BackWe need a holistic approach for effective policymaking
This is crucial for India to sustain high growth, create jobs and make Atmanirbhar Bharat a success
PremiumIndia’s policy focus needs to be two-fold. We must increase gross domestic product (GDP) as well as sustainable employment. Our policies should facilitate both, supplemented by other pillars of governance. Atmanirbhar Bharat depends on our abilities and intent as much as policies conducive to self-sufficiency. We must also minimize the impact of all that pushes this national endeavour back and adds to our import bill, upsetting the balance of trade.
Prime Minister Narendra Modi’s passionate call for an Atmanirbhar Bharat (or self-sufficiency) has struck a chord with the Indian public because most view it as one of our best bets to reduce imports, save precious foreign exchange, increase domestic production and thereby create employment.
Mining and processing minerals can put India on the world map for self-adequacy and also bring in dollars through exports and reduction of imports. For sustainable GDP growth of 8% plus, the key is to develop the core sector—electricity, steel, refinery products, crude oil, coal, cement, natural gas and fertilizers. These together have a weightage of more than 40% in the Index of Industrial Production.
While flagging electric vehicles (EV), semiconductors, medical devices and speciality steel as among India’s key segments for domestic manufacturing, the Prime Minister had said, “It is a losing proposition if you export raw material and import manufactured goods." He added, “If a country like India is a market (for foreign goods), then it can never progress to give opportunities to the youth… When challenges arise before us, the need for ‘Make in India’ increases."
Unfortunately, the lack of a holistic approach is resulting in just the reverse of what is intended, especially in India’s effort to scale up power generation and mining and manufacturing projects. This has undermined our ability to achieve goals of self-sufficiency and employment generation.
Take the case of copper, which is a vital input for growth in these sectors. In Tamil Nadu, Sterlite Copper, which at one time contributed more than one-third of India’s production of this metal, has remained shut for the last three years amid protests over allegations that the plant caused environmental damage. Its closure has led to a loss of more than 100,000 direct and indirect jobs in Thoothukudi.
The Tamil Nadu government, which has made progress in turning the state into the “Detroit of India", with assembly lines and auto component clusters established by global automotive leaders, was quick to take a leadership position in the EV space. Battery and component makers began setting up manufacturing bases here, attracted by the state’s hardworking and skilled workforce. Also, sufficient availability of copper in Tamil Nadu helped. The Copper Alliance estimates that an electric car requires 83kg of copper as against 23kg in an internal combustion engine, while an electric bus needs over 200kg.
Yet, the irony is this: How do you promote green mobility if copper dependence is so high? How will manufacturers get copper at a competitive price if the closure of just one plant—Sterlite Copper—has turned India into a net importer? The country has also become a net importer of thermal coal.
For sustained growth and generation of employment (we need 8 million new jobs per year), we need credible, consistent and convergent policies. For the seamless rollout of projects by the government or private sector in manufacturing, mining, oil and gas exploration and power generation, we must learn from past flip-flops in policies and the large-scale economic losses brought about by court judgements, as in the case of Karnataka and Goa related to iron ore, thermal coal and copper, for example. Here is how we should proceed:
Start early: The best time to judge public opinion is at a project’s blueprint stage. Make an official announcement, set up a dedicated micro site and invite public comments. Also, educate all players, including the judiciary, about the project, its environmental impact, etc.
Use a committee of experts: It is important to set up an independent committee of experts to review the positive and negative aspects of any project and publish a report, especially if it is controversial.
Take a long-term view: This is especially important in the context of climate change. Don’t dismiss a project without reviewing if it will contribute to a sustainable future.
Invite naysayers for dialogue: Naysayers represent a segment of concerned citizens who may have valid points as to why a project should not go ahead. Seek and evaluate their opinions. If possible, co-opt them as members of the committee of experts. Their collective views could form the basis of corrective measures at the very blueprint stage.
Separate the grain from the chaff: The focus of regulators should be on curbing illegalities rather than stopping operations at mines with valid leases and effective waste disposal systems.
Set up special courts: For projects that are in the national interest but have been stopped by legal action, a special court can be set up for speedy disposal. Alternatively, hearing dates can be accorded priority in a regular court where the case is pending.
To ensure that the Atmanirbhar Bharat clarion call does not remain rhetoric and becomes reality, setting off a virtuous cycle of growth, India’s executive, legislature, judiciary and corporates must work closer with the public, so that projects of strategic and national importance are not stalled.
Aruna Sharma is a development economist and former secretary, Government of India
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