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Subject: Economics

  • India should walk the talk on TRIPS waiver

    The article highlights the variance in India’s stand on intellectual property rights waiver for Covid related drugs on the international level and domestic level. 

    Removing the IPR barrier

    • When the pandemic hit the globe, India and South Africa piloted the proposal to waive key provisions of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement on COVID-19 vaccines, drugs, therapeutics, and related technologies.
    • The core idea is that IPRs such as patents should not become barriers in scaling up production of medical products essential to combat COVID-19.
    • The TRIPS waiver proposal, now backed by the U.S. would give immunity to member countries from a legal challenge at the WTO if their domestic IPR laws suspend or do not enforce IP protection on COVID-19 medical products.
    • Member countries of the World Trade Organization (WTO) are under an obligation to ensure that their domestic intellectual property rights (IPR) laws conform to the requirements of the TRIPS agreement.

    No use of compulsory licencing in India

    • The existing flexibilities under the Patents Act of 1970, such as compulsory licences, which are consistent with the TRIPS agreement, can be used to increase the supply of COVID-19 medical products.
    • However, despite the nudging by the judiciary and others, the government inexplicably hasn’t made use of compulsory licences in the pandemic.
    • While issuing compulsory licences for COVID-19 vaccines in the absence of technology transfer is easier said than done, they can be used to augment the supply of drugs and other therapeutics.
    • For instance, there are demands that compulsory licences be issued for drugs such as Remdesivir to augment supply.
    • Natco, an Indian pharmaceutical company, has requested a compulsory licence under Section 92 of the Patents Act for Baricitinib, a COVID-19 drug.
    • This is ironic because India has historically played a leading role in mainstreaming TRIPS flexibilities like the compulsory licence at the WTO.
    • The Central government, in an affidavit filed before the Supreme Court, states that the main constraint in boosting the production of drugs like Remdesivir is the unavailability of raw materials and essential inputs.
    • The affidavit further states, “it is presumptuous to assume that the patent holder will not agree to more voluntary licences”.

    Issues with the government’s stand

    •  If that is the real bottleneck, and not IPR-related legal hurdles, why is India pushing for a TRIPS waiver at the WTO?
    • The first step in advocating for the removal of IPR-related impediments at the WTO is to make use of the existing lawful means.
    • Therefore, the government’s stand before the Supreme Court is not only contradictory with India’s position at the WTO but also severely undermines it.

    Way forward

    • To make its TRIPS waiver stand convincing, the government needs to make aggressive use of Sections 92 and 100 of the Patents Act to license all patents necessary to make COVID-19 medical products.
    • The government should not only transfer Covaxin’s technology to domestic pharmaceutical companies, to boost national supplies, but also offer it to foreign corporations. 
    •  By unlocking its vaccine technical know-how to the world, India would demonstrate its resolve to walk the talk on the TRIPS waiver.

    Conclusion

    India must take a consistent stand on IPRs on COVID-19 medical products internationally and domestically.

  • Why has Indian manufacturing been losing jobs since 2016?

    The State of Working India (SWI) 2021 has documented the impact of one year of Covid-19 in India, on jobs, incomes, inequality, and poverty.

    Highlights of the SWI 2021

    • The SWI 2021 showed that the pandemic had forced people out of their formal jobs into casual work, and led to a severe decline in incomes.
    • There is a sudden increase in poverty over the past year.
    • Maharashtra, Kerala, Tamil Nadu, Uttar Pradesh, and Delhi, contributed disproportionately to job losses.
    • Unsurprisingly, these are also the states that suffered the maximum Covid caseload.

    Labour Participation Rate (LPR) is the ratio of the labour force to the population greater than 15 years of age. It is defined as the section of working population in the age group of 16-64 in the economy currently employed or seeking employment.

    Worsened with COVID

    • It pointed to an ailment of the Indian economy that has not only been a longstanding one but also one that has gotten worse over the past few years even without the help of Covid.
    • Agriculture, mines, manufacturing, real estate and construction, financial services, non-financial services, and public administrative services sectors account for 99% of total employment in India.
    • The number of people employed in the manufacturing sector of the economy has come down from 51 million to 27 million — that is, almost halving in the space of just four years!
    • For instance, the number of people employed in agriculture is going up.
    • Equally disheartening is that employment in non-financial services (such as providing education and entertainment industry etc.) has fallen sharply.

