Privatization in India Due to Covid-19
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This Blog is written by Rashi Aggarwal from Delhi Metropolitan Education, Noida. Edited by Ravikiran Shukre.
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INTRODUCTION
The 20 lakh crore Atmanirbhar Bharat Scheme by the government was announced in different phases by finance minister Nirmala Sitharaman. The first mention of this scheme came as a “self-reliant India Mission”, the main aim of this scheme is to cope up with the economy which is being affected in a very bad manner during the pandemic lockdown period. It doesn’t mean cutting off from the rest of the world.
The scheme has also been called by many as a re-packed version of “Make in India” as it is almost similar to this movement. The growth of India’s “personal protective equipment” (PPE) kit from zero before March to 1,50,000 in the month of May is the best and fine example of a self-reliant scheme. Other sectors. where this scheme has benefited are SAIL for the steel industry, IITs for technology and development, AIIMS for medical science, DRDO for defense research, HAL for aviation, ISRO for space, etc.
Though the scheme was explained to the public in different phases on different days with various press conferences, the main focus of this article would be on the fourth tranche of the scheme which generally focuses on 8 structural sectors. namely coal, defense production, minerals, air, space management, airports, power distribution, atomic energy, space sector, and social infrastructure.
REFORMATION IN COAL & MINERALS
Introduction of commercial mining in the coal and mining sector implying to the removal of monopoly. Rs. 5,000 crore worth infrastructural development has been proposed while energy norms will be liberalized 50 blocks will be put for auction immediately.
Enhancing private investments in the mineral sector. A seamless composite exploration-cum-mining-cum-production regime to be introduced. 500 mining blocks would be affected through an open and transparent auction process. The ministry is in process of making a mineral index for different minerals.
REFORMATION IN DEFENSE
Self-reliance in defense production will reduce huge defense import bill via “Make in India”. A notification on the ban of a list of defense items for imports will be released. FDI limit in defense manufacturing under automatic route raised from 49% to 74%. Corporatization of the ordnance factory board was also announced.
REFORMATION IN SPACE
Restriction on the utilization of Indian Air space to be relaxed, construction of new world-class airports. Plan to make India a global hub for aircraft maintenance, repair, and overhaul. Rs. 13,000 crore private investment expected in 12 airports. Rs. 1,000 crore benefit to the aviation sector on an annual basis.
Private participation in space must be encouraged while the government is working on liberal geospatial policy. The private sector would be co-traveler in India’s space journey through launches, satellite missions.
REFORMS IN POWER DISTRIBUTION
New tariff policies and privatization for power distribution companies in UTs, strengthening industries, and bring efficiency.
BENEFITS TO MSMEs
Collateral Free Loans Worth Rs. 3 Lakh Crores for MSMEs:
A time period of four months is given for these loans and for enterprises till October end. Also, the government will provide a 100% credit guarantee cover to banks and NBFCs on principle and interest. This is expected to benefit 45 lakhs enterprises.
Rs. 20,000 Crore Debt for Stressed MSMEs:
It will help MSMEs which are either non-profit assets (NPA) or financially stressed. It will likely to benefit 2 lakhs MSMEs.
Revised Definition of MSMEs:
This scheme will result in more number of MSMEs and to grow more MSMEs without losing the current benefits. In addition to this, differentiation between the manufacturing and service sectors is removed and the same limits for the manufacturing and service sector have been introduced.
E-Market and MSMEs:
This will help MSMEs to reach out easily to people. It will be an opportunity for them to stand out in the market where the public is easily available.
SIGNIFICANCE
The coming of the self-reliance scheme has largely affected the economy. It helped in lifting-up the falling down economy and GDP of the country. But, at the same time, the opposition felt for the availability of money in all the sectors, as the scheme is very huge and if most government finance is included in this project then it would further affect the economy. Also, it has been noticed as a country like India who mostly depends upon china for it’ s products is now making it’ s own products. India is mostly depending on china and imports more than half of it’ s products from china, but due to COVID-19 it is not possible and so India has started producing its own goods.
CONCLUSION
The scheme is not a fully new scheme but is inclusive of measures announced by Reserve Bank of India in March 2020. The package will also provide food grains to migrant workers who couldn’t benefit from earlier schemes. For making this scheme easier, one nation one ration card scheme was also compiled with this. Also, the Finance Minister requested the states to implement with the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA).
In this era of social networking, any news can be easily spread to the masses and people can provide their views immediately. Similarly, happened in the case of coming-up of this scheme, as Prime Minister announces the scheme it was trolled everywhere on social media platforms and also various jokes were made on the name of the scheme while it was appreciated by the people after knowing the details and inner-view of the movement.
ANALYSIS
The self – reliance scheme came as a helping tool to lift-up the falling economy, and in some aspects, it also got success like some low-class laborers. never wanted privatization as with this their art and skills won’t be appreciated, but the scheme helped them with this issue. Also, India starts depending upon its raw products that they earlier used to import from other countries.
But, still, somewhere scheme fails to protect the labor laws and the rights of workers. Also, insufficient government expenditure. The main reason behind this was that Rs. 20 lakh crores are almost 10% of the GDP out of which 1.7 lakhs scheme was announced in the month of March. The fact is that the government has decided to invest in the business to create jobs for wages and salaries instead of providing direct compensation.