SELF RELIANCE

Self-reliance has also been one of the basic objectives of economic planning in India. Self-reliance does not mean selfsufficiency, however. Self sufficiency implies a situation in which a country itself produces all those goods and services which it needs. It is economically independent of other countries in the world. It has a closed economy

During the four decades 1951 to 1991, self-reliance was interpreted to mean self sufficiency. Therefore, India implemented the policy of import substitution very forcefully. Under this policy, India began to produce those goods which can serve as substitutes for import goods. To a good extent, Import substitution policy was successful. In case of goods such as food grains and some other consnsumption goods, we are totally independent of imports at present and in some other cases. E.g. atomic instruments, tanks, airplanes, engineering goods and modern electronics etc., imports are reduced to a negligible level, as these goods are now produced on a large scale domestically

Self-reliance on the other hand implies a situation in which a country is capable to sustain economic growth at a higher rate with the help of its own resources. It need not depend on foreign aid. It enjoys economic freedom in that sense India does import some capital goods and modem technology necessary for economic growth but it pays import bill out of its export earnings. It follows that selfreliance does not create a closed economy. The philosophy of self-reliance is against foreign aid, it is not against foreign trade.

Self-reliance and self-sufficiency may connote the same meaning literally, but these terms have been differently interpreted in Economics. Indian experience makes it very clear that self-reliance and self-sufficiency refer to policies which are opposite to each other. (i) Inward and Outward: Self sufficiency is an inward looking policy while self-reliance is an outward looking policy. This is because under the policy of self-sufficiency, imports are restricted or prohibited and import substitute goods are produced within the country with the hope that the development of domestic industries will get a boost. On the other hand under the policy of self-reliance, exports are encouraged to promote industrial development. The stimulus for development comes from outside the country.

(2) Closed and Open: Self-sufficiency leads to a closed economy while self-reliance lends to an open economy. This is because under the policy of self-sufficiency imports are curtailed so that exports become unnecessary. Hence the country wedded to the policy of self-sufficiency cannot reap the advantages of international trade. On the other hand, under the policy of self- reliance, imports of goods, services and technology etc are allowed fully, and payments for these imports arc made by earning enough foreign currency through exports. Imports are not financed through foreign aid or external assistance of any sort. In other words, the country pursuing the policy of selfreliance relies on internal savings for economic development. It does not borrow external savings. Also, it can reap the advantages of international trade.

(3) Monopoly and Competition: Self-sufficiency breeds inefficiency. Because, under this policy, domestic producers do not face competition from the foreign goods. They are like monopolists in the domestic market. On the other hand, self-reliance compels domestic producers to improve their efficiency continuously. Because under this policy they face tough competition in the world market

(4) Before and after 1991: During the period 1956 to 1991, India aimed at self sufficiency and to achieve this aim, it adopted the policy of import substitution. Since 1991, the policy of import substitution has been given up because of its evil consequences. Now India aims at self-reliance. To achieve this aim, India has now adopted the policy of import liberalisation and export promotion.