Prime Minister (PM) Narendra Modi mentioned self-reliance no less than 17 times in a broadcast to the nation. This has prompted fears that India will resort to protectionism again, in spite of its dire experience during the licence-permit raj. In those days, protectionism protected the inefficient and corrupt. But it need not necessarily have that outcome. China has practised protectionism during its 30-year climb to becoming the world’s second-largest economy. But the Chinese have had the self-confidence to practise protectionism selectively and in their own way, to fit their requirements, often ignoring global trends and the advice of the World Bank. Self-confidence has led China to become the factory of the world. India, post the 1991 reforms, followed the World Bank’s advice and liberalised trade whereas it should have concentrated on improving the productivity and competitiveness of its manufacturing sector and lifted protections gradually.
It seems to me that India will not achieve self-reliance until it gains the confidence to go its own way to exploit the unique assets it has, which are, all too often, seen as liabilities. Take the example of India’s population. It’s usually regarded as a liability, an economic disaster rather than an economic dividend. But foreign investors see the population as a vast potential market. As a result of its lack of the self-confidence to pursue its own path, India has failed to exploit this asset and so has had to rely on imports to meet demand.
Sunshine is a good example of an asset India has allowed China to develop. In 2019, India imported solar equipment worth 1694.04 million dollars. The motor industry is a rare example of India competing internationally. The most successful company, Maruti, has had the self-confidence to introduce a totally different model of working, the Japanese model.
At a time when politicians are demonstrating all that is wrong with Indian democracy, the naked greed and ambition which makes a farce of the party system, it might seem absurd to regard Indian parliamentary democracy as an asset. Inevitably, the many advocates of a presidential system claim the present antics of politicians are yet more evidence that India would be better governed by a president rather than a prime minister. But India has a parliamentary Constitution which it can rightly be proud of. It is a Constitution that is remarkable among post-colonial constitutions for its longevity which has been widely admired internationally. That should be a matter of pride for India. The Constitution has also provided stability, which is a prerequisite for economic development based on self-reliance. In its early years, the Constitution also proved its suitability. The renowned historian of India’s Constitution, Granville Austin, ended his first book, published in 1966 with the optimistic words, “…equipped with basic qualifications, attitudes and experience for creating and working a democratic constitution, Indians did not default their tryst with dynasty.” But instead of taking pride in the Constitution, the institutions which uphold it were gradually undermined, and so in 1999 Austin ended his second book on the Constitution calling for “extensive social and economic reform.” Unfortunately, India has not had the self-confidence required for taking the hard decisions to carry out those extensive reforms, and that’s where the problem lies, not with the Constitution.
To achieve self-sufficiency, India has to turn its attention to those extensive reforms. It has to reform the bureaucracy so that bureaucrats are not derided as babus, and its politics so that politicians are not dismissed as opportunists. In managing its economy, India has to have the self-confidence to learn from other countries as Maruti has learnt from Japan. It has much to learn from China’s model of development. But in the end, India must have the self-confidence to chart its own course and work out its own path to self-reliance.
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