It was at this time that self-reliance was seriously considered, to get out of the clutches of foreign countries and to save precious foreign exchange, serious planning was required. The Socialist bloc of countries had set the ball rolling with the idea of public sector enterprise. This was the idea mooted in our country too to provide self-reliance and employment, both. The main idea was the democratic and socialistic norm of economic equality. A dream which remains unfulfilled till date with the yawning gap between the rich and the poor widening further. Yes, initially it did serve the purpose of reducing our country’s dependence on foreign exchange and loans, but later we thoroughly bungled in managing our units, due to rampant corruption, bureaucratic incompetence and the political looting is another matter.
Concept of Self-Reliance
The concept is sometimes confused with Self-sufficiency. Self-sufficiency simply means that a country need not depend on other sources to fulfill the needs of its citizens and enterprises. That the country produces all the goods and services it requires without depending on others. Self-reliance, on the other hand, implies that the country generates sufficient surplus to buy what it needs and therefore, it does not have to bank upon the loans and aids of outside organizations or countries for resources or funds to acquire them.
While self-sufficiency rules out imports, self-reliance allows a country to import, provided it has the capacity to pay for it. The difference between the two terms has been excellently defined in Hannan Ezekiel’s statement: “Planning documents contain many examples of statements, in which, after declaring self-reliance to be the objective in one sentence, the next and subsequent sentences go on to show how it is proposed to achieve self-reliance.”
Even after two decades of India’s Independence, self-reliance could not be adopted in the sense of ability to pay for its imports. The requirement of food grains was necessary as the internal production was short. Technology and development needs had to be supplemented by procurement in foreign exchange. The problem was that there was no export surplus to pay for these imports and this need was supplemented by aid from the World Bank and developed countries. Foreign aid was thus used to pay for excess of imports necessitated by economic development.
This vicious circle of aids however dulled our capacities of domestic effort. In one case we were being blackmailed and arm-twisted by USA who were supplying food grains under P.L.480 and this really shook us up in 1965 when the approval started being made on a month to month basis. Besides, all foreign aids, except that received from international agencies, was in the form of tied aid. According to Dr. V.K.R.V. Rao, the cost of these tied foreign aids was 10 to 12 percent higher than world market prices for the same goods.
Dr. Manmohan Singh, former Finance Minister says: “Developing countries can no longer rely on increasing flows of concessional assistance and Self-Reliance must be defined in terms of country’s ability to sustain a reasonable rate and pattern of economic growth without excessive dependence on external resources supplied on concessional terms.”
The strides made towards self-reliance by the private sector are indeed commendable. They have been as efficient as the best in the world. Just the opposite of our public sector where the viability, profitability and production output is the least concern. Accountability is one of the prime factors which makes the Private Sector viable. The staff and management are equally responsible and answerable for lack of optimum output. Promotions and continuity of jobs depend on the qualitative analysis and working of personnel. Contacts and political affiliations are not the considerations. All these are lacking in the Public Sector where no one is accountable. Lack of qualitative output, inordinate delay and wrong pricing mechanism have led to accumulation of stocks, lack of sales, improper publicity, obsolete machinery together with lack of maintenance. These have led to continual losses suffered.
Lack of proper man-management is another factor in the Public Sector. Top heavy bureaucracy and a huge task force have also led to an improbable salary structure. Flattery and political clout are the main qualities looked for during appointments for jobs. An example of this is the National Textile Corporation having around 100 sick textile mills under its charge. These have constantly been running up huge losses with miserable quality and output.
Railways is one of the largest in the world and probably carrying the highest number of passengers daily, is another example where an enterprise, which had been raking in considerable profits over the years, is now running into huge losses every year. In spite of the lack of quality input, a survey of 2nd class amenities including compartments, facilities and services have pointed out to minimum input and blatant corruption, the fare structure has been continuously raised over the years and with the exploding population more passengers, still the Railways suffer losses. All because of political interference and indifferent attitude. In short no accountability. The media has tried to highlight the failings over the years but our political system has been marked out by economic mismanagement. The Maharajas and Nawabs of yore have made way for the politicians and bureaucrats who are today enjoying comforts and luxuries all at public expense.