    Why are these trends worrisome?

    • It is important to understand that traditionally Indian policymakers have been of the view that the manufacturing sector is our best hope to soak up the surplus-labour otherwise employed in agriculture.
    • Manufacturing is well suited because it can make use of the millions of poorly educated Indian youth, unlike the services sector, which often requires better education and skill levels.
    • For the longest time, India has struggled to get its manufacturing industries to create a growing bank of jobs.
    • But, and this is what the CMIE data shows, what is happening in the past 4-5 years is that far from soaking up excess labour from other sectors of the economy, manufacturing is actually letting go of workers.

    Return to Agriculture

    • India has seen a hike in the number of people “employed” in agriculture over the past year.
    • This is nothing but disguised unemployment.
    • Essentially, labourers and workers are returning to their rural homes in the absence of jobs either in manufacturing or services.

    Why is Indian manufacturing failing to create jobs?

    • On the face of it, every past government has come out with a policy to boost manufacturing jobs. But still, the situation is getting worse.
    • There are different ways to look at this question.
    1. One is to look at why manufacturing has struggled to create as many jobs in the past
    2. The second is to look at the specific reasons why manufacturing has been bleeding jobs, instead of creating them, since 2016-17.

    Let’s tackle the historical question first.

    • If one looks at any of the sectors in the economy — agriculture, industry, services — starting a manufacturing unit requires the highest amount of fixed investment upfront (relative to the output that may be generated later).
    • In other words, it is a big commitment on the part of an entrepreneur to put up a huge amount of money without necessarily knowing how it will all pan out.
    • What has traditionally made this truly risky is the highly extractive nature of governments.
    • In simpler terms, far too often governments have been corrupt, with officials and politicians extracting bribes.

    Less focus on manufacturing goods

    • As regards the demand for manufacturing goods, experts point out that Indians have always consumed relatively less of manufacturing goods and relatively more of food and services.

    There are two possible reasons for this.

    1. One, most Indians are quite poor and hence most of the income is spent on food.
    2. Two, repairs and maintenance are a very high part of our consumption choice.
    • In other words, when Indians buy a manufactured product — say a refrigerator — they tend to use it for much longer than in developed countries.

    Core of the problem

    • The trouble lies with policymakers repeatedly neglecting the labour-intensive industries.
    • Since the second five year plan, the P C Mahalanobis strategy was to gain self-reliance by investing in capital intensive industries so that India does not have to import machines etc. from other countries.
    • The hope was that the demand from Indian consumers will make the domestic industry viable.
    • But Indian domestic demand was quite anaemic due to poverty levels.

    Other policy lacunas

    • As against the capital intensive industries, which were involved in making heavy machines, the labour-intensive ones (such as leather, handicrafts, textiles etc.) were reserved for the small-scale industry framework.
    • But while the labour-intensive manufacturing firms could not match the capital-intensive firms in terms of GDP value or growth of output, they did have a distinct advantage of creating more jobs.
    • But, by treating them as small-scale industries, policies held back their growth.
    • Moreover, India did not push for integrating its labour-intensive manufacturing in the global supply chains by aggressively following exports.
    • Instead, the idea was to substitute imports in the name of self-reliance.

    What has happened since 2016-17?

    • Things have become worse over the past five odd years despite the Indian government unveiling its ambitious Make in India (MII) initiative and the latest Production-Linked Incentive (PLI) scheme.
    • For one India is repeating the same mistakes with MII and PLI schemes.
    • They are again aimed more at capital intensive manufacturing, not labour intensive ones.
    • Moreover, India is reverting to the protectionist approach, aimed at self-reliance, yet again in recent years.
    • Further, much like in the past, this time, too, the domestic demand is weak for aggressively boosting labour-intensive industries aimed at capturing the export markets.

    Conclusion

    • The growing rift in the fortunes of informal and formal manufacturing could be the reason why India is seeing such a massive decline in manufacturing jobs.
    • The government has tried its level best to push for greater formalization but it has often been accused of not understanding the nature and functioning of India’s informal economy.

    Way forward

    • For the same level of employment, formality is good.
    • But if there is a trade-off between formality and employment generation, choosing formality may not be so beneficial. And this trade-off appears to be quite sharp in India.
    • Indian manufacturing is still at best hope for creating new jobs and soaking up excess unskilled labour through better infrastructure and easier regulatory support — to create millions of new jobs.

