State of the nation: India / India
A poverty-stricken nation with the potential to become a global powerhouse, India’s greatest challenge is its biggest hope: can Modi harness the power of the youth?
Too often dismissed as a land of cows, cricket and cronyism, India is in fact the world’s largest democracy and the fastest-growing major economy, and its strategic location means it is poised to be at the centre of global action. “Considering all the turmoil around us, India is in a good place,” says Neelam Deo, director of think-tank Gateway House.“We are politically stable and enjoy solid economic growth.”
The country has been led by Narendra Modi since 2014 and the right-wing leader has been keen to usher in economic reforms and open up to the world. However, Indians are cautious of foreign intervention: public opprobrium last year staved off an attempt by Facebook to offer free internet across the country, with locals concerned it was a bid to dictate the way that they use the web.
India is the world’s third-largest internet user with about 460 million online. More than half access the internet solely via smartphones and most users are under 35, making India fertile ground for online ventures. It is also a youthful nation, with two-thirds under the age of 35, which could reap huge rewards if properly managed.
The wealth-income gap is a concern. Almost half the country live in poverty, while there are 236,000 millionaires and 84 billionaires. This raises questions about how effective government policies are in delivering the dream of a new India to all.
Modi’s performance to date has been mixed. He has struggled to get economic reforms through parliament and his “Make in India” campaign, which aims to boost the country’s manufacturing sector, is seen as a marketing gimmick. His tendency to go silent when right-wing issues flare up has solidified a view that he is sympathetic to Hindu fundamentalists.
“This government has undertaken reforms despite not having an upper-house majority,” says Deo. “There are reforms in how welfare is distributed, corruption seems to have reduced and there is greater efficiency in parts of the economy.”
Modi has worked hard to bolster relationships. By visiting Fiji, Australia and African nations, India is finally paying attention to countries of increasing importance to its future.
With Afghanistan and Pakistan to the west, China to the north and fractious borders on both sides, India’s location is interesting. Its relationship with China is of increasing concern, particularly with China’s Indian Ocean aspirations and moves to build links with countries encircling India. However, this has also made India a strategic partner for those seeking to contain Chinese ambitions.
While the country would like to play a greater regional and even global role, its attention is too often drawn to Pakistan, with which it has fought four wars. Pakistani militants often raid Indian targets too, derailing any serious talk of reconciliation.
Nevertheless, India sees itself as an important part of the region and is a major aid donor to its neighbours, particularly Bhutan. It was also a founding member of China’s Asian Infrastructure Investment Bank.
State of the economy
While described as the world’s economic “bright spot”, that is no real accolade in a moribund global economy. Or, as soon-to-be-former central bank governor Raghuram Rajan noted: “in the land of the blind the one-eyed man is king.” However, there are positives. Rampant inflation has come under control and there have been significant moves to rein in profligate government spending. Some big-ticket economic reforms are in the wings: a goods and services tax will turn the country into a single market and should boost growth. A new bankruptcy law was widely hailed as a major success, making it much easier to do business.
View from India
Santosh Desai, CEO of branding consultancy Futurebrands; columnist and author
“Without question, Indians now have a greater sense of confidence when engaging with the rest of the world; there’s a sense of greater ease and familiarity [with the outside world] thanks to the rise of the media.”
Lakshmi Chaudhry , former executive editor, Firstpost news website
“India’s greatest challenge is achieving equality, be it gender, class, caste or sexuality. Development and liberalisation are not silver bullets that will magically erase our society’s addiction to hierarchy.”
Ila Patnaik , professor, National Institute of Public Finance and Policy
“I am concerned about the decline in private investment and the ability of the financial sector to support investment and growth.”
The second annual International Yoga Day was held this year to great acclaim. India has exported its ancient repository of yogic knowledge around the world, neatly packaged as a fitness solution for those who like workouts with a dash of mindfulness. Alarmed by those who would try to monetise yoga, however, the Indian government has created a database of poses to prevent foreign yoga masters from placing patents on any moves.
India’s mainstream film industry is worth €2.1bn, pumping out about 1,500 movies each year. A significant chunk of revenue comes from growing overseas audiences – particularly in Asia and the Middle East – and the sizeable Indian diaspora across the world. Bollywood stars have an increasingly international profile, with appearances in western films, contracts to promote European cosmetics and appearances at festivals such as Cannes.
Last year the Victoria & Albert Museum hosted an exhibition on Indian textiles, drawing on millennia of history and subcontinental knowledge, with pieces ranging from the 3rd century to modern designer clothing. India’s long history of exporting silk and cotton, embroidered and woven fabrics, makes it unsurpassed when it comes to textile craftsmanship.
Traditional media is flourishing in India. Newspapers remain popular as more Indians become literate. The Hindi-language Dainik Jagran sells 3.3 million copies a day. Even regional-language papers sell in their hundreds of thousands – figures that media houses in the West can only dream about.
Ayurveda, India’s ancient herbal medicinal knowledge, might be considered alternative and pseudoscientific in the West but it’s revered in India. The government has gone to great lengths to legally protect the country’s Ayurvedic intellectual property. Stretching back thousands of years, Ayurvedic medicine is based on complex herbal compounds and wellness therapies. The industry has been estimated to be worth more than €700m annually.
What needs fixing
Poor roads delay goods from farm to consumer, leading to unnecessary waste; railways are unable to transport coal to power stations; and electricity distributors, forced to sell power below cost, are unable to invest in their networks.
India’s education system is abysmal. Problems begin in primary school, with a lack of teachers. By high school many girls have dropped out, although female retention rates have been improving. Tertiary education’s focus on rote learning leaves graduates lacking basic knowledge in their fields.
The treatment of women is appalling, from parental preferences for boys to education, employment and safety. Modi made promising sounds early on, saying that the way women are treated needed to change, starting with how the nation’s boys are raised. The issue has gone off the radar since.
If India can educate and meaningfully employ its youth, the country stands to be a powerhouse. India has been a polyglot of cultures and religions for centuries and has remained immune to radicalisation. Modi has made missteps in this regard and needs to ensure that the country’s tolerant and accepting nature continues.