The Psychology of Self-Reliance: Why India’s Risk Appetite Must Evolve

When Prime Minister Narendra Modi calls for aatmanirbharta or self-reliance, he is signalling at more than economic independence or tariff reform. His call reflects something deeper: a transformation in how India perceives risk, failure, and agency. True self-reliance is not achieved through policies or production targets alone. It must emerge from the nation’s collective psychology and its beliefs about what it means to take risks, to fail, and to create.

For decades, India has been a society that prized stability over uncertainty. Our cultural conditioning has valued predictability, conformity, and collective approval. Success was traditionally defined by security — a government post, a salaried job, or a respected profession. Entrepreneurship, by contrast, was viewed as a risky deviation, both financially and socially. Psychologists describe this as low uncertainty tolerance or a discomfort with ambiguity that drives individuals toward safe, structured environments. In such societies, risk-taking is often interpreted as irresponsibility rather than innovation.

Yet genuine self-reliance demands the opposite mindset. It requires individuals who can navigate uncertainty, act autonomously, and view setbacks as feedback rather than failure. These are the psychological foundations of entrepreneurship — resilience, internal locus of control, and high achievement motivation. Economic independence from foreign markets must therefore be matched by psychological independence from fear. Without that, no tariff or industrial policy can truly make India self-reliant.

Psychologist David McClelland’s Achievement Motivation Theory offers a powerful framework for understanding this. In the 1960s, McClelland conducted his famous Kakinada Experiment in Andhra Pradesh, where he trained small business owners to set measurable goals, take calculated risks, and evaluate outcomes systematically. The results were transformative: participants became more enterprising, expanded their ventures, and generated employment. McClelland concluded that societies with a high need for achievement (n-Ach) produce more entrepreneurs and innovators. Crucially, he showed that achievement motivation can be cultivated through training and social reinforcement. A culture that rewards initiative will nurture innovation; one that stigmatises failure will suppress it.

India’s regional and cultural variations illustrate how psychology and entrepreneurship intertwine. In states like Gujarat, Rajasthan, and Punjab, trading traditions have historically cultivated high n-Ach and a strong internal locus of control, the belief that success stems from personal effort rather than external forces. Here, communities provide social and financial buffers for experimentation through family networks and informal credit systems. Risk is normalized as part of enterprise, and a failed business is often seen as temporary rather than shameful.

In contrast, states like Kerala and Tamil Nadu exhibit high educational attainment but comparatively lower entrepreneurial activity. Achievement here is often extrinsic, measured through academic success and stable employment, often abroad. Families encourage predictable career paths that ensure collective security. In Uttar Pradesh and Bihar, where collectivist norms remain deeply embedded, risk-taking is frequently constrained by social reputation and fear of familial embarrassment. Failure is not an individual event but a communal loss of face. These regional differences reveal how achievement orientation is shaped not just by opportunity but by cultural reinforcement and perceived social safety.

Urban India, however, is beginning to challenge these inherited patterns. Cities like Bengaluru, Hyderabad, and Pune have become psychological as much as economic incubators. They have become environments that reward creativity, encourage problem-solving, and normalize failure. The Global Entrepreneurship Monitor 2024 reported a 30 percent rise in entrepreneurial intent among Indians under 35, a sign that younger generations are developing a growth mindset or the belief that ability is not fixed but can be developed through effort and learning. Success is increasingly being redefined from job security to value creation.

This transformation also extends into corporate India. Companies view ex-founders as valuable hires precisely because they’ve operated in conditions of uncertainty. “A failed founder brings more initiative and resilience than a conventional MBA,” noted one HR leader at a major technology firm. This marks a critical psychological shift. From fear of failure to appetite for feedback, the mindset that underpins innovation ecosystems worldwide.

Comparisons with other nations sharpen the point. Over the past two decades, China has deliberately cultivated an achievement-oriented psyche. Cities like Shenzhen and Hangzhou have become hubs of experimentation where entrepreneurs enjoy both state backing and social prestige. Failure, though still difficult, is buffered by community networks and institutional support. India, by contrast, continues to export its most risk-tolerant minds to America’s Silicon Valley as it offers high psychological safety, where failure enhances reputation rather than erodes it. The issue is not talent but environment: India must create similar conditions where experimentation feels emotionally and socially sustainable.

Yet barriers remain. Deep-seated conditioning, gender expectations, and access to capital continue to shape who can take risks. The NASSCOM Women in Entrepreneurship Report 2023 showed that although women-led start-ups have doubled since 2018, they remain concentrated in low-risk service sectors. This reflects learned helplessness or the belief that outcomes are constrained by external factors and underscores the need for targeted interventions that build confidence and agency.

Infosys founder N.R. Narayana Murthy once remarked that India’s growth depends “not just on investment or infrastructure, but on imagination.” Imagination, however, flourishes only when there is psychological safety, when people can take chances without social exile. Achieving self-reliance, therefore, requires cognitive and cultural reprogramming: replacing dependency thinking with achievement thinking, fear with mastery orientation. It means creating a motivational climate where taking risks is seen not as defiance, but organic.

India’s true test of self-reliance lies not in trade statistics but in mindset transformation. When families celebrate effort over outcomes, when schools reward curiosity over conformity, and when failure becomes a badge of learning rather than shame. That is when aatmanirbharta will become more than a policy. The world’s next Silicon Valley could well rise in India, but only if Indians first learn to be comfortable building, breaking, and beginning again.

views expressed are personal.

Shivangi Rai is social sector consultant, psychology enthusiast and a philosophy noob.