  • RBI should return to its dharma of taming inflation

    The article highlights the need for the RBI to focus on inflation instead of pursuing elusive growth.

    Is inflation at a level to be concerned about?

    • Due to the devastation caused by the pandemic, MPC kept its stance to ‘look through’ the sustained rise in prices through much of last year.
    • The release of the consumer-price inflation number for April 2021 (4.3%) might seem to validate their decision.
    • But there are many reasons why the MPC should be concerned.
    • To start with, the April print carries little validity since the base for comparison (April 2020) has been rubbished by RBI in the past on the grounds that it relates to the first month of the lockdown.

    Inflation comes down but after causing devastation

    • Through a combination of the base effect (high level of inflation in the previous comparable period), belated but inevitable monetary policy action and a fall in demand that more than offsets the disruption in supply, inflation will come down.
    • However, before inflation comes down, it brings untold misery to the public at large.
    •  In a country where close to 20% of the population lives below the poverty line and food is a major item of their consumption basket, any rise in inflation, especially food inflation, hurts the poor disproportionately.
    • Add to that the distress caused by job losses on account of the pandemic, and this time round, the pain is likely to be magnified many times over.

    What is causing inflation?

    • Monetary policy acts with long and indeterminate lags.
    • Far from spurring credit offtake through low interest rates excess liquidity has spilled over into price pressures in India.
    • Wholesale price inflation at 7.4% (March 2021) was the highest in 8 years, while it would be naïve to take any solace from the latest consumer price index number.
    • The RBI needs to be appreciated for doing its bit to keep the wheels of our economy moving during the pandemic.
    • However, its failure to shift gear in the face of mounting evidence of inflation cannot be neglected.
    • When inflation was breaching the upper end of RBI’s target band for months on end, the message should have been clear.

    US recovery and its impact on Indian economy

    • Globally, commodity prices are already on the rise.
    • Not without reason, it would seem, as borne out by 12 May’s inflation print of 4.2%, America’s highest in 12 years
    • Part of the reason is the excessive easing of US monetary and fiscal policies.
    • Rising US inflation has huge implications for countries like India that are at the receiving end of US policies.
    • As the US economy recovers, the dollar strengthens and US interest rates rise, the rupee is bound to weaken in response, adding to inflationary pressures here.

    Consider the question “What are the factors stoking inflation in the pandemic? How far the monetary policies pursued by the central bank is responsible for it?”

    Conclusion

    When the MPC meets next in early June, it must re-order its priorities. Instead of chasing elusive growth, it must revert to its swadharma, own dharma, and focus instead on inflation.

  • Remittance received by India remain unaffected by pandemic

    What the World Bank report says

    • India received over USD 83 billion in remittances in 2020, according to a World Bank report.
    • In 2019, India had received USD 83.3 billion in remittances.
    • The report said India’s remittances fell by just 0.2 per cent in 2020.
    • Much of the decline was due to a 17 per cent drop in remittances from the United Arab Emirates, which offset resilient flows from the United States and other host countries.
    • The World Bank, in its latest Migration and Development Brief, said despite COVID-19, remittance flows remained resilient in 2020.

    Trend analysis

    • China, which received USD 59.5 billion in remittances in 2020 against USD 68.3 billion the previous year, is a distant second.
    • India and China are followed by Mexico (USD42.8 billion), the Philippines (USD34.9 billion), Egypt (USD29.6 billion), Pakistan (USD26 billion), France (USD24.4 billion) and Bangladesh (USD21 billion).
    • Remittance outflow was the maximum from the United States (USD68 billion), followed by UAE (USD43 billion), Saudi Arabia (USD34.5 billion), Switzerland (USD27.9 billion), Germany (USD22 billion), and China (USD18 billion).
    • The relatively strong performance of remittance flows during the COVID-19 crisis has also highlighted the importance of timely availability of data.
    • Given its growing significance as a source of external financing for low- and middle-income countries, there is a need for better collection of data on remittances, in terms of frequency, timely reporting, and granularity by corridor and channel.

    B2BASICS

    Remittances

    • Remittances are usually understood as financial or in-kind transfers made by migrants to friends and relatives back in communities of origin.
    • These are basically sum of two main components – Personal Transfers in cash or in kind between resident and non-resident households and Compensation of Employees, which refers to the income of workers who work in another country for a limited period of time.
    • Remittances help in stimulating economic development in recipient countries, but this can also make such countries over-reliant on them.

