India Shining – Star of Mysore
By Dr CD Sreenivasa Murthy
The Economist is a prestigious international weekly covering the global economy and politics, and is well known for its critical and balanced views. He is often skeptical of India, the Indian economy and Indian democracy. But one of the issues published in May was full of praise for India. Some of the salient features he mentions are:
India is expected to be the fastest growing major economy in the world. India has rolled out a nationwide “tech stack”, which is a collection of e-initiatives that connect ordinary Indians to electronic identity, payments, tax systems and bank accounts, which is helping to slowly reduce the monetary economy.
Direct digital social protection measures have helped the government distribute $26 billion (about two lakh crore rupees) in subsidy programs and India has become a high-tech social protection society. It has the third largest startup companies in the world right after the United States and China and even more than Japan.
While there is a shortage of software engineers in the rest of the world, India produces half a million a year. As Western industries attempt to reduce their reliance on China, India is emerging as an attractive alternative production hub.
The transformation of the Indian economy has an epic quality. A vast national market is being created and a new class of impetuous consumers is proliferating. Indian tycoons invest heavily and create business empires like the Rockefellers and Carnegies of the 19th century in the United States. The big four industrial giants – Adani Group, Ambani of Reliance, the Tatas and JSW – alone plan to invest $250 billion (nearly twenty lakh crore rupees) over the next five to eight years. Bengaluru’s low-key tech culture is creating a new generation of business ventures. The IMF (International Monetary Fund) predicts that by the mid-2030s, India will be the world’s third-largest economy and will contribute more to global GDP each year than Britain, Germany and Japan combined.
India has already attained the status of the world’s fourth largest stock market. Since 2014, the national road network has doubled and the number of air passengers has increased by 100%. The number of broadband subscribers increased phenomenally to 78 crores.
The financial system has become more resilient. Banks’ bad debts have been cleaned up. The increase in the number of domestic investors helps stabilize stock markets even when foreign investors flee.
The bankruptcy code has helped to clean up the financial system. The formalization of the economy provides the government with more opportunities to raise taxes. The commercial and public perception of government is one of consistency and less corruption. Although India’s current GDP is only one-sixth that of China, India’s technology and business services exports only lag behind China.
The magazine claims that India has been a strong democracy with its independent courts and a boisterous press. But it signals that over the years the secular notions enshrined in the Constitution have weakened.
Modi wants to restore Indian greatness. Even if India achieves a growth rate of just over 6%, it will be the world’s third largest economy by the mid-2030s.
A large English-speaking population and a democratic political system, if India can maintain it, could allow Indian technology and cultural exports to wield greater global influence than China at similar income levels. Given its size and potential, India could be the world’s next economic powerhouse. To quote The Economist: “Indian growth will change the world. But we should neither hope nor fear a resumption of the Chinese experience.
Note: The economic destiny of our country seems to have changed for the better after 2014 when the BJP came to power, luckily with Narendra Modi as Prime Minister. But for his extraordinary leadership, coupled with his oratorical skills, his ability to connect with people as well as his vision for India’s future, I don’t think The Economist would have thought it important to do a cover like it did. ‘did.
In matters that concern the country, Modi makes no compromises, be it security, integrity or economy. —KBG