India Inc's Path Towards Being Atmanirbhar
While India remains to be one of the fastest-growing economies in the world, the pandemic created an unexampled impact on individuals, enterprises and the government alike
Since economic reforms in 1991, India has come a long way to become a $3.1 trillion economy today. Strong structural and policy changes have led the Indian economy to grow nearly nine times from just $266 billion in 1991, and compete with matured economies such as the US, China, Japan, Germany and the UK. This growth has been largely led by India's private sector, which has been the instrument of driving innovation, competitiveness, employment, capital and growth in the economy.
While India remains to be one of the fastest-growing economies in the world, the pandemic created an unexampled impact on individuals, enterprises and the government alike. India's GDP slipped by a sharp 23.9 per cent in the first quarter of FY21 led by lockdowns and restrictions on movement. However, in spite of supply chain challenges, trade conflicts and geopolitical tensions, India Inc demonstrated agility and resilience to overcome the crisis through innovation and digital transformation. When we faced an acute shortage of protective products, India Inc repurposed factories to amp up the supply of sanitizers, masks, disinfectants, etc. Similarly, as consumer needs altered during the pandemic, most businesses quickly pivoted to cater to emerging markets.
Simultaneously, the government of India launched the 'Atmanirbhar Bharat Abhiyaan' to create a foundation of self-reliance to revive the economy, and potentially thrive in adversities. While efforts in 1991 were towards making India a globalized economy, today the focus has shifted to build a self-reliant India which can flourish in global competition.
Government aid in structural reforms
The government of India announced a slew of structural reforms and policy push under the Atmanirbhar Bharat Mission to facilitate the ease of doing business in India. These reforms gave a stronger impetus to bolster domestic manufacturing, strengthen supply chains, foster innovation and entrepreneurship, generate employment and institutionalize skill development to be future-ready. A stimulus package worth INR 20 lakh crore was also introduced to boost the Atmanirbhar Bharat mission.
To enhance India's manufacturing capabilities and exports, the GoI introduced the Production-Linked Incentive (PLI) Scheme to make Indian manufacturers globally competitive and the country an integral part of the global supply chain across sectors. The electronic manufacturing sector is an example of the policy's multiplier effect. Today, with import substitutions, India exports mobile phones worth $3 billion.
While many policies were tweaked, the New Education Policy is a key reform to tap into economic growth through India's youth. The new policy will meet the changing requirements of quality education, innovation and research. This will further enhance India's strong technical and engineering capabilities, making India a knowledge superpower.
Role of startups in making India self-reliant
Today, Indian startups in every sector have been fostering innovation to build affordable yet world-class products and services which can compete with global players. Over 69,000 startups in India are together creating an ecosystem that enables self-reliance, self-sustenance and determines the future of our economy. The startup ecosystem has proved its agility and resilience in recent years where it addressed the challenges of the pandemic despite the disruptions. The period actually became a turning point for Indian startups to replace reliance on global suppliers by producing innovative made-in-India products and services.
Startups also accelerated digital transformation to Bharat. This has enabled job creation in smaller tier II, tier III cities of India, reducing migration to metros to find employment opportunities. With 69,000-plus registered and lakhs of unregistered startups spread across 640 districts, the number of employment opportunities has substantially increased. This has also improved standards of living for people employed in both the formal sector as well as in the gig economy.
Job creation and employment have also been a fundamental charter of the Atmanirbhar Bharat Mission. The fact that startups have generated over 700,000 jobs since 2016 in just the formal sector is another big step towards a self-reliant India.
Beyond traditional employment
India Inc has also contributed to the growing gig economy of the country which employs over 15 million gig workers today. On the flipside, these gig workers have enabled India Inc to grow their businesses effectively. Today, organizations have realized the need to embrace the gig economy to stay relevant and agile. These organizations now venture beyond commonly known last-mile delivery gigs which employ blue-collar workers. They are increasingly looking for gig partners for roles in operations, business development, HR, sales and marketing, business analytics, etc. The gig economy allows organizations to hire talent on-demand on contractual basis, helps reduce costs on fixed expenses, offload work on a large scale and access to a wider talent pool that is location and age agnostic. The rapid adoption of gig platforms by consumers and enterprises is enabling India's large population of unemployed and underemployed individuals to contribute to economic growth.
Both gig platforms and the government are working towards organizing this sector to harness the untapped potential of India's population. Formalization of the gig economy, along with new policy reforms in labour codes will allow more people to join the gig economy, and reduce attrition in the sector. As the gig economy matures in India, gig platforms will not only solve the challenge of unemployment, or enable growth for enterprises: it will also become a service that can be leveraged globally. With the interplay of tech and human resources, India can become a global hub for service export which goes much beyond IT.
In order to capitalize on manpower, skill development (upskilling, reskilling and multi-skilling) will be the backbone of a self-reliant India. With stronger integration of technology in our lives, it is imperative for the workforce of the future to gather evolving 21st century skills. While the government has built an online learning ecosystem with initiatives such as National Skill Qualification Framework, DESH-Stack eportal, etc; it will be the collective responsibility of India Inc, gig platforms, and the government to upskill, reskill and multi-skill people.
While India Inc was already moving towards a self-reliant India by creating world-class products and services for the world in its home turf, the economic philosophy of Atmanirbhar Bharat from the GoI provides a framework to build on. Policy reforms in the next few years will be integral in creating a conducive ecosystem driven by R&D, innovation, entrepreneurship, employment and skill development to present competition overseas.