What has happened<\/strong>:<\/h5>\nGovernment of India has announced a Rs. 20 lakh crore package of AtmaNirbhar Bharat Abhiyan. It is to provide stimulus to the economy and reduce the impact of COVID 19 on livelihoods. Four tranches of this package include measures for\u00a0 MSME\u2019s, NBFC\u2019s, agriculture, migrant welfare, defense, space, power etc. These are primarily supply side measures<\/u><\/em> like increased credit, marketing reforms, liberalization, privatization. It focuses on reviving investment by industry and hence employment.<\/p>\nExperts argue that such one-size-fits-all supply side interventions will not benefit Northern and Eastern states where industrial development and startups are low. They also sight the difference between Nehru\u2019s \u2018self sufficiency\u2019<\/u> and Modi\u2019s \u2018Atmanirbhar Bharat\u2019<\/u>. Nehru\u2019s self sufficiencyfocussed on economic empowerment from below, while Modi\u2019s \u2018Atmanirbharbharat\u2019 is more individualistic, covering select industrialists and \u2018start-ups\u2019.Thus, the advantage of the present stimulus, if any, will accrue only to the southern and western Indian States which are industrially advanced. Thus, they argue for a regional and state specific approach in states like Bihar.<\/p>\n
In addition, rent seeking behaviour prevalent in Eastern and some northern states will make this stimulus less effective. Example of rent seeking is crony capitalism where industries seek to influence regulation through donations to political parties and candidates<\/p>\n
Such rent seeking behaviour in these states is an effect of historical causes. Understanding them will help in formulating state specific stimulus to improve governance and economic growth.<\/p>\n