India – Ticking all the boxes

 

Among the many concerns being aired about India the ‘whether India can make it’ is the most popular. From the time of independence this question has being doing the rounds in all seminars, think tanks, and the opinions of political gurus and economists.

The country has consistently ‘missed the bus’ when it comes to economic development. Maybe the government did not give enough push to the industry or did not follow aggressive development policies, India consistently failed to perform.

It became fashionable to talk on this subject in economic forums around the globe. India too obliged by showing consistent failure.

Come 2014, and things began to change. It started with the basics. Government officials were asked to report on time to their office. And to not play golf after attending office for a few hours. The new administration campaigned to end open defecation in the country by providing toilets to all households.

Basics out of the way, the government took up the next priority. Weeding out corruption and ensuring that the government schemes delivered. Last mile delivery was always a problem in India. So the Jan-Dhan Yojana was implemented. This scheme necessitated that all poor Indian citizens who had been out of the economic mainstream had his or her own bank account, so that electronic money transfers could be undertaken.

The Ujwala Gas scheme also envisaged that all the poor households in India received a cooking gas connection. Many middle class people responded to the government request to give up their own connections in favour of a piped gas connection. The released connections were re-diverted to the Ujwala Scheme.

The government then proceeded with some long pending political decisions. Issues like Article 370 for Kashmir, construction of Ayodhya Temple, Triple Talaq bill, were resolved. Disinvestment in government PSUs was undertaken. A milestone was reached when Air India was bought by the Tata Group.

Infrastructure development has been undertaken on a war footing. Roads, railways, shipping have received considerable attention from the government. The Digital India scheme, the GST system, the Bankruptcy bill, have been implemented.

The changes the country is witnessing are transformative. Unlike the situation earlier where the politicians only used to talk about development, this time there is action on the ground. People have actually received money disbursed by the government schemes.

Industries are being developed at a rapid pace. The much needed policy push to the startup industry has materialized. The PLI (Productivity Linked Incentive) scheme, and the recent government announcement for developing the semiconductor industry is evidence of the determination with which this government is pushing development.

The current government has been working steadily towards its set goals, and by the next decade India could to become a $ 5-10 trillion economy. With rising affluence India could lose some long standing problems it has been facing. 

Social fissures like caste, class and religion will disappear or will diminish in importance politically as the wealth of the people increases. Politicians will not be able to exploit this factor during elections to polarise the voters. Money mindedness may take over the caste system which in India’s case could be a whole lot better. India’s population is showing signs of stabilising its growth rate, which could increase per capita incomes exponentially by the end of this decade.

All economic parameters point towards rapid development. The government of the day in the country will need to steer the right course to build the momentum and sustain it.