Opinions expressed by Entrepreneur the contributors are theirs.
You are reading Entrepreneur India, an international franchise of Entrepreneur Media.
Since the economic reforms of 1991, India has come a long way to become today a $3.1 trillion economy. Profound structural and political changes led the Indian economy to grow nearly nine times from just $266 billion in 1991, and compete with mature economies such as the United States, China, Japan, Germany and the UK. This growth has been largely driven by India’s private sector, which has been instrumental in driving innovation, competitiveness, employment, capital and economic growth.
While India remains one of the fastest growing economies in the world, the pandemic has had an unprecedented impact on individuals, businesses and government. India’s GDP fell 23.9% in the first quarter of FY21, due to lockdowns and movement restrictions. However, despite supply chain challenges, trade disputes and geopolitical tensions, India Inc has shown agility and resilience to weather the crisis through innovation and digital transformation. When we faced a severe shortage of protective products, India Inc reoriented its factories to increase the supply of sanitizers, masks, sanitizers, etc. Likewise, as consumer needs have changed during the pandemic, most businesses have quickly pivoted to cater to emerging markets.
Simultaneously, the Indian government launched the ‘Atmanirbhar Bharat Abhiyaan’ create a foundation of self-reliance to revive the economy and potentially thrive in adversity. While efforts in 1991 were aimed at making India a globalized economy, today the focus has been on building a self-reliant India that can thrive in global competition.
Government support for structural reforms
The Indian government has announced a series of structural reforms and policy boosts under the Atmanirbhar Bharat mission to make it easier to do business in India. These reforms have provided a stronger impetus to support domestic manufacturing, strengthen supply chains, foster innovation and entrepreneurship, create jobs, and institutionalize skills development to be ready for the future. A stimulus package worth INR 20 lakh crore has also been introduced to boost the Atmanirbhar Bharat mission.
To improve India’s manufacturing capabilities and exports, the Indian government has introduced the Production Linked Incentives (PLI) scheme to make Indian manufacturers globally competitive and the country an integral part of the global supply chain across all industries. The electronics manufacturing sector is an example of the multiplier effect of policy. Today, with import substitution, India exports mobile phones worth $3 billion.
While many policies have been changed, the new education policy is a key reform to harness economic growth through India’s youth. The new policy will respond to changing demands for quality education, innovation and research. This will further enhance India’s strong technical and engineering capabilities, making India a knowledge superpower.
Role of startups in India’s self-sufficiency
Today, Indian startups across all industries are driving innovation to create affordable yet world-class products and services that can compete with global players. More than 69,000 startups in India together create an ecosystem that enables autonomy, self-sufficiency and determines the future of our economy. The startup ecosystem has proven its agility and resilience in recent years where it has met the challenges of the pandemic despite the disruptions. The period has actually become a turning point for Indian startups to replace reliance on global suppliers by producing innovative products and services made in India.
The startups have also accelerated Bharat’s digital transformation. This has enabled job creation in India’s Tier II and III small towns, reducing migration to metros for job opportunities. With more than 69,000 registered businesses and hundreds of thousands of unregistered startups spread across 640 districts, the number of employment opportunities has increased dramatically. It has also improved the standard of living for those employed in both the formal sector and the gig economy.
Job creation and employment have also been a fundamental charter of the Atmanirbhar Bharat mission. The fact that startups have generated over 700,000 jobs since 2016 in the formal sector alone is another big step towards a self-reliant India.
Beyond traditional employment
India Inc has also contributed to the growth of the country’s gig economy, which today employs over 15 million workers. On the other hand, these construction workers have enabled India Inc to expand their business effectively. Today, organizations have understood the need to embrace the gig economy to stay relevant and agile. These organizations are now venturing beyond the commonly known last mile delivery gigs that employ blue collar workers. They are increasingly looking for gig partners for roles in operations, business development, human resources, sales and marketing, business analytics, and more. at scale and access to a broader talent pool, regardless of location and age. The rapid adoption of gig platforms by consumers and businesses enables India’s large population of unemployed and underemployed people to contribute to economic growth.
Gig platforms and the government are trying to organize this sector to tap the untapped potential of the Indian people. Formalizing the gig economy, along with further policy reforms in labor codes will allow more people to join the gig economy and reduce attrition in the sector. As the gig economy matures in India, gig platforms will not only solve the challenge of unemployment or enable business growth: they will also become a service that can be leveraged globally. With the interplay of technology and human resources, India can become a global hub for the export of services that goes far beyond IT.
In order to capitalize on the workforce, skills development (upgrading, retraining and versatility) will be the backbone of a self-reliant India. With a stronger integration of technology into our lives, it is imperative that the workforce of tomorrow acquires the evolving skills of the 21st century. While the government has built an e-learning ecosystem with initiatives such as the National Skills Qualifications Framework, the DESH-Stack e-portal, etc. it will be the collective responsibility of India Inc, gig platforms and the government to hone, retrain and develop the skills of people.
While India Inc was already moving towards a self-reliant India by creating world-class products and services for the world on its own territory, the Indian government’s Atmanirbhar Bharat economic philosophy provides a framework to build upon. Policy reforms over the next few years will be an integral part of creating an enabling ecosystem driven by R&D, innovation, entrepreneurship, employment and skills development to showcase overseas competition.