    Remittance and the Indian Economy

    Benefits

    • Increased inward remittance is a boon for the economy at both macro and micro levels.
    • At the macro level, remittances contribute to maintaining stable foreign reserves.
    • Remittances help Indian Rupee hold its value against the US dollar and forms a significant part of the GDP.
    • On a micro level, remittances have shown a positive impact on healthcare, entrepreneurship, education, and overall economic development of the recipient families.

    Issues

    An increase in outward remittances however, raises an alarm. It causes the rupee to weaken against the dollar, which in return impacts the businesses exposed to foreign exchange, and the economy overall.

  • [pib] NITI Aayog and Mastercard Release Report on financial inclusion

    About the report

    • NITI Aayog and Mastercardtoday released a report titled ‘Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat’.
    • The report identifies challenges in accelerating digital financial inclusion in India and provides recommendations for making digital services accessible to its 1.3 billion citizens.
    • The report highlights key issues and opportunities, with inferences and recommendations on policy and capacity building across agriculture, small business (MSMEs), urban mobility and cybersecurity.
    • This report looks at some key sectors and areas that need digital disruptions to bring financial services to everyone.

    Key recommendations in the report include:

    • Strengthening the payment infrastructure to promote a level playing field for NBFCs and banks.
    • Digitizing registration and compliance processes and diversifying credit sources to enable growth opportunities for MSMEs.
    • Building information sharing systems, including a ‘fraud repository’, and ensuring that online digital commerce platforms carry warnings to alert consumers to the risk of frauds.
    • Enabling agricultural NBFCs to access low-cost capital and deploy a ‘phygital’ (physical + digital) model for achieving better long-term digital outcomes.
    • Digitizing land records will also provide a major boost to the sector.
    • To make city transit seamlessly accessible to all with minimal crowding and queues, leveraging existing smartphones andcontactless cards, and aim for an inclusive, interoperable, and fully open system such as that of the London ‘Tube’.

  • A TRIPS waiver is useful but not a magic pill

    The article highlights the challenges countries could face despite the patent waiver for Covid-19 vaccine.

    TRIPS waiver for Covid-19 vaccine

    • The United States has finally relented and declared its support for a temporary waiver of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement for COVID-19 vaccines at the World Trade Organisation (WTO).
    • Hopefully, the U.S.’s decision would cause other holdouts like Canada and the European Union to give up their opposition.
    • While the U.S.’s decision is to be welcomed, the devil would be in the details.

    The challenges after waiver

    1) Conditions of the waiver

    •  If the experience of negotiating such waivers, especially on TRIPS, were anything to go by, it would be too early to celebrate.
    • In the aftermath of the HIV/AIDS crisis the WTO adopted a decision in 2003 waiving certain TRIPS obligations to increase the accessibility of medicines.
    • However, this waiver (later incorporated as Article 31 bis in the TRIPS agreement) was subject to several stringent requirements such as the drugs so manufactured are to be exported to that nation only; the medicines should be easily identifiable through different colour.
    • Given these cumbersome requirements, hardly any country, in the last 17 years, made effective use of this waiver.

    2) Countries will protect the interest of pharma companies

    •  India and South Africa proposed a waiver not just on vaccines but also on medicines and other therapeutics and technologies related to the treatment of COVID-19.
    • So, the U.S. has already narrowed down the scope of the waiver considerably by restricting it to vaccines.
    • Medicines useful in treating COVID-19 and other therapeutics must be also included in the waiver.
    • While the U.S. would not like to be seen as blocking the TRIPS waiver and attracting the ire of the global community, make no mistake that it would resolutely defend the interests of its pharmaceutical corporations.

    3) Lack of access to technology

    • The TRIPS waiver would lift the legal restrictions on manufacturing COVID-19 vaccines.
    • But it would not solve the problem of the lack of access to technological ‘know-how’ related to manufacturing COVID-19 vaccines.
    • Waiving IP protection does not impose a legal requirement on pharmaceutical companies to transfer or share technology.
    • While individual countries may adopt coercive legal measures for a forced transfer of technology, it would be too draconian and counterproductive.
    • Therefore, governments would have to be proactive in negotiating and cajoling pharmaceutical companies to transfer technology using various legal and policy tools including financial incentives.

