An economic slump, the Bharatiya Janata Party’s rise, climate change, millennials and big technology battles—all shaped the year that is set to end
Affordable mobile data services has increased video consumption, making India a key battlefield for streaming firms
A year that started with farmers’ protests in Maharashtra is ending with student protests against the Citizenship Amendment Act. On almost every front, 2019 has been a tumultuous year for the Indian republic. In the political sphere, a Bharatiya Janata Party (BJP)-led government— which returned with a bigger mandate than before—has been able to pursue its long-held sociocultural agenda even in the face of stiff opposition. On the economic front, the government has struggled to stem a slump that has hurt farmers and the poor the hardest. Even the weather saw extremes of both droughts and floods amid growing concerns about the climate change crisis. We highlight five key trends that have important implications for India’s future.
The year of the slowdown
In 2019, economic activity slowed across the world. According to the International Monetary Fund, the global economy will grow by 3% in 2019, the slowest growth rate since the 2008 crisis. And at the heart of this slowdown is a slump in global trade. Trade volumes have been slowing since 2008 but the slowdown intensified sharply over the past two years, thanks to the actions of the Donald Trump-led US administration.
The slowdown in India may have been exacerbated because of the global slowdown, but it has home-grown roots. It is not just exports which are lacklustre. Consumption is falling, government finances are strained and investments remain stubbornly low. This lack of investments, especially private investments, is the most worrying since it portends slower growth and slower job creation in the future.
BJP cements national position
Ten years ago, in 2009, the BJP had won just 116 seats in the Lok Sabha and ended up with just 19% of the vote share. In the decade since, the party has risen spectacularly under Narendra Modi and cemented pole position in Indian politics, with a resounding victory in the 2019 general election.
But even as the party expands its national footprint its state presence could be receding. In November 2018, the BJP, either on its own or through an alliance, was in power in 20 states. But because of losses at the end of 2018 and more recently in Maharashtra, that figure has fallen to 17 (and could go down to 16 states following the Jharkhand verdict) (Chart 2a/2b).
Climate crisis hits home
“People are suffering. People are dying. Entire ecosystems are collapsing... And all you can talk about is money and fairytales of eternal economic growth. How dare you!"
Greta Thunberg’s impassioned speech at the UN Climate Action Summit in New York in September reflects a growing collective concern for climate change across the world. One measure of this comes from Google Trends, which captures search interest in different topics. Search interest in climate change across the world has gradually increased over the last five years but peaked around Thunberg’s appearance at the Climate Action Summit and worldwide protests around the time. In India, climate change manifested itself in another year of extreme weather, with droughts parching parts of the country even as floods devastated others. Taking a long view, temperatures in this decade are set to be the hottest ever in the country’s history.
Millennials come of age
On the internet, “OK boomer" emerged as one of the year’s most popular catchphrases and memes. Coined by millennials, the phrase was a riposte to criticism from older generations. In India, one such criticism came when finance minister Nirmala Sitharaman suggested that millennials’ preference for Uber and Ola could be behind the auto industry’s struggles. Interest in millennial identity surged this year, in India, and across the world.
Though exact definitions vary, millennials broadly refer to the generation who attained adulthood in the early 21st century and grew up when the world became digitally connected. Millennials now account for 24% of the world’s population (considering a definition of those born between 1981 and 1996), according to UN population projections. And within this, India accounts for the most millennials ( 19% of global millennials).
Big tech battles hit India
Even as they faced pushback from regulators, Big Tech continued to consolidate its hold over the global economy, and over our lives. In 2019, technology giants Google (Alphabet), Apple, Microsoft, Facebook and Amazon were five of the six biggest firms in the world by market capitalization, according to a PricewaterhouseCoopers’ report on the world’s 100 biggest companies. In the race for tech supremacy, India has emerged as a key battleground. Amazon is taking on Flipkart in e-commerce, while Uber and Ola are fighting for ride-hailing supremacy. But nowhere is the battle more intense than in the web streaming industry.
Thanks to affordable mobile services, video consumption has been growing fast, making the country a key battlefield for streaming services. Amazon Prime’s global battle with Netflix for the web streaming space, then, could depend on how well both perform in India. Data from Google Trends, though, suggests that both still have a long way to go to catch up with Hotstar, the web streaming king in India.