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Prime Minister Narendra Modi on Thursday said the coronavirus pandemic has taught India a lesson in self-reliance as he exhorted industry to take bold decisions to convert the crisis into an opportunity rather than remain conservative.
Addressing the annual session of the Kolkata-based industry lobby Indian Chamber of Commerce, Modi said the time has come to take the Indian economy “from command-and-control to plug-and-play".
“This is not the time for a conservative approach—rather to take bold decisions and make bold investments going forward. This is the time to build a globally competitive domestic supply chain. For this, industry has to help all existing stakeholders of its supply chain to come out of the crisis and handhold them for greater value addition," he added.
Modi said India must convert the crisis into an opportunity and make it a turning point to build a self-reliant India in sectors such as medical equipment, defence manufacturing, core and minerals, edible oils, fertilizers, electronic manufacturing, solar panels, batteries, chip manufacturing and aviation sector.
His remarks come against the backdrop of former chief economic adviser Arvind Subramanian’s criticism of the government’s approach to self-reliance through import substitution. Subramanian last week said India must shed its protectionist attitude and find a way to be internally competitive in order to become an exporting economy in a challenging post-covid world, describing the notion of a self-sufficient exporting powerhouse as an oxymoron.
In his speech, Modi said self-reliance means India has to minimize its dependence on other nations. “India should manufacture all those products that it is forced to import and make efforts to become an exporter of those products in future. We have to work in this direction at a faster pace. We have to restrain our habit of importing such items that India’s MSMEs and self-help groups produce," he said.
Speaking at the annual meeting of the Confederation of Indian Industry last week, Modi pledged to accelerate structural reforms to boost growth prospects as the Indian economy heads into a recession that some forecast will be the deepest since Independence.
S&P Global Ratings on Wednesday said while risks to India’s long-term growth rate are rising, ongoing economic reforms, if executed well, should keep its growth rate ahead of peers. The rating agency retained India’s lowest investment grade (BBB-) credit rating with a stable outlook as it expects the economy and fiscal position to stabilize and begin to recover from 2021 onwards.
The rating agency expects the Indian economy to contract 5% in FY21 while the World Bank has projected Asia’s third largest economy to shrink by 3.2% during the year. The Organisation for Economic Co-operation and Development (OECD) on Wednesday said India may contract by as much as 7.3% in FY21 in case of a second wave of coronavirus outbreak in the December quarter, needing new containment and strict social distancing measures.