    4) Domestic IP regulation

    • While a TRIPS waiver would enable countries to escape WTO obligations, it will not change the nature of domestic IP regulations.
    • Therefore, countries should start working towards making suitable changes in their domestic legal framework to operationalise and enforce the TRIPS waiver.
    • In this regard, the Indian government should immediately put in place a team of best IP lawyers who could study the various TRIPS waiver scenarios and accordingly recommend the changes to be made in the Indian legal framework.

    Conclusion

    Notwithstanding the usefulness of the TRIPS waiver, it is not a magic pill. It would work well only if countries simultaneously address the non-IP bottlenecks.

  • Power generation from renewables increased despite drop in new capacity

    What the data from Central Electricity Authority says

    • The total power generation from renewable energy sources including solar, wind, bagasse, biomass, small hydro and others stood at 147.25 billion units in FY21 compared with 138.34 billion units in FY20.
    • This is an increase of six per cent, according to data from the Central Electricity Authority.
    • All other key segments such as thermal, hydro and nuclear have reported a drop in power generation during FY21.
    • This is despite a significant drop in new capacity addition in the renewables sector in Covid-battered 2020-21.
    • The total power generation from renewable energy sources (including solar, wind, bagasse, biomass, small hydro and others) stood at 147.25 billion units in FY21 compared with 138.34 billion units in FY20.
    • In FY21, total power generation from thermal, hydro, nuclear and renewables stood at 1372.9 billion units compared with 1383.33 billion units in FY20.

    Factors responsible

    • There are several factors working for an increase in generation by renewable sources.
    • The first factor is the thrust given to renewable energy by the government.
    • Second is the growing environmental awareness in the country, and the potential growth is driving more capacity creation here.
    • Third, getting in investment, — both domestic and foreign, is easier as this is an attractive area for them.

  • Mini-Seed Kits to boost pulses output in kharif 2021

    Central government to distribute mini-kits of seed

    • The government on said it will distribute over 20 lakh mini-kits of seeds worth Rs 82.01 crore as part of a strategy to boost pulses production in the kharif season of the 2021-22 crop year.
    • The total cost for these mini-kits will be borne by the central government to boost the production and productivity of tur, moong and urad.
    • In addition to this, the usual programme of inter-cropping and area expansion by the states will continue on a sharing basis between the Centre and state, it said.

    Increasing production and productivity

    • From a meagre production of 14.76 million tonnes in the 2007-08 crop year, pulses production has now reached 24.42 million tonnes in the 2020-2021 crop year, which is a phenomenal increase of 65 per cent.
    • India is still importing around 4 lakh tonnes of tur, 0.6 lakh tonnes of moong and around 3 lakh tonnes of urad for meeting its demand.
    • The special programme will increase the production and productivity of the three pulses of tur, moong and urad to a great extent and will play an important role in reducing the import burden.

  • RBI steps in to ease COVID-19 burden

    Term Liquidity Facility announced

    • Reserve Bank of India stepped in on Wednesday with measures aimed at alleviating any financing constraints for healthcare infrastructure and services reeling under the second Covid wave.
    • RBI Governor announced a Term Liquidity Facility of ₹50,000 crore with tenor of up to three years, at the repo rate, to ease access to credit for providers of emergency health services.
    • Under the scheme, banks will provide fresh lending support to a wide range of entities, including vaccine manufacturers, importers/suppliers of vaccines and priority medical devices, hospitals/dispensaries, pathology labs, manufacturers and suppliers of oxygen and ventilators, and logistics firms. 
    • These loans will continue to be classified under priority sector till repayment or maturity, whichever is earlier.

    Measures for individual and MSME borrowers

    • As part of a “comprehensive targeted policy response”, the RBI also unveiled schemes to provide credit relief to individual and MSME borrowers impacted by the pandemic.
    • RBI unveiled a Resolution Framework 2.0 for COVID-related stressed assets of individuals, small businesses and MSMEs.
    • To provide further support to small business units, micro and small industries, and other unorganised sector entities the RBI decided to conduct special three-year long-term repo operations (SLTRO) of ₹10,000 crore at the repo rate for Small Finance Banks.
    • The SFBs would be able to deploy these funds for fresh lending of up to ₹10 lakh per borrower.
    • In view of the fresh challenges brought on by the pandemic and to address the emergent liquidity position of smaller MFIs, SFBs are now being permitted to reckon fresh lending to smaller MFIs (with asset size of up to ₹500 crore) for onlending to individual borrowers as priority sector lending.

