India has endured more than its share of bad news and sufferings in the last three years. The pandemic has claimed a huge number of lives. Lockdowns caused the economy to shrink temporarily by a quarter and triggered the largest internal migrations since Partition, as workers in urban areas fled to their villages. Communal tensions have been simmering as the present dispensation is on a correctional course of undoing the horrible historical wrongs committed by foreign rulers. Then comes the Russia Ukraine conflict, pushing the global oil and food prices beyond limits.
And now a heat wave, baking most part of the country – aiding and abetting the sufferings of the poor and the common man. As the country emerges from the pandemic, there is a new pattern of growth that is seen never before. Indigenous tech efforts have become the key. As the cost of technology has dropped, India has rolled out a national “tech stack” – a set of Centre-sponsored digital services that links ordinary Indians with an electronic identity. The rapid adoption of these platforms has propelled a vast, inefficient, informal cash economy into the 21st century. It has turbocharged the world’s third-largest startup ecosystem, after US and China. India also ranks third for solar installations and is pioneering green hydrogen. As firms everywhere reconfigure supply chains to lessen their reliance on China, India’s attractions as a manufacturing location have risen, helped by a $26-billion subsidy scheme.
Western governments are keen to forge defence and technology links. India has also found a workaround to redistribute more to ordinary folk who vote but rarely see immediate gains from economic reforms: a direct, real-time, digital welfare system that in 36 months has paid $200 billion to about 950 million people. These changes may not lead to a manufacturing boom as big as those in South Korea or China, which created enough jobs for youth or filled the empty fields of farmers. Also, they may not solve deep-rooted social problems or administrative inadequacies like clogged courts and jails. But they do help explain why India is forecast to be the world’s fastest-growing major economy in 2022 and why it has a chance of holding on to that title for years to come.
Who is to be credited for this kind of ‘watershed’ change? No doubt, the incumbent BJP government led by Narendra Modi has implemented the welfare schemes aptly. It has backed the tech stack and persevered with the painful task of shrinking the informal economy. It has found pragmatic fixes. Central government directly purchasing solar power has kick-started the renewables. Financial reforms have made it easier to float young firms and bankrupt the bad ones. PM Modi’s successive electoral successes have provided the country the much-needed economic continuity.
Even the Opposition expects him to be in power well after 2024 polls. A snapshot of the present-day economy post-pandemic policy implementations by Modi Sarkar…
Present status:
1. India has grown from the 10th largest economy in 2014 to 6th largest currently and expected to become 5th largest by 2027 with a $5-trillion economy
2. India’s growth rate of 8% this year will be the largest among major countries.
3. In terms of stock market, Capitalisation India has reached the 4th spot.
4. India’s number of Unicorns is 3rd highest in the world.
5. National Highway network is 50% longer than 2014.
6. Number of domestic air passengers has doubled since 2014.
7. Air freight volume is up 44% from 2014.
8. Mobile phone base stations have tripled since 2014.
9. India now has a biometric system for every Indian in the form of Aadhaar.
10. India has pushed to ensure everyone has a bank account.
11. India has brought GST reforms which has simplified indirect taxes.
12. Tax evasion has been made harder.
13. India has rolled out UPI and payment share through it has increased to 50% of monthly GDP.
14. India has rolled out bankruptcy reforms to suck out zombie firms.
15. For all talks of crony capitalism, India’s top 4 firms have profit to national GDP at 0.7% half of USA’s top 4 firms.
16. India’s IT industry is now $230 billion with India becoming 5th largest exporter of services.
17. Formal employment has increased by 19 million to 56 million since 2020.
18. Direct benefit transfer (DBT) to support the poor has tripled to $81 billion from 4 years back reaching 950 million Indians.
19. The bad debt legacy from UPA-II has been cleaned up. 20. Corr uption has decreased considerably at the national level.
Opportunities:
1. India has forged a single national market.
2. India is taking a lead in the renewable shift which will determine the future.
3. Moving of supply chains away from China.
4. Strong foundation in the IT sector.
5. Tech supported welfare safety net pushed since 2014.
6. India top 4 companies plan to invest more than $250 billion in emerging industries and infrastructure.
7. Reliance plans to cut price of green hydrogen from $5/kg to $1 by 2030.
8. Tatas are taking lead in EV infrastructure.
9. India has rolled out $26 million in subsidies for production-linked incentive (PLI) schemes to move manufacturing from China to India.
For India to grow at 7% or 8% for years to come would be momentous. Pragmatic decisions have created a new opportunity in the next decade. It is India’s and PM Modi’s #NayaBharatNayeeUmeed leading towards #AatmaNirbharBharat as we are celebrating 75th year of India’s Independence #AzadikaAmrutMahotsav which will script as ‘Fastest Growing Nations of the World’. As Swami Vivekananda had said: “Arise, awake and stop not the goal is reached… Nation is advanced in proportion to education and intelligence spread among the masses… Blows are what awaken us and help to break the dream… All that man has to do is to take care of three things – good thought, good word, good deed.” Hum honge kaamyab… for sure. Amen! (The author is an academician and a business ideator, who mentors startups and young entrepreneurs)