Survey: India Inc Lacks Investment Appetite, Swadeshi Movement Inevitable
Survey reveals weak investment sentiment among Indian companies, hinting at Swadeshi resurgence.
Photo by Satish Dharmavarapu
Key Facts
Weak investment appetite: India Inc
Possible reasons: Demand concerns, policy uncertainties
Swadeshi movement: Becoming inevitable
UPSC Exam Angles
GS Paper 3: Indian Economy - Investment models, industrial policy
GS Paper 1: History - Swadeshi movement and its impact
Potential question types: Statement-based, analytical questions on economic policies
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More Information
Background
The Swadeshi movement, meaning 'of one's own country,' has deep roots in India's struggle for independence. It emerged as a significant political and economic strategy during the late 19th and early 20th centuries, particularly in response to the economic policies of the British Raj. The movement gained momentum with leaders like Bal Gangadhar Tilak, Lala Lajpat Rai, and Bipin Chandra Pal advocating for the boycott of foreign goods and the promotion of Indian-made products.
The partition of Bengal in 1905 further fueled the Swadeshi movement, leading to widespread protests and the establishment of indigenous industries. The movement aimed not only to achieve economic self-sufficiency but also to foster a sense of national pride and unity. While the initial fervor of the Swadeshi movement waned over time, its underlying principles of self-reliance and promoting local industries have remained relevant in India's economic discourse.
Latest Developments
In recent years, there has been a renewed emphasis on 'Atmanirbhar Bharat' (Self-Reliant India), a government initiative launched in 2020. This initiative aims to boost domestic manufacturing, reduce import dependence, and promote exports. The Production Linked Incentive (PLI) scheme, introduced as part of Atmanirbhar Bharat, provides financial incentives to companies for manufacturing in India.
The COVID-19 pandemic and subsequent supply chain disruptions have further highlighted the need for self-reliance. The government is also focusing on infrastructure development, skill development, and ease of doing business to attract investments and boost economic growth. While Atmanirbhar Bharat shares similarities with the Swadeshi movement, it operates in a globalized world with a focus on competitiveness and integration into global value chains.
The future outlook involves continued policy support for domestic industries, promotion of innovation, and efforts to enhance India's manufacturing capabilities.
Frequently Asked Questions
1. What are the key reasons cited for the lack of investment appetite among Indian companies, as per the survey?
The survey suggests that demand concerns and policy uncertainties are potential reasons for the weak investment sentiment among Indian companies. These factors might be making companies hesitant to invest in new projects or expand existing operations.
2. Explain the concept of the 'Swadeshi movement' and its historical background.
The Swadeshi movement, meaning 'of one's own country,' emerged during India's independence struggle as a strategy to promote domestic production and consumption while reducing dependence on foreign goods. It gained momentum in the late 19th and early 20th centuries, with leaders advocating for the boycott of British products and the adoption of Indian-made goods.
3. How might a renewed focus on 'Swadeshi' impact government policies and business strategies?
A renewed focus on Swadeshi could lead to government policies that encourage local manufacturing and reduce dependence on imports. Businesses might also shift their strategies to prioritize domestic production and cater to the demand for locally made goods, potentially influencing investment decisions and supply chain management.
4. What is the 'Atmanirbhar Bharat' initiative, and how is it related to the Swadeshi movement?
Atmanirbhar Bharat (Self-Reliant India) is a government initiative launched in 2020 to boost domestic manufacturing, reduce import dependence, and promote exports. It shares the Swadeshi movement's goal of promoting self-reliance and strengthening the domestic economy, but through modern strategies like the Production Linked Incentive (PLI) scheme.
5. What is the Production Linked Incentive (PLI) scheme, and what is its objective?
The Production Linked Incentive (PLI) scheme is a government initiative that provides financial incentives to companies for manufacturing in India. Its objective is to encourage domestic production, attract investments, and reduce reliance on imports, thereby boosting the Indian economy.
6. Why is the lack of investment appetite among India Inc in the news recently?
The lack of investment appetite among India Inc is in the news due to a recent survey indicating that domestic firms are hesitant to invest in new projects or expand existing operations. This raises concerns about potential economic challenges and slower economic growth.
Practice Questions (MCQs)
1. Consider the following statements regarding the Swadeshi Movement: 1. It primarily aimed at promoting indigenous industries and boycotting foreign goods. 2. The partition of Bengal in 1905 was a major catalyst for the movement. 3. The movement advocated for complete political independence from British rule. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
Show Answer
Answer: A
Statement 1 is CORRECT: The Swadeshi Movement indeed focused on promoting Indian-made goods and boycotting foreign products, especially British goods. This was a core tenet of the movement. Statement 2 is CORRECT: The partition of Bengal in 1905, announced by Lord Curzon, was a significant trigger for the Swadeshi Movement. It led to widespread protests and a surge in nationalist sentiment. Statement 3 is INCORRECT: While the Swadeshi Movement contributed to the broader independence movement, its initial focus was on economic self-reliance and cultural nationalism, not an immediate demand for complete political independence. The demand for complete independence gained prominence later.
2. Which of the following initiatives is/are most closely aligned with the principles of 'Atmanirbhar Bharat'? 1. Production Linked Incentive (PLI) scheme 2. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 3. Pradhan Mantri Jan Dhan Yojana Select the correct answer using the code given below:
- A.1 only
- B.2 only
- C.1 and 3 only
- D.1, 2 and 3
Show Answer
Answer: A
Statement 1 is CORRECT: The Production Linked Incentive (PLI) scheme directly promotes domestic manufacturing and reduces import dependence, aligning perfectly with the goals of Atmanirbhar Bharat. Statement 2 is INCORRECT: MGNREGA focuses on rural employment and poverty alleviation, which are important but not directly related to the core objectives of Atmanirbhar Bharat (self-reliance in manufacturing and production). Statement 3 is INCORRECT: Pradhan Mantri Jan Dhan Yojana aims at financial inclusion, providing access to banking services, but it doesn't directly contribute to the self-reliance goals of Atmanirbhar Bharat.
3. In the context of declining investment appetite among Indian companies, which of the following factors could be potential contributors? 1. Policy uncertainties and regulatory hurdles 2. Global economic slowdown and reduced export demand 3. Increased availability of credit and lower interest rates Select the correct answer using the code given below:
- A.1 and 2 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
Show Answer
Answer: A
Statement 1 is CORRECT: Policy uncertainties and complex regulatory procedures can deter businesses from investing due to increased risks and compliance costs. Statement 2 is CORRECT: A global economic slowdown reduces demand for Indian exports, impacting company revenues and discouraging investment in expansion. Statement 3 is INCORRECT: Increased availability of credit and lower interest rates generally encourage investment, not discourage it. This factor would typically stimulate economic activity and investment.