    Measure for States

    • To enable the State governments to better manage their fiscal situation in terms of their cash flows and market borrowings, maximum number of days of overdraft (OD) in a quarter is being increased from 36 to 50 days and the number of consecutive days of OD from 14 to 21 days, the RBI said.

  • Atmanirbhar Bharat & the informal sector

    The article highlights the important role the informal sector can play in the vision of Atmanirbhar Bharat.

    Economic development through Atmanirbhar Bharat

    • The vision of the Atmanirbhar Bharat is rooted in the classical paradigm of economic development, based on demand injection in the economy via two sources, domestic and external.
    • ‘Vocal for local’ exhorts a distinct and decisive shift in consumer preferences towards locally-produced goods and services.
    • ‘Make for the world’ is more ambitious and resembles the export-led growth strategy adopted in East Asia.
    • Thus, the Atmanirbhar Bharat categorically bestows the Indian economy with twin engines of growth.

    Important role informal sector can play

    • The strategy is based on an assumption of lack of adequate demand.
    • So a prognosis of supply side with respect to the ability of domestic producers of goods and services to seize the opportunity at the requisite scale and scope is pertinent.
    • The nature, character, structure and contributions of the informal sector require retrospection.
    • The size of India’s informal sector is massive, it accounts for about 50% of GVA and a major share in the export basket.
    • This position proffers it with growth opportunities emanating from domestic as well as external sources.

    Constraints faced by informal sector

    • Most firms are micro in size and deploy little capital.
    • They have a small scale of production, substandard/unbranded quality of products, and localised scope of procuring raw material and marketing their products.
    • They are vulnerable to business downturns and other market uncertainties, as reflected in high mortality.
    • Their access to cheap, reliable and long-term credit sources is highly restricted.
    • The sector also endures a lack of official identity and recognition of its existence and contribution.

    Three transformations informal sector need to adopt

    • Atmanirbhar Bharat promises enhanced demand for domestically-produced goods and services, but the exposure to stiff global competition, especially for informal sector units, is imminent.
    • In such a scenario, the informal sector must embrace for three tectonic shifts with respect to internal transformation, strategic positioning and labour-market dynamics.

    1)  Internal transformation

    • Enterprises must undergo drastic internal transformation, progressively converging at incremental formalisation through spontaneous and self-propelled transition into economically-viable units.
    • It requires infusion of capital to ensure enhanced labour productivity and higher wages.
    • A systemic disruption, fostering natural growth must be ushered in, which would also curb the birth of new informal enterprises.
    • Moreover, internal consolidation in the sector via merger and acquisitions of units would bring benefits accruing from scale economies.

    2) Strategic positioning

    • Two, because the vision of the Atmanirbhar Bharat exposes the informal sector to global competition, entrepreneurs must embrace the subtle art of strategic positioning in global mega-supply chains.
    • They must pick their products and markets with utmost care, and engrain two mantras of success at the global stage in the DNA of their business strategies.
    • Global mega-supply chains demand ultra-flexibility in production cycle in addition to heightened resilience to withstand headwinds emanating from not just domestic factors but also global.

    3) Labour market dynamics

    • The informal sector employs more than 80% of India’s workforce.
    • The changes in the first two spheres i.e. higher capital intensity-led enhanced labour productivity and ultra-flexibility in production cycles may have severe repercussions on the availability and quality of jobs in India.
    • To alleviate these concerns, the first assumption is that the proportionate increase in expected demand must be more than the enhanced labour productivity to at least retain the currently employed workers.
    • To generate good quality jobs, diversification (both horizontal and vertical) must be encouraged.
    • Vertical diversification entails products not just be partly produced or assembled in India, they must be the end-products of fully indigenised and integrated production and supply chains, from design to made in India.
    • Horizontal diversification involves expansion into newer products and markets, smartly aligning with India’s comparative advantage of surplus labour.

    Consider the question ” India’s vast informal sector is poised to play an instrumental, decisive and intriguing role in the vision of the Atmanirbhar Bharat.  But the sector, in its current form, appears severely constrained to harness the opportunities. In lights of this, examine the constraints faced by the sector and suggest the measures needed to transform the sector.” 

    Conclusion

    The vision of the Atmanirbhar Bharat is an inflexion point for India’s informal sector, which stipulates adroit manoeuvring between contrasting forces of continuity and change.