Economist Venkatesh Athreya: ‘Aatmanirbhar Bharat is more rhetoric than reality’

India’s economic self-reliance has been a recurring political slogan — from the Nehruvian era’s planned development to Prime Minister Narendra Modi’s call for Aatmanirbhar Bharat. But is India truly on a path toward self-sufficiency, or is it increasingly dependent on global capital and imports?

Economist Venkatesh Athreya, in conversation with The Federal’s Pramila Krishnan, examines the contradictions in India’s economic strategy, the erosion of public sector potential, and the growing challenges for workers and industries.

How do you assess the Modi government’s call for a Swadeshi or Aatmanirbhar Bharat economy? Is it any different from the Congress’s earlier approach to self-reliance?

The talk of Aatmanirbhar Bharat or Swadeshi is largely rhetorical. These slogans have existed for a long time — the RSS even has its own Swadeshi Jagran Manch that periodically holds conferences on self-reliance. But on the ground, the government has not invested adequately in scientific and technological research and development, which is the foundation for true self-reliance.

India’s manufacturing growth, industrial expansion, and the share of manufacturing in GDP remain stagnant.

Our public sector enterprises once showed promise — take BSNL or the steel industry, for example. But with large-scale privatization and the influx of speculative foreign finance capital, the vision of self-reliance has weakened.

India’s manufacturing growth, industrial expansion, and the share of manufacturing in GDP remain stagnant

The Congress too, after 1991, abandoned its earlier Nehruvian commitment to self-reliance and embraced the globalization agenda through liberalization, privatization, and globalization policies. In the Nehru era, India built a foundation of scientific and technological capacity through five-year plans and public investments. That focus disappeared over time.

So, in your view, have both the Congress and BJP failed to support Swadeshi industries and the public sector?

Yes. The term “Swadeshi” has become more of a slogan than a policy framework. Historically, it was the public sector that built self-reliance in key areas. The contrast is visible in Kerala, which has revived loss-making public enterprises and made them profitable within limited powers. The Centre could have done much more.

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The government could also have pushed the corporate sector to innovate and invest in new technologies. Instead, it offers them tax concessions and loan write-offs while small farmers and workers struggle. Public sector enterprises could have played a crucial role in building capacity, but they have been systematically weakened.

Given India’s integration with global trade, is the idea of Swadeshi still realistic?

Before 1991, India’s trade — imports and exports combined — accounted for around 14 per cent of GDP. Today, that figure is close to 60 per cent. We are far more integrated into the global economy. Talking about complete self-reliance or autarky is unrealistic. We must trade, but we should have control over technology.

Instead of merely importing, we should focus on developing and advancing technologies domestically. Unfortunately, slogans from Swadeshi Jagran Manch and others remain empty because the government continues to cut budgets for science, technology, and education. Without investment in human development, self-reliance is impossible.

Building bridges and airports does not make a nation self-reliant. We need to build infrastructure for ordinary citizens — water, healthcare, and education — while simultaneously promoting indigenous science and modern technology.

China has done this successfully. We could too, but we have failed to support our scientists and innovators.

You mentioned India’s corporate sector lacks a culture of innovation. Why is that?

Our corporate class evolved from a mercantile background. The Tatas and others began as traders before they became industrialists. This legacy still influences how business operates — there is a preference to imitate rather than innovate.

While India has done well in IT software, it lags far behind in IT hardware. In the 1950s, we had a clear national science policy aimed at technological self-reliance. Those policies have been abandoned. We need to revisit that framework — not to close our economy, but to strengthen it.

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Countries like China and Brazil have asserted economic sovereignty even against global powers like the US. India must also find the courage to chart its own course rather than quietly accept external pressures.

The government claims its new labour codes simplify the law and empower workers. How do you view these reforms?

The claim of reducing 44 labour laws to four codes is misleading. It’s essentially a cover for taking away workers’ rights. All major trade unions — except the BJP-affiliated Bharatiya Mazdoor Sangh — have opposed these changes through nationwide strikes.

These laws, along with schemes like Shram Shakti Nidhi, conceal an agenda to weaken the working class. The government failed with the farm laws because farmers resisted for over a year. Workers too will resist attempts to undermine their rights.

Even states like Tamil Nadu, considered progressive, briefly proposed 12-hour workdays, which had to be withdrawn after widespread protests. The overall direction of policy is regressive — it erodes protections rather than expanding them.

You’ve been critical of the Shram Shakti Nidhi scheme. Why?

Because it claims to draw inspiration from the Indian Constitution but in spirit aligns more with Manusmriti. The RSS historically rejected the Constitution, asking why Manu’s code wasn’t included. The current framework reflects that ideological continuity.

We should center our economic vision around workers and farmers, not a handful of corporate elites like Ambani and Adani or foreign capital

There is no such thing as Hindu or Muslim economics. Trying to revive caste-based occupational hierarchies under the guise of “traditional artisan” support is anti-constitutional. We should center our economic vision around workers and farmers, not a handful of corporate elites like Ambani and Adani or foreign capital.

India continues to face a large trade deficit despite claims of growth. How does this fit into your critique?

Our merchandise trade deficit — the gap between imports and exports of physical goods — is often 5–8 per cent of GDP. It’s offset partly by remittances from Indian workers abroad and by IT exports. But this dependence on external flows makes our economy fragile.

To attract foreign exchange, the government welcomes speculative foreign capital, even if it brings no jobs or industries. This model is unsustainable. Real self-reliance requires building basic industries and educating our workforce to innovate rather than merely operate machines.

Finally, why do you think current policies reinforce inequality and caste hierarchies?

Because they romanticise “traditional occupations” without addressing the realities of migration, unemployment, and social change. The old caste-based division of labour no longer exists as it once did. What we need is not revivalism but transformation — education, industrial policy, and worker empowerment.

Schemes like Make in India or Skill India sound good but lack funding and follow-through. Employment generation has been poor, and the quality of jobs has deteriorated. Labour force surveys clearly show stagnant job growth and declining real wages.

Instead of tackling these issues, our political and media focus remains elsewhere. Unless India invests seriously in science, technology, and equitable development, Aatmanirbhar Bharat will remain an empty slogan.

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