Atmanirbhar Bharat Abhiyan: Building a Self-Reliant India

The Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission) is an initiative launched by the Government of India to transform the nation into a self-reliant economic powerhouse. Amid global uncertainties and supply chain disruptions, especially highlighted by the COVID-19 pandemic, this mission seeks to reduce India's dependency on imports and boost domestic production. It is built upon five key pillars: Economy, Infrastructure, System, Demography, and Demand, which together aim to make India more resilient and competitive on the global stage. This blog explores the initiative’s focus areas, including support for MSMEs, agricultural reforms, and incentives for manufacturing, along with data-driven insights into how these reforms contribute to India's self-reliance.

1. Strengthening MSMEs: Backbone of the Indian Economy

Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in India's economic fabric, contributing around 30% to India’s GDP and generating approximately 45% of manufacturing output. Recognizing their importance, the Atmanirbhar Bharat Abhiyan emphasizes robust support for the MSME sector through financial incentives, reforms, and policy changes.

Key measures include:

Revised MSME Definition: The reclassification of MSMEs allows for greater flexibility and better access to finance. Under the new definition, micro-units have a turnover limit of ₹5 crore, small units up to ₹50 crore, and medium units up to ₹250 crore, enabling more businesses to benefit from the reforms.

Collateral-Free Loans: The government has earmarked ₹3 lakh crore in collateral-free loans for MSMEs, aimed at helping 45 lakh units restart their businesses post-pandemic. This initiative is vital in providing liquidity to MSMEs, ensuring their survival and encouraging further growth.

Increased Market Access: The Abhiyan promotes digital platforms and e-market linkage for MSMEs, reducing their dependency on physical infrastructure. It also reserves government procurement tenders up to ₹200 crore exclusively for domestic MSMEs, boosting their opportunities in public procurement.

These reforms are already showing results. For instance, India's MSME exports have reached $76.29 billion during the first half of FY 2023-24, a notable increase from the previous years. This trend indicates the potential of MSMEs to drive India's export capabilities and strengthen its domestic manufacturing base.

2. Agricultural Reforms: Transforming India's Rural Economy

Agriculture remains the largest source of livelihood for nearly 58% of India's population. The Atmanirbhar Bharat initiative recognizes the importance of this sector in achieving self-reliance and has implemented several reforms to enhance productivity, market access, and income for farmers. Key reforms include:

Agriculture Infrastructure Fund: A corpus of ₹1 lakh crore has been established to develop infrastructure like cold storage, post-harvest facilities, and supply chain logistics. This fund aims to reduce post-harvest losses, which currently stand at around 4-5% annually, thereby increasing the availability of agricultural produce.

E-NAM Expansion: The expansion of the National Agriculture Market (e-NAM) has created a unified national market for farmers, allowing them to sell their produce directly to buyers, thus reducing middlemen and ensuring better price realization.

Promotion of Contract Farming: Through reforms in the Essential Commodities Act and the introduction of contract farming, the government has encouraged investment in the agricultural sector. This approach helps in ensuring stable income for farmers while attracting private investment in agricultural processing.

These measures are already making an impact. According to government reports, agricultural exports increased by 16.5% in FY 2022-23, reaching a value of $50 billion. The reforms are helping to position India as a major player in global agricultural markets while ensuring food security domestically.

3. Incentives for Manufacturing: Building a Global Manufacturing Hub

Manufacturing is central to India's goal of becoming a $5 trillion economy. The Atmanirbhar Bharat Abhiyan places a strong emphasis on boosting domestic manufacturing capabilities to reduce import dependency, especially in critical sectors such as electronics, pharmaceuticals, and automotive. The government has introduced several initiatives under this pillar:

Production-Linked Incentive (PLI) Scheme: The PLI scheme, with an outlay of ₹1.97 lakh crore across 13 key sectors, aims to boost manufacturing in areas like electronics, automobiles, and pharmaceuticals. For instance, the electronics PLI has attracted investments worth ₹11,000 crore, creating around 22,000 direct jobs.

Focus on Electronics Manufacturing: India imports a significant portion of its electronic needs, with around $59 billion in electronics imports in 2019. The PLI scheme, alongside other measures like the "Make in India" initiative, aims to establish India as a hub for electronics manufacturing, reducing this import dependency.

Boosting Pharmaceutical Production: The mission has also identified pharmaceuticals as a key area, with a focus on reducing India's dependency on Active Pharmaceutical Ingredients (APIs) from China. The PLI scheme for the pharma sector has led to the establishment of new manufacturing units, boosting India's capacity to produce critical drugs domestically.

These initiatives have contributed to a positive shift in the manufacturing sector. India's manufacturing PMI (Purchasing Managers' Index) reached 57.8 in September 2023, indicating strong growth in the sector. Moreover, India's exports of engineering goods, a key indicator of manufacturing strength, reached $112 billion in FY 2022-23, reflecting the positive impact of these incentives.

4. Reducing Dependency on Imports: Towards a Self-Reliant India

One of the core objectives of the Atmanirbhar Bharat Abhiyan is to reduce India's dependency on imports and promote self-reliance. This goal is being pursued through policies that encourage domestic production, innovation, and export growth:

Reduction in Imports of Critical Products: India has successfully reduced its dependence on imported PPE kits, ventilators, and testing kits during the COVID-19 pandemic by rapidly scaling up domestic production. Similarly, in the electronics sector, domestic manufacturing has helped reduce imports of mobile phones by 90% over the last five years.

Encouraging Renewable Energy: India’s focus on solar energy manufacturing through the Solar PLI scheme has reduced imports of solar panels and other components. India aims to achieve 280 GW of installed solar capacity by 2030, with significant emphasis on local manufacturing, which is expected to reduce import bills by approximately $42 billion by 2030.

Boosting Export Competitiveness: The mission’s focus on promoting quality, branding, and product standards has helped Indian products gain a foothold in international markets. India’s merchandise exports reached a record high of $447 billion in FY 2022-23, driven by sectors like textiles, chemicals, and engineering.

A Roadmap for India’s Future

The Atmanirbhar Bharat Abhiyan represents a comprehensive roadmap for India’s economic transformation. By focusing on key areas such as MSME support, agricultural reforms, and manufacturing incentives, the initiative is building a foundation for sustainable growth and reducing India's dependency on imports. The data clearly shows that India is making significant strides in achieving self-reliance, creating a resilient economy that can withstand global shocks.

While challenges remain, including the need for skill development and improving ease of doing business, the vision of a self-reliant India is steadily becoming a reality. With continued focus on innovation, investment, and reforms, India is well on its way to becoming a major player in the global economy, rooted in the principles of self-reliance and sustainable growth. The journey of Atmanirbhar Bharat is not just about reducing imports—it's about building a stronger, more resilient India for future generations.