With tectonic changes, 21st century is India’s
a larger proportion.
Third, an expanding market necessitates production volumes and diversification to meet domestic and global demand. Consumer spending grew from US $549 billion to US $1.06 trillion between 2006 and 2016, putting India on the path to becoming one of the largest consumer markets by 2025. India’s consumption is expected to rise 7.3% every year over the next 20 years. This “new middle class” is significant as it will usher in fundamental changes in India and around the world.
Fourth, given our labour supply-side elasticity and comparative wage rate differential, India has the ability to become the world’s new manufacturing hub.
Fifth, the emergence of a new leadership is increasing the awareness of its obligations and accountability. Sustaining high rates of growth with high domestic savings rate, limited reliance on external capital flows coupled with macroeconomic stability invests the future with optimism.
But is our unique position or invincibility guaranteed?
We do not have the luxury to pursue policies suited for an autarkic India. The place at the high table entails costs and obligations. Increasing global interdependence also increases vulnerability. We need to improve the competitiveness of our economy. A viable export sector and sound regulatory framework is needed to cap double-digit growth rates.
Second, we need to harness trade as an engine of growth and boost its potential. Few nations have realised double-digit growth without a vibrant export sector.
Third, the potential of India, described as “Team India” by the PM, must be realised. The federal compact in which states are active participants in the development matrix is demonstrated by the agility with which the GST Council has reshaped far-reaching tax changes and balanced growth compulsions with revenue.
Fourth, many institutions need restructuring. Illustratively, the functioning of Parliament and the judiciary must be readapted to the challenges of an increasingly globalised India.
Fifth, allegations that our achievements comprise an uncertain glory due to the neglect of education, health and other human development indices must be redressed.
Finally, we must have a sagacious and decisive leadership, which recognises the need for continuing macroeconomic stability. With an enhanced consciousness of the electorate, the leadership is seeking models and patterns of growth, best suited to its local conditions for sustainable development.
The human choice we must make must be based on the strongest principles of growth and equity. Radical reforms are quintessentially disruptive. Odds may never favour the radical. But audacity and panache do. Modi knows this well.