Vocal for Local: Mantra for Self-Reliant India
The coronavirus pandemic has not only disrupted businesses, lives, and livelihoods, but it has also exposed chinks in the way our manufacturing and supply chain strategy was designed. The push for local manufacturing, therefore, is a much-needed course correction from the erstwhile reliance on overseas manufacturers. The clarion call from the Prime Minister to be " Vocal for Local" for self-reliant India has encouraged the sentiment of MSMEs involved in the production of goods and services domestically. The public discourse around "buying local" is gaining ground and is helping a lot in spurring demand for local goods and services.
A new, self-reliant India requires fresh thinking and a reform-driven outlook. The government has been supportive of the MSME industry and the stimulus package of INR 20 trillion, equivalent to 10 % of GDP, has helped the MSMEs and entrepreneurs in ensuring business continuity and meeting working capital needs. Government has been forward-thinking in revising the definition of investment and revenue for MSMEs. The investment limit for MSMEs has been increased, with the introduction of additional criteria for turnover. The proposal of barring foreign firms from participating in government procurement tenders of up to Rs 200 crore is a welcome step as it empowers MSMEs to bid for government projects with a lot more confidence. The government has added 30,000 cr infusion of liquidity for NBFCs/MFIs/HFCs to the existing 45,000 cr partial credit guarantee scheme.
MSMEs are the backbone of Indian economy and contribute significantly to job creation as well. The capital infusion will help them in strengthening their runway and expanding production capacity, thereby creating more jobs. This will also keep the wheels of economy chugging and aid in increasing domestic consumption, thus contributing to the cyclic activity of demand and supply.
The new e-commerce policy is expected to have a mandatory clause of "country of origin" displayed on all products listed on online marketplaces. This would give a strong fillip to local manufacturers and suppliers. Given the public sentiment against foreign goods, local goods and services have been accorded importance to boost domestic manufacturing and strengthening regional and hyperlocal supply chains. Mentioning the country of origin will not only help buyers in making informed decisions about their purchases but also drive a behavioural change towards domestically produced goods and services and support the initiative of self-reliant India .