Atma Nirbhar Bharat vs Swadeshi Movement : The Parallels
If 2020 was the year of learnings, the common denominator through it all was the concept of Self Reliance. While the idea held its ground on a personal level, India, as a nation, extracted the idea and applied it on a national level when the country’s Prime Minister, launched the “Vocal for Local” campaign aimed at creating a self-reliant (Atma Nirbhar) nation by supporting local businesses.
As soon as the initiative was launched the comparisons with the “Swadeshi Movement” which started in 1905 as part of the Indian independence movement started pouring in. The following statements started making the rounds,
‘An extension of the ‘Swadeshi Movement’
‘Setting up for failure much like its earlier counterpart’
As an economic strategy, the movement was aimed at developing Indian nationalism sentiment at the time. There was a scheme in place to create and grow a base of domestic big industry. However, this minimized competition and also encouraged protectionism, which became one of the many reasons why the Swadeshi Movement was never deemed as a success in the grand scheme of things.
However this time will be different because of the following reasons
The availability of funding
The Swadeshi movement called for the use of locally-made products. The trend lasted for some years before Economic Liberalisation began in the wake of the 1991 economic crisis, which led to a steady rise in FDI with the entry of global brands into the country. The fall of the Swadeshi movement can be directly mapped to the economic crisis that followed the unrest.
With the announcement of Atmanirbhar Bharat, came a financial stimulus relief package, worth Rs. 20 Lakh Crores to revive the economy in times of pandemic-related adversity unveils measures that directly benefit the MSMEs. These relief measures included collateral-free loans, subordinate debt for stressed enterprises, and equity infusion through a fund of funds. This acted as a clear differentiator between the two movements with the Vocal For Local initiative having a huge funded cushion to fall back on.
The lack of competition
The key impact of the Swadeshi Movement was the Economic liberalization that made its way to the country through global players started entering the market. This phenomenon led to stiff competition between the home-grown players and foreign players as the latter offered better quality products at competitive prices. Unable to compete, many small Indian players got acquired by big multinational companies. Except for a few diversified conglomerates such as Tatas, Godrej, Reliance, and Raymonds, to name a few, many smaller brands fell by the wayside.
The Indian economic ecosystem today, startup or otherwise, holds an advantage over multiple foreign players with Indian companies seeing multiple investments even in the middle of a pandemic. The idea is to create more local brands and take those to the global arena and not isolate the growth to the national boundaries. The focus not only lies in increasing domestic consumption but also intensifying export activities. The selling point is the opportunities that lie in the market rather than fighting for space in the economy.
The opportunity to co-exists / co-invest
Globalization which was an aftermath of the independence and Swadeshi Movement was a move stemmed out of desperation. An act of revival of the economy through the aid of foreign investors at the cost of the local players, artisans, and small business owners. The empowering factor was diminished and overpowering of the conglomerates took the driver’s seat.
With Atma Nirbhar Bharat, the vision is to become a $5 trillion economy by 2025. The goal is different, so are the circumstances. Incentives are getting created for foreign investors to back homegrown enterprises. Whereas on the VC front, as much as Domestic VCs tend to gravitate towards large foreign funds, with the Atma Nirbhar plan there’s an opportunity for even newer VC funds to come into India to seek out the co-investment opportunities happening within Indian Peninsula.
The evolution of Laws
The Swadeshi Movement passed the baton over to Foreign Direct Investment (FDI), and multinational corporations and made the nation heavily dependent on foreign capital. Monopolisation and capturing markets was the priority of the big foreign capital, leading to a facade of growth which in reality lead to job losses and economic inequalities within our border, and the menace of the unmanageable balance of trade and current account balance of payment deficit. Unemployment and poverty made people dependent on government support, which was unavailable for the masses to access.
With the Atma Nirbhar Bharat plan, PM Narendra Modi has been pushing for make-in-India, start-ups, Khadi, etc. The policy of dependence on imports facilitated by lower tariffs and the FDI/FPI continues to be a debated topic, but amendments to these laws have been incorporated. This along the PM’s bold step of stitching together a package of Rs 20 lakh crore, nearly 10 percent of GDP, offering relief and opportunities for labor, small retailers, small entrepreneurs, microenterprises along with farmers, honest taxpayers, and other businesses, puts this scheme in a much better place than Swadeshi Movement.
The core of this scheme lies in strengthening the sense of brand-ownership for home-bred innovations and ideas. ‘Vocal for Local’ does not seek to replace foreign brands but promote Indian brands. Being ‘Vocal for Local’ is as necessary on a personal level as it is on a national level. For these brands and businesses to thrive, being ‘vocal’ about ‘local’ is taking a stance for indigenous entrepreneurship and skill.
It is high time we bet our money on the home ground.
