India has been going through a tough patch economically, socially and morally over the last 24 months. Clearly, something has to change and something must move if we want to recoup anything this decade.
At a basic level, the vision of the country needs to be sharpened—who are we and what do we want to stand for in a future global order? I feel India’s leaders need to answer this question at this juncture. Why does the world need India? India cannot take its future position for granted. India is no longer attractive because of the size of its domestic consumption alone. Size should not make us arrogant. India’s opinion and voice might be difficult to ignore politically, but it can be ignored from a purely economic point as other countries get more attractive.
India’s first challenge is governance. The country needs to refocus its efforts on governance, ethics and institution building. Failure to do so will be a hurdle for corporate India. The army and the judiciary score consistently well on trust in India, the other institutions not so well. This will be a serious future concern if not addressed.
India’s second challenge is infrastructure. If India needs to be attractive, both to its citizens and its investors, the government must and should strengthen infrastructure with consistent long-term policies. If we don’t start now, the miles ahead will be steep.
India’s third challenge is its demographics. Everyone talks of a young population. India will get younger and richer this decade. India will boast of one of the youngest populations in the world. Providing good quality education and the right job skills will be important to maintain social harmony in the country. The demographic dividend can be a demographic challenge leading to jealousy, strife and rebellion if not managed well.
India’s fourth challenge is productivity. India’s physical infrastructure is poor, but its digital infrastructure can be rich. The government must invest in the digital space and this will have a multiplier effect very quickly. The success of the mobile sector should give India enough hope. The ability to pay cash to a rural citizen via the mobile phone and thus cutting down on wastage is a big benefit.
India will see a good return on capital productivity; it should also focus its efforts on people productivity. Large-scale training, education and discipline will be needed to be infused in order to make the Indian citizen productive. This concept of human productivity will be important for us to move from a low-wage country to a knowledge, productive-services economy.
India has the soft power, it has the intellectual capital, it has a strong capital market and it has a significant domestic market. All of these are strengths and augur well for India. We need to look at how we work and what we would like to be known for in a future world. In essence, why does the world need India and why will it value India?