Surging domestic markets and a move towards more streamlined regulation are making the country the new locus for growth

Economic expansion has its inevitable effect on people’s attitudes and their economic outlook. And since India’s growth has taken off, one of the biggest changes I have noticed among Indians has been in our attitude towards the world beyond our shores. Many of our generation viewed careers outside the country as possessing greater promise and opportunity. Not so long ago this was the dream portrayed in our films as well, in which songs were shot in Europe and great wealth was represented by NRI heroes.

This sentiment has begun to change in the last few years, as we enter a period which Prime Minister Manmohan Singh calls ‘India’s century’. Our soaring growth, surging domestic markets and movement towards clearer, more streamlined regulation has led many around the world to view India as the new locus of growth and opportunity in a slowing world economy.

The energy and entrepreneurship that is delivering growth is palpable in the city streets, in the boardrooms and increasingly across rural areas. Multiple forces have placed India at the cusp of enormous economic opportunity — the same place the United States found itself in the 1950s and the United Kingdom in the 1900s. And as millions more hope to participate in India’s growth, we are seeing a spurt of ambition and productivity across industries old and new.

The rapid growth that India is experiencing is only the first part of a long potential arc in its development. And its development so far, has created some interesting challenges of its own. Economic thinkers such as Amartya Sen have pointed out that extreme poverty and oppression come with a feeling of futility for the people who suffer them and it often makes them resigned to their fate. Economic growth, on the other hand, engenders hope — it creates the sense among the poor that a better life is possible and allows people to aspire towards better incomes and more assets.

In India, this transition has now taken place. The consequence of this is that India must not only sustain rapid growth rates but must also ensure that this growth is inclusive and accessible and able to address rising aspirations across the country.

The urgency to answer these aspirations

is clear — India’s star is bright, but without the right approach it can quickly dim. India is the country with the largest pool of the youngest people in economic history; we will have more than 800 million people in the workforce by 2020. Such a dividend is coming to fruition even as India becomes more mobile, with our cities and towns becoming magnets for people in search of better jobs.

This presents us with unprecedented opportunity but the question remains whether we have the resources in place to meet the demands and dreams of this young population: to provide them the safety net, services and jobs they need to translate their dynamism into national growth. Many of the indicators that surround the younger demographics indicate they now exist unmoored, without the resources they need to build their skills.

Challenges

In many ways, our urban landscapes neatly encapsulate the potential of a changing, pulsating India while holding up a mirror for us to see the challenges that come with growth. Recently, an official of a prominent Indian public sector bank, while commenting on the first branch they set up in Dharavi, Mumbai, noted that they were taken aback by the reception they received in the slum. They went in worried about security and a lack of business but were overwhelmed in the first few days by the number of residents coming in, seeking to open accounts and wanting to remit money home to their villages. This was in 2007: since then, we have begun to slowly acknowledge the potential of neighbourhoods and regions that for many years were completely disregarded.

The sentiment was evident when it came to rural India as well. In the 19th Century the British imperial government spoke of rural Indians as living in a separate country: ‘The village is their country, they know none beyond.’ In the 21st Century, however, much of rural India is looking outward, thanks to the promise of employment as well as access to media, information and telecommunication such as mobile phones. Owing to this wave of migration, urban India’s population is increasing by 31 people every minute and the millions of migrants end up living in the margins of cities.

Here, migrants can rent a bed if they are too poor to afford anything else — a perch from which they begin new lives in the city. They may start a small factory or work in one, drive a taxi, work in a household, or take a construction job helping erect the many bridges, roads and buildings coming up across the country. These cities, our runaway metropolises, are a powerful representation of India at a time of rapid growth — a place of dreams for migrants but also where many residents still have limited access, few rights and little legitimacy, where a large proportion of people live in illegal housing, and 70 percent work in the informal sector.

While India has managed to drive growth in this unregulated manner for the past few decades, the coming influx of millions more young workers and the growing demands of the poor mean that this informal approach is no longer a sustainable one. We must directly face some of the big questions emerging with India’s growth: how do you meet the aspirations of India’s poor, its migrants, its young?

In the 1970s, Prime Minister Indira Gandhi delivered a powerful slogan for the poor: that the government would provide them with Roti, Kapda, Makaan (food, clothes and a house). In the 1980s, Rajiv Gandhi reengineered the slogan to Roti, Kapda aur Awaaz (food, clothes and a voice.) Empowering ordinary Indians across the services they accessed was, he believed, essential for the poor to emerge out of poverty.

In the years since, giving the poor a ‘voice’ — empowering them in their relationship with the state — has been a prominent goal for the government. Across programmes, there is a growing emphasis on providing more information and control to poor individuals and their communities. The strengthening of Panchayati Raj institutions, more powerful grievance mechanisms in programmes such as the Public Distribution System, and potent audit systems available to the poor in programmes such as the National Rural Employment Guarantee Scheme and the Sarva Shiksha Abhiyan are instances.

Implications

It is in this context that the project that falls under the Unique Identification Development Authority of India has substantial implications. The basic objective of the Unique Identification initiative or Aadhaar is to issue a unique number to every resident in the country. Issuing this number to every individual addresses a fundamental weakness in our economic and social infrastructure: the lack of a voice, and the anonymity many residents experience today in accessing services and resources. Residents across India, for example, find themselves denied a bank account because they are unable to clearly identify themselves and meet the know-your-customer norms that banks are required to follow. Similarly, the poor may be able to use mobile phones to speak to their families and friends, but accessing services and information through these devices is far more elusive.

The Unique Identification Number provides individuals with an identity infrastructure that is pervasive, cutting across different services, geographies and even across various devices. It would allow residents to state their identity clearly anywhere in the country and to any service provider.