Analysis: Atma-nirbhar Bharat Abhiyan

Reading time: 8-10 minutes.

On the evening of May 12, when India was awaiting that Prime Minister Mr. Narendra Modi will address and extend the lockdown due to increase in the number of positive cases of Covid-19, he instead announced a special economic package of Rs. 20 Lakh Crore, which is nearly 10 per cent of India’s GDP that would be aimed to make India self-reliant (also known as ‘Atma-Nirbhar’ in Hindi) and closed days of Lockdown 3.0. A self-Reliant India is a nation which shall produce, manufacture and consumer its own products and services without relying on ‘global or international brands’.

This India shall be unconditionally dependent on local vendors, fruit sellers, ration shops, clothing brands etc. to fulfill its needs and make us brands give a global recognition. Magnifying his statement “Jaan bhi, Jahan bhi”, he contended that we need to protect ourselves and continue with our lives. He emphasized that the package has been designed by taking into consideration the interest of liquidity, laws, labors and land. He further addressed how the world looks up to India to lead this battle and this modern 21st Century shall be India’s time to stand out in the world.

Why is it introduced?

During Mr. Modi’s address, he explained how the world is in a critical stage and India needs to be a self-reliant nation amidst such pandemic. He explained the same with the help an illustration that when coronavirus pandemic started, India did not manufacture a single PPE kit or N-95 masks but now produces more than 2 lakh PPE kits and N-95 masks daily. This package shall also provide a reasonable boost for Abhiyaan through an improved structural reforms, technological interference and ease of setting up a business. Various reasons for the introduction of scheme can be explained in the following points:

  • To drift from Globalisation to Localisation:  To achieve self-reliant, sectors such as pharmaceuticals, food, leather, furniture, clothing industry, electronics, plastics, toys etc. shall revamp their processes of pronouncement to a local level which were earlier dependent widely on Chinese products. It is integral for Indian citizens to dependent on local market and supply chains to sustain Covid-19 pandemic. In order to attain this goal, the government shall offer pronouncement preference in contracts for locally produced goods to discourage the import of goods and services and offer tax sops. The end result was to encourage business and re-address the mission of ‘Make in India’ campaign started in 2014.
  • To increase the investment in health reforms and schemes: Catering the need of public sector and expenditure on health is call of the hour during the pandemic. It is integral for the government to invest more in grass root health institutions which shall be ramping in either urban or rural areas. Moreover, setting up of various hospital blocks for infected patients, corroborating the lab network system and surveillance by such public health labs shall be essential to manage pandemic.
  • Provide a boost in employment through MGNREGS: The Government has decided to invest around 40,000 Crore under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). It shall help the migrant workers to find work at rural places and this invest helped to provide almost 300 crore person days for the employees. Further, a creation of more durable assets shall boost the rural area’s economy and yield in a larger production.
  • To enable a technology driven education system: Schemes like PM e-VIDYA, Mandodarpan, New National Curriculum and Pedagogical Framework and National Foundational Literacy and Numeracy Mission shall be implemented post-covid pandemic. The National Foundational Literacy and Numeracy Mission, per se, shall ensure that every child has attained a normal learning level required till grade five by the year 2025 shall be introduced by end of 2020.
  • To support state governments: This package shall give special assistance to the state government as their borrowing limit has been increased from 3 to 5 per cent for financial year 2020-21. This shall enable state to borrow extra resources valued around 5 lakh crore. The borrowing, however, shall be limited to areas like One Nation One Ration Card, Electricity Distribution and Revenue to Urban local bodies.

Salient features

While explaining the pillars of a self-reliant India, Mr. Modi shed light on the devastion which occurred in Kutch, Gujarat post earthquake in 2001. Nonetheless, through determination and various integral resolutions, the place was set back in its feet. Similarly, the new Atma-Nirbhar India has said to be envisioned and build the nation on five pillars which are portrayed as its salient features which include:

  • 1st pillar – Economy: An Economy can be defined as a ‘state of a country, area or region which produces and consumes goods and services in exchange for monetary benefits’. After several weeks of lockdown, tragic losses of lives and several uncertainties on global market, the government and central banks are trying to prevent a deep and lasting recession. The idea of this scheme shall be to prosper the economy which takes quantum jumps not an incremental change. Economists are of an opinion that the countries should pursue food and energy supply on their own in a globalized world. It is integral for countries in pandemic to strive for balance between globalization and a degree of self-reliance.
  • 2nd pillar – Infrastructure: The economic infrastructure is the root of an economy as every business activity can only be established through a better communication, transportation, energy supply chains, distribution networks or financial institution. The Indian Government is of an opinion that the infrastructure serving in our country must be world-class and shall become the identity of India which is synonymous with the modern era of India. A special reference during pandemic is with regard to healthcare infrastructure by increasing number of hospital beds, medical equipment and intensive care units.
  • 3rd PILLAR – Technology driven system: In an economy, intervention of the technology has successfully helped in improved operations and lowered cost of setting up a business. The physical barriers to communicate over long distances have been overcome by the usage of internet. The technological advancement comprises of Artificial Intelligence, Machine Learning, robotics, data etc. Henceforth, in this 21st Century, where communication can be done virtually or telephonically, it is important for India to establish a system based on technology-driven arrangement to fulfill the dreams of being a self-sustained nation.
  • 4th pillar – Demography: The study of human population, including its size, growth, density, distribution and other vital part of statistics is known as demographic economics. India is regarded as the second most populous country in the world with nearly one-fifth of the world population. Indian Government believes that a vibrant demography shall be a great source of energy for a self-sufficient India. India is regarded as a young country with 50 per cent of its population below age of 25 and average age of an Indian as 29. This enables us to understand that India’s population is established more with independents and young working class.
  • 5th pillar – Supply and demand: In economics, supply and demand is a relationship between the quantity of goods or services that a producer shall wish to sell at various prices and the quantity at which consumer wishes to buy. The self-sustaining India shall witness a demand of goods, wherein the strength of demand and supply chain should be utilized in a full capacity. He stated that it is important to empower the supply chain and supply system by fulfilling the demand of consumers. The Indian supply system has been developed with the smell of our country’s soil and sweat of labor’s hard work.

