Since India attained independence, it has been quite a journey for this South Asian country which is home to the largest democracy and multicultural diversity.
India has traversed a long way with regard to its politics, society, culture, and economic domains. Being the second largest populous country in the world, and looking at the alteration it has been through in its economic front has only helped it to further flourish in the global economy and sustain as well. India’s initial economic policy was based on Nehruvian Socialist Model which was a brainchild of the then Prime Minister, Jawaharlal Nehru. He was conscious of the fact that being a newly independent and sovereign Nation State with the majority of the population living in poverty, uplifting those people is the government’s major priority. However, just like any other country round the globe, even India could not sustain its economy and had to adopt the New Economic Policy in 1991 under the guidance of the then Finance Minister, Manmohan Singh. This was a crucial moment for India’s economy, as it head towards liberalisation, privatisation, and globalisation. Today, the Indian economy has reached to a pinnacle where it is the sixth largest economy in the world and is growing substantially. India’s current Prime Minister, Narendra Modi who got re-elected in 2019, has set a goal to make India a USD 5 trillion economy by 2024-25. The question lies is whether the flight from the pinnacle leads to downfall or Modi’s goal.
As per the Economic Survey 2018-19, India needs to sustain a real GDP growth rate of 8%. Savings, investment and exports are suggested to be the factors which will help with the growth. Private investment is stated as the “key driver”. Since then, economist, financial experts, govt spokesperson have given variant viewpoints on whether this big dream of economic leap by Prime Minister Modi will be true by 2024-25 or not. Questioning this in the realm of possibility is imperative in order to understand the future of 1.36 billion people, and whether this doubling of India’s economic size really achievable with regard to the current economic pattern.
India’s GDP sank to just 5% in the April to June quarter, referring to which many independent economists said that the country is in recession, but the government states that the economy will rise to 7% this year. Both the statements must be critically analysed. For the former, the argument is that the IT and BPO service export industries are doing really well, while for the latter, the increasing level of unemployment and nearly 300,000 people in auto sector have lost their jobs in recent months is the counter argument. Few industries are facing recession-like conditions, but the overall economy is still balancing it well.
For India to become USD 5 trillion economy, it must undergo several reforms, such as privatisation of public entities, investment in infrastructure, expanding agricultural sector through agro-tourism, exports, and usage of big data is pivotal. On the policy front, the government needs to take several steps and initiatives in order to meet the economic goal.
- Good governance is the need of the hour, as the policies which are to be implemented shouldn’t be chained in the shackles of corruption. As it needs to be, responsive, effective and accountable to the needs to citizen.
- There must be major changes in the higher education system, granting autonomy to the universities so that research and scholarly work are carried out of utmost quality.
- States across the country need to develop, if India envisions to develop further.
- There needs to be mass employment and skill training as well.
- Grass root level of economic model must be analysed.
- India need to control its data and digital platforms within its territory.
- Building a robust banking sector which caters the need of the citizens as well as the industries which partially maintains the economic flow of the country.
- Aiming to lift a considerable amount of people from poverty with regard to every upward shift to economic growth.
- Government should take steps for agriculture to turn into income-centric sector than just being production-centric sector.
The economic target which India is working towards is not really impossible for it, however, it must work in accordance to the global economy and politics with regard to oil prices, Brexit, US-China trade war and bilateral issues. On its home ground the grass is neither greener nor easier to plough considering its economic slowdown. It’s time India explores all its industries with investment, along with leveraging the behavioural economics of nudge, and procurement of advanced cutting edge technology along with generating employment and sustaining a better standard of living for its people.
Al Jazeera (2019), ‘Can Modi deliver on his promise to create a $5 trillion economy?’ Al Jazeera, September 28, 2019. Available at: https://www.aljazeera.com
Beniwal, V. Nag, A. (2019), ‘Why in India, 6% Economic Growth Is Cause for Alarm’ The Washington Post, September 5, 2019. Available at: https://www.washingtonpost.com
Economic Survey (2018-19), New Delhi: Ministry of Finance, Government of India.
Report of the Working Group on USD Five trillion Indian Economy (2019), New Delhi: Department of Industrial Policy and Promotion.