The myth of socialist economy and economic equality has been exploded and the common man has reaped the benefits. The Communist countries are a sordid example of this entire where ultimately the proletariat has revolted and dug the grave of a system where it was inculcated and took root.
Self-reliance in our country has been mainly due to the private sector and today, the government has woken up to the futility of public enterprises. Efforts of privatization are in full swing but what needs to be looked into is that even the profit making units are being bartered away for a fraction of what they are worth. Again self interest and political mileage have become the main factors. They were held back when there were several offers amounting to considerable sums and profits and are being given away at fractions of earlier offers now.
Our country has been blessed with a bounty of natural resources which is being exploited for self-reliance. Luckily, the private sector has been successful in making the country self-reliant in agricultural products, textiles, steel, computer software, fertilizers and heavy industries. We have reached the extent of having surplus production in several sectors and able to earn necessary foreign exchange.
The country is also self-reliant in most of the modern technologies and we are having the best engineers, doctors and scientists in the world. Unfortunately, there has been considerable brain drain due to wrong policies of the political system. The brilliant brains are shifting to greener pastures in foreign countries the moment they pass out from our IITs, IIMs and Medical Colleges. Why have we not been able to provide them with the facilities they deserve and are offered by other countries? After all, the government spends considerable sums of money in subsidizing their education. Most of our professional colleges are state funded and without subsidy, the cost of education would be very expensive. There should be strictures before allowing admission, of a minimum of ten years service to the country. Without such stringency we are losing our best brains to other countries after nurturing them for years.
Economic reforms in several sectors have been continually planned, the success of which depends on compatibility and proper implementation. The Ninth five year plan which is currently applicable till the Tenth plan has the following objectives.
Estimated production increase including oilseeds namely soyabean and groundnuts. National Agricultural Technology project launched rainfed agriculture programme from National Watershed Development Project, Kisan credit card scheme to make adequate and timely credit available to farmers. Priority sector category to food processing sector for receiving credit from banks and financial institutions.
Fast-track review of Public-Sector units under the department of Heavy Industry has been initiated with a view to make them economically viable. Several items like coal, lignite, petroleum and its distillation products, sugar and other bulk drugs have been delicenced. Foreign equity has been permitted in the power generation sector, transmission also been opened for proper maintenance and equity participation. This will facilitate proper movement of goods. A monitoring unit has also been set up for smooth implementation of large projects involving foreign direct investments.
Steel and Mines:
The bottlenecks involved in exporting steels has been a major deterrent in increasing exports. A steel exports forum has been set up to oversee this aspect. The Steel Authority of India effected a saving of about Rs. 500 crore. The mining sector has been opened for foreign direct investments.
Commerce and Technology:
New directions have been issued for disinvestment of Public Sector Units. Information Technology sector got special tax cuts and duty exemptions. Threshold limit for EPCG scheme reduced to Rs. 10 lakh for software sector and to Rs. 1 crore for electronics, food processing, garments, leather export goods, gems and jewellery sector.
Transport and Aviation:
Private Sector and FDI approved for participation in ports and surface transport. Decision for disinvestment of Air India and Indian Airlines.
Technology Up gradation Fund Scheme (TUFS) for modern textile and jute units. Cotton Technology Mission to be launched soon to improve production.
Development and Employment:
Development activities in Sikkim and North Eastern States to be funded from a reserved Central pool. Jawahar Rozgar Yojna vigorously followed up to the tune of Rs. 2000 crore, to generate employment and self-reliance. Employment, Assurance Scheme under States generate further employment, Rs. 1000 crore released to states.
The economy has suffered heavily at the end of the last Millennium (1998-1999). Post-Pokharan II, India remained more than isolated, Economic sanctions and ballooning South East Asian currency crises sent the economy into a recession spiral. The country’s crises sent the economy into a recession spiral. The country’s grading was down rated by foreign agencies but what saved the day was our flexible economic policies. The success of Resurgent India Bonds which raised more than 4 billion dollars partially mitigated the impact of economic sanctions imposed on India after Pokharan II.
The progress and objectives of our self-reliance policy has definitely shown the right pat and saved our economy which if not at the level which should have been attained, has at least saved the day and made the other more developed countries sit up and take notice of the country – A Resurgant India.