As the year ends and two decades of reform have placed India in a position most in 1991 would have been happy with, the question is: what next? For my generation, and most likely the reader’s generation, the question of what happens over the next 20 years will be the decisive factor in the growth of the Indian republic. The last 20 years have changed the ethos of Indian business and young Indians from “Can I?" to “I can!" Despite a gloomy business atmosphere predicated on global economic cues and relentless news flow on corruption and poor governance, the mood of industry and the youth in the country is optimistic, especially compared with the global peer set.

The real question for us is: in 2031, what will we surmise about the previous 20 years? There are three potential scenarios:

Scenario 1: India looks like Delhi. Economic growth of 5% per annum will yield gross domestic product (GDP) per capita of $4,000 in 2031. Progress has been made, but large pockets of poverty exist across the country. Today’s youth are middle managers struggling with anaemic future prospects. Today’s children, now in their early 20s, look enviously at China, Brazil, Indonesia and Russia. The economic prospects of those countries have dwarfed India and have relegated it to the sidelines. All talk of China and India has been laid to rest. China’s economy dwarfs India’s by a factor of up to 4x.

Scenario 3: India leads the world—growing at 14% per annum. The delta between 10% and 14% growth means adding the entire economy of “Delhi India" to “truly Asia India" and becoming the world leader. Poverty isn’t a thing of the past, but those considered poor in India live a life that might be considered lower middle class in today’s India. All social indicators place India at the top of global indicators, a startling and welcome reversal of the situation 20 years ago. India’s economy matches that of China and is the largest in the world.

Today, we dread that we are headed towards Scenario 1 and can only dream of Scenario 3. To realize the dream of India leading the world, the government (and if not this one, then the next) must focus on three areas. The first is allocation of scarce resources, the second is disbursement of government services and the third is procurement of government goods. Fortunately, for all of us, ensuring good governance in all three activities is easily achieved—given the will.

India is actually blessed in natural resources. From oil and gas to coal to iron ore, we are a fortunate country. Such fortune must be shared with all, while those risking capital and effort to monetize such fortune are compensated adequately. The oil-rich Middle East is an example of what not to do, but Norway is an example of what to do. So is potentially Australia. The nation, states, local citizens and corporations can work together in drafting a fair and equitable natural resources regulatory framework.

In the procurement and disbursement of economic services, India’s IT prowess can work wonders. Shine a light on all procurement activity, put it on the Web. In securing and delivering government services, there is no better regulator than the free flow of information. Put the lights on and the cockroaches will go away. Crony capitalism is something no one wants, probably not even the cronies. Aadhaar will help ensure that disbursements reach the people. India’s IT prowess has helped bolster growth over the last two decades; now it needs to help propel changes in governance.

Standing at the precipice of national bankruptcy, India rose to the challenge and re-established its place in the world. In the next two decades, a new challenge awaits—a challenge for you, me, for all of us. Most of us would like to see Scenario 3: India as the world leader. Even in the midst of our despair of a global economic downturn and domestic policy standstill, we need to think of the long term, of 2031. It would have been an unbelievable ride for all of us—going from one channel, black and white Doordarshan to thousand-channel, high-definition, retina display mobiles—but what a ride. It will have its ups, its downs, but I wouldn’t trade it for the world. From near bankruptcy to world leader.

Prashant Agrawal, a principal at a management consultancy, writes on public policy issues in India and internationally.

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