanirbharata’ (‘self-reliance’) has become a buzzword in India after Prime Minister Narendra Modi mentioned it in his address to the Nation on May 12, 2020. He said that his version of self-reliance “does not imply isolationism and inward-orientation”. We think that his vision of ‘Aatmanirbharata’ or ‘self-reliance’ [2] will inject greater self-confidence in the people in making an empowered economy in the next 15-20 years. It must, however, be backed by a concrete action plan; otherwise, this chance may slip away. This post aims in this direction.
The Self-Reliant Economy (SRE) represents a different way of thinking about the processes and outcomes of economic development. It is “an individual’s ability to garner and hold economic resources in excess of their basic needs. In addition, individuals who are economically self-reliant have greater resilience in the face of negative economic shocks (like Covid-19 pandemic). Those with greater resilience will suffer lower intensity (less severe) or shorter duration (quicker recovery). In other words, SRE represents a type of insurance against the disruptions caused by adverse economic events. More important than its insurance value, SRE provides a solid platform from which people can develop and reach their full human potential.
How to achieve self-reliance? Available literature suggests that countries attempting to reach their objectives of ‘Aatmanirbharata’ should pursue policies that foster productivity growth. Increases in productivity allow countries to produce greater output for the same level of input (and goods become competitive in the global market), earn higher revenues, and ultimately generate higher Gross Domestic Product and wellbeing.
One of the best examples of this is China’s economic story. Economists generally attribute much of China's rapid economic growth to two main factors: large-scale capital investment (financed by large domestic savings and foreign investment) and rapid productivity growth by investing in people.[3]
As such, labour productivity is crucially dependent on the level of investment in knowledge (Human Development) and innovation (R&D), and even the success of various structural reforms to generate jobs.
This suggests that developing countries like India, in attempting to achieve SRE, should pursue policies that foster labour productivity growth. For India to be truly self-reliant and self-confident, public investment in the components of human development like education, health, gender equality and of course population stabilization efforts have to increase immediately. It is, therefore, an investment in people, especially those who are deprived, is a need of the hour. This is the way through which a number of other countries in the region, such as China, Japan, Taiwan, Thailand and Vietnam, boosted their national economies through a successful human development agenda.
Human capital lies in the individual-intangible quadrant and represents the final form of capital that helps individuals develop economic self-reliance. Human capital is the sum total of attitudes, cognitive abilities, and deployable skills possessed by an individual. It is the ability to work with little or minimum supervision. Also it can be defined as the ability to depend on oneself rather than relying on other people to achieve the goal. In other words, human capital can be described as what is in an individual’s head (knowledge), hands (skills), and heart (attitudes).
Human capital arises from two sources: (1) our own efforts, talents, and skills and (2) our relationships with family, government, and macro-social systems. In a system which is dominated by poverty and inequality, the role of government or macro-social systems are very important in promoting self-reliance. In other words, the macro-social systems and government have catalytic power to boost human capita.
So what is India waiting for?
The central government must set an overall action agenda for a self–reliant economy and human capital formation in consultation with the states, and its implementation, however, should be left on states. The Centre must give the states greater leeway to take decisions to achieve these.
In addition, India needs well-governed and well-managed smaller states for better governance. There are 28 states in India at present. Their populations range massively in size – the largest, Uttar Pradesh, holds around 200 million people, the smallest, Sikkim, just over half a million. About half of the country's population lives in five States, namely, Uttar Pradesh, Maharashtra, Bihar, West Bengal and Andhra Pradesh in 2011; and ten most populated states or super states of India contribute more than three- fourth of India's population .
There is a widespread perception that splitting super states into smaller ones will improve administration and governance by bringing power centres closer to the people, thus paving the way for a self-reliant economy.
The population of India is projected to increase from 1390 million in 2020 to 1700 million in 2051, as per the Population Reference Bureau that is in the next thirty-two years – an increase of 540 million. As a consequence, the total population of 10 most populous or super-states of India will increase from 927 million to 1366 million. And this fact must be kept in mind while redrawing the map of the Indian Union. As such, division of the existing super-states is a must. For governance and socio-economic reasons, the total population to be carved out smaller States should not exceed more than 50 million each with administrative friendly inter-state boundaries not like existing boundaries in Uttar Pradesh, Maharashtra, Madhya Pradesh, West Bengal or Rajasthan.
Now the question arises as how to boost human capital formation? The policy monograph - Nurturing Human Development: A Strategy for New India [4] proposes such a strategy to unlock the human potential based on the ‘capability’ approach; and it is christened as “HDPlus” (Human Development Plus). It is a dynamic agenda based on a ‘whole child’ concept, that is a school-going child and his/her family (that is HDPlus family) should be the fulcrum of human development efforts. The concept is being described by policies, practices, and relationships which ensure that each child is healthy, educated, engaged, supported and encouraged. For this, integrating the child and his or her family more deeply into the day-to-day life of school and home activities represents an untapped instrument for raising the overall achievements including learning skills and health parameters, and hence improving the overall productivity of the future workers. In other words, creating an enabling environment at family and school levels is a way to empower people.
It’s now or never situation not only for India alone but also for PM Modi. In my article: Decoding Modi’s Resounding Victory (June 2019), I concluded that “what India does in the next five years will determine not only the destiny of the country but also of PM Modi”. [5] A person like Modi knows about it that the people elected him with immense hope that he will change their lives for better. Investments in education, health, living environment and its determinants – the social sector – therefore, should be made a priority in the coming years to lay the foundation for a developed India by 100th birth anniversary of India. For this, PM Modi must use unmatched political capital to make it happen today!
The vision of ‘Atmanirbhar Bharat’ or
‘Self-Reliant India’ could be “The Roaring Twenties” for India. But
that cannot be achieved without peace, stability and effective governance.
India has to create an environment for the fundamentals of progress:
infrastructure development, human capital formation, rule of law, and so on.
Interestingly, it also frees up resources, both financial and human, that would
otherwise be diverted to controlling violence or maintaining law and order.
Further, we have to recognise that the solidarity of people is a prerequisite
for a Self-Reliant Economy. Here the issue of communal harmony is very
important. Lastly, any action agenda to achieve self-reliance must
be based on a participatory dialogue between Centre and States
[1] Godfrey, Paul. (2013).
More than Money, Stanford: Stanford University Press.
[2] The Oxford panel has now chosen 'Atmanirbharta' (self-reliance) as the Hindi word of 2020. "It validated the day-to-day achievements of the countless Indians who dealt with and survived the perils of a pandemic,” the Panel noted. “It gives a voice to the strength displayed by young and old alike in dealing with extended periods of isolation, lack of familial support, loss of livelihoods and other difficulties through sheer determination and self-reliance", the panel further added. Previous Oxford Hindi words of the year are Aadhar (2017), Nari Shakti (2018) and Samvidhaan (2019). Read more at: https://in.news.yahoo.com/atmanirbharta-named-oxford-hindi-word-of-2020-094259960.html
[3] Morrison, Wayne M. 2019. China’s Economic Rise: History, Trends, Challenges, and Implications for the United States, Congressional Research Service, Washington DC.
[4] For details, see: Kothari, Devendra. 2019. Nurturing Human Development: A Strategy for New India, New Delhi: Paragoan International Publishers.
[5] Kothari, Devendra, Decoding Modi’s Resounding Victory,
India Currents dated June 21, 2019. Read more at: https://indiacurrents.com/decoding-modis-resounding-victory/