Legal basis

Nirmala Sitharam, Finance Minister announced the package scheme in 5 tranches. These tranches were announced by her in the press conference, including Rs. 8 lakh crore measured in liquidity announced by RBI and Rs. 3 lakh crore guaranteed to small businesses for the purpose of loans. Subsequently, she explained how this special package will cater various sections in the society including factories, Self-Help Groups (SHGs), the middle class, MSMEs, industries etc.  The introduction of this scheme has introduced several amendments in interpretation, provisions and basis of law. This scheme has vividly examined and scrutinized the following arenas of laws and statues which can be stated as following:

  • Income Tax Act, 1961: The Act is administered to levy and collect the recovery on Income Tax. Several changes include the rates of TDS being reduced by 25 per cent and shall apply for the payments of dividends, contracts etc. Moreover, the date for filing of income tax returns has been extended to

30 November, 2020 which was earlier July 31 and October 31. The dates for tax audits have been extended from September 31, 2020 to October 31, 2020.

  • Micro, Small and Medium Enterprises Development Act, 2006: The MSME Act provides in order to promote and facilitate the promotion and enhance fair development of competitiveness in small and medium enterprises. The definition of MSME was redefined by abolishing it as manufacturing and service enterprise and merging under the same category. Moreover, there is an availability of approximately Rs. 3 lakh crore collateral-free loan for MSMEs. Rs. 5000 crores have been required for an equity infusion for MSMEs and various global tenders have been disallowed up to Rs. 200 crores.
  • Insolvency and Bankruptcy Code, 2016: The Code aims to protect the interest of small investors and makes the business process less burdensome. The current change in IBC is with regard to enhancement in ease of setting up and establishing a business now. The minimum threshold to initiate an insolvency proceeding has been raised to 1 crore, which was earlier Rs. 1 lakh in case of MSMEs. Section 240 A of IBC which states regarding an application of the code to micro, small and medium enterprises will also attain a special insolvency resolution framework and shall be notified soon. Further, there is a suspension of a new initiation of insolvency proceedings up to 1 year, until the pandemic situation gets better. The Code empowers the central government to exclude any debt suffered due to pandemic from the ambit of definition ‘default’ for the purpose of insolvency

proceedings.

  • Company’s Act, 2013: The Act regulates the incorporation of a company which ranges from various responsibilities of a company, its directors and dissolution of the company. With regard to a self-reliant India, a decriminalization of Companies Act as taken place. This includes violations involving the minor shortcoming or defaults in the procedure of Corporate Social Responsibility (CSR) Reporting, various unreasonable inadequacy in board reports, defaults in filing or a delay in Annual General Meeting (AGM). These amendments shall cause obstructions in the administration of Criminal Courts and National Company Law Tribunal (NCLT). Seven compoundable offences were taken off and five have to be dealt in an alternative framework.

The key reforms for business corporates included direct listing of the securities by the Indian public companies in foreign jurisdictions, provisions of producer companies of Company’s Act, 1956 in Company Act’s 2013, power to create additional or specialized benches in NCLAT and lower penalties for small companies. 

  • Real Estate (Regulation and Development) Act, 2016: The purpose of this act was to protect the interest of house-buyers and simultaneously increase the investments in real estate properties. In this scheme, an additional 6-month period has been given to government contractors to complete the pending projects. There has been an extension for the registration and completion of the real estate projects so that buyers can get their booked homes in time.
  • Essential Commodities Act, 1955: The Act is responsible to ensure a delivery and supply of goods without hoarding and black-marketing. The government has proposed an amendment to the act by deregulating the food items including cereals, pulses, onion, potato etc. Besides the deregulation, the Act shall provide a no stock limit to any produce. However, a limit can be imposed during exceptional scenarios like natural calamities etc.
  • Other Miscellaneous Laws:  The conference stated a proposal to implement a new law for the farmers to sell their products without any barrier to price. Further, a legal statute shall be enabled to aid framers engage with processors, large retailers, wholesalers etc. with a transparency.

Conclusion

The government by starting this campaign has led a true Swadeshi movement and resonates with Sangh’s philosophy to enrich and revolutionize Indian products. However, in the quest to attain a self-reliant India, it is necessary for the government to decentralize its policies, take decisions for rural crowd and labors, keep poor and underprivileged at priority, make environmental friendly policies that are rooted to make India an a self sufficient nation globally. In history, when India believed in the Gandhi’s model of self-reliance, wonders happened. He articulated it as a social interdependence and mutual co-operation in a society. On the contrary today, a virus has violated our independence, but we all shall ‘be vocal for local’ and adapt to new lifestyle of being mutually interdependent and become empowered.

Author: Aarushi Relan from Amity Law School, Noida.

Editor: Anmol Mathur from Symbiosis Law School, NOIDA.

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