Author: Swati Nitharwal, IV year of B.A.,LL.B.(Hons.) from Amity Law School, Noida
According to the data of the Center for Monitoring India’s economy, 7.5 million people[1]have lost their jobs since the pandemic. The COVID-19 pandemic had a great impact on the economies of the world, including South Korea, China, the USA, and India. These countries had a major slowdown in the economy. Due to the lockdown across the world economies are in danger. While this is a threat not only to India but to the world. However, I believe this could become an opportunity for India if we adopt the method of de-globalization properly. Although India had followed the policy of globalization in the past, when we look at the current situation of COVID-19 it is a rational approach to uplift the economy.
Today, de-globalization means increasing globalization in an economy or advancing globalization through digitization. Increasing tension between China and the US has opened the window of opportunity for countries like India, Vietnam, and Cambodia for multinational companies (MNCs) as these countries provide much cheaper labour as compared to other countries. Digital globalization is all about digitizing cutting-edge industries so that they cobble services and products at very low cost, disposing of the want to import them from overseas. While evolved and growing countries are equipped for this kind of change, many underdeveloped countries are lagging away behind. Today, a virtual economic system has emerged as a sort of measure to check a nation’s financial prowess and its global competitiveness.
You must be thinking how can India influence de-globalization in the post-pandemic world? I will be giving three reasons which will ultimately lead to a huge influence on de-globalization. These are as follows:
The first and most important is India’s full-size statistics technology (IT) workforce. Over 1 million Indian IT specialists are hired in approximately 80 nations across the world. Leading Indian IT corporations like Infosys, Wipro, TCS, and Tech Mahindra are already providing offerings to worldwide customers in synthetic intelligence, blockchain, and cloud computing.“The IT industry is growing at 7.7 % on a year-on-year basis and generates revenues at the estimate of $ 190 billion. This ultimately leads to the generation of approximately 4 million jobs and provides indirect employment to 10 million”[2].
Now, imagine how many IT professionals are required in the world. India has a dual role to play. Firstly, IT forces digitize industries around the globe, and secondly, the Indian villages will also go through huge digitization. As the Indian IT sector builds robotics in the western world has immense value in making them self-reliant, Indian entrepreneurs will also make India self-reliant by embracing automation. To be honest Indian entrepreneurs have unique business opportunities that are only applicable to Indian citizens. The upcoming industries in India will be massively digitized.
Secondly, not only do we need to depend on multinationals to invest, but the government needs to focus on formulating strategies that encourage local SMEs and MSMEs to increase their investments. Rather than spending money on loss-making PSUs, the government should redirect those funds to support next-generation Indian businesses that can take on the world.“In 2019, 16.3% of graduates are unemployed. This ratio was followed by individuals with postgraduate degrees or above with a share of 14.2 percent”[3]. The unemployment rate in India is higher among the youth who even have education qualifications. This can be used in favour of the country by providing these unemployed students funding for startups could make this situation better for not only India’s economy but these unemployed students as well.
For instance, a seed fund of Rs. 1,000 crores[4]are to be given to startups to provide them with initial capital to start their business said Prime Minister Modi and he also said, “India is one of the largest nations in the startup ecosystem today, with more than 41,000 startups involved in one mission or another in the country, with nearly 5,700 in IT and 3,600 in healthcare and 1,700 start-ups in agriculture”.This could be a great opportunity to reduce not only unemployment but also reliance on other countries for opportunities.
Now you must be wondering what would happen to the agriculture sector if the villages disappeared. This is a great opportunity for vertical agriculture, which is already taking shape in many countries. In addition to being hi-tech, these farms are isolated from the rain and free the villagers from the burden of growing food so they can become part of the force to build digital India. Digital agriculture will change the landscape of the Indian economy shortly. Government. As we know India is one of the largest exporters of various agricultural products such as rice, tea, meat, and dairy products.
In addition, India is currently specialized in exporting 21 other agricultural products such as honey, potatoes, grapes, soybeans, peanuts, and others. As a result, there has been a strong increase in demand for internationally listed products. However, due to the pandemic, demand will not be met. With this in mind, “Union Minister for Agriculture Narendra Singh Tomar confirms that the Ministry will fund 234 new agricultural businesses”[5]. The total funding of Rs 24.85 million under a core program will go to agriculture and allied sectors. The government is working to maintain the incubation ecosystem under the Rashtriya Krishi Vikas Yojana[6] (RKVY) and has already funded 112 startups with Rs 11.85 crore. These new agricultural start-ups were trained in 29 agricultural businesses incubators across the country. In total, the ministry has financed 346 startups with a total of 36.71 billion rupees. By providing financial support to startups, it will increase its potential to increase exports. Apart from this India should deepen its international trade cooperation in agriculture by reducing tariffs and removing barriers to entry. All these factors will ultimately lead to the benefit of farmers and small start-ups in the agriculture sector.
Suggestion
An initiative taken by the Indian government of Make in India is a good initiative. It should be stepped up to focus more on the electronics industry as well. The government should offer Indian manufacturers more help in setting up and expanding their plants. In addition to the mere construction of factories and production units, it is currently important to invest in innovation. Countries like China and the US dominate the market because they have large IP banks. If India is to be globally competitive, we need to increase innovation domestically. We have a huge demographic dividend, and we can certainly use it to innovate and build an intellectual property regime. Another focus will be the defence electronics and telecommunications industry. Government should identify 3-4 champions in each sector and provide funding for R&D, and the military should also be encouraged to watch these private sectors whether they meet their needs. The government also needs to restructure the arms industry's power supply units throughout the country. Due to the situation of pandemic Implementation of 5G networks worldwide has not been done. This allows India to build local 5G telecommunications equipment. The government should develop a 5-year strategy and plan of action by listening to companies that are in the industry. Now, only time will tell whether the decision of India of de-globalization was the opportunity of self-reliance or self-destruction!
[1]Over 7.5 million people lose jobs in April as lockdowns bite: CMIE, available at:https://www.business-standard.com/article/economy-policy/over-7-5-million-people-lose-jobs-in-april-as-lockdowns-bite-cmie-121050301171_1.html( last visited on May 31, 2021).
[2]India 74 Years: From Freedom to free market
How the IT sector has emerged as a pillar of modern India, Availableat:https://www.thehindubusinessline.com/news/national/how-the-it-sector-has-emerged-as-a-pillar-of-modern-india/article32357389.ece( last visited on May 31, 2021).
[3]Why India Should Worry About Its Educated, but Unemployed, Youth, Available at: https://gdc.unicef.org/resource/why-india-should-worry-about-its-educated-unemployed-youth( last visited on June 1, 2021).
[4]PM Narendra Modi announces Rs 1,000-crore 'Startup India Seed Fund', available at: https://m.economictimes.com/tech/startups/pm-narendra-modi-announces-rs-1000-crore-startup-india-seed-fund/articleshow/80304710.cms(Last visited on June 1, 2021).
[5] GOI to Fund 234 More Agri start-ups with a 24.85 Crore Fund, Available at: https://mediastory.in/goi-to-fund-234-more-agri-start-ups-with-a-24-85-crore-fund/(last visited on June 1, 2021).
[6]Details of RKVY, Available at: https://rkvy.nic.in/static/index.html (last visited on June 1, 2021).