Viraj Mehta unpicks the potential of India’s ‘unique experiment in human history’.
Those of us who grew up in India in the 1980s, when only one national television channel was on air, will remember sharing their living room every Friday night with those of their neighbours who didn't own a TV set. Everyone was glued to the one prime-time show of any importance: Chitrahaar, a medley of the latest Bollywood music videos and old Hindi movie songs. We relished watching it together on our black and white televisions, knowing that this monochrome – yet still colourful – experience was being shared by the entire nation at the same time. Many of us even remember exactly where we were when, on the eve of the 1982 Asian Games in Delhi, it was announced with great ceremony that India was migrating to colour television. Finally. A new dawn.
There was really only one political party in the country back then. Posters of its leaders were plastered everywhere. We consumed products from the few Indian companies that were household names, who made everything from hair oil to steel wardrobes. We listened to the latest pop music – which had, as we eventually learned, been released in the West several years earlier.
Each year, relatives visiting from abroad would bring suitcases of awe-inspiring gifts which confirmed to us that life was very different in the free-market economies of the West. In India we remained protected behind tariff walls and exchange-rate restrictions, being Indian and buying Indian, while yearning to be global. Meanwhile, the economy chugged along at what was affectionately known by economists as the 'Hindu rate of growth'. In the eyes of most of the world, India was an exotic place, famous for snake charmers, Maharajas and the nobility in its poverty.
Fast forward to 2017. The India many of us grew up with has disappeared completely. Self-assured, dynamic, assertive, armed with ubiquitous cell phones, numerous TV channels, nuclear weapons and a world-class IT industry, India is today one of the fastest-growing economies of the world.
Furthermore, Indian corporates have increasingly established new beachheads and significant market shares outside India, especially in Africa and South East Asia – in telecoms, for example – and have consolidated their positions in key North American and European markets, especially in IT. New airports, new highways and new digital pathways have been opening up on a regular basis in the last decade. One recent report by a prominent investment bank expects India's economy to be worth $7 trillion by 2028, surpassing Japan and Germany.
However, to sufficiently meet the aspirations of its young population, investment in areas such as health and education must keep pace with India's blistering growth aspiration. Having seen the power of reform in the 1990s, Indian reforms going forward will need to be sustained, creating, as a recent report by HSBC puts it, an “ecosystem of continuous change” into the foreseeable future.
A service-fuelled economic growth will need to make great strides in other sectors, including manufacturing, to be able to achieve the phenomenal job creation necessary to harvest what HSBC calls its “demographic dividend” – a near-limitless pool of young, talented and hard-working individuals waiting in the wings to take their places in India's story.
India’s bold strides in this direction will help pull even more hundreds of millions of people out of poverty towards greater economic equality and prosperity. Combined with attempts to build institutional stability, predictability, transparency and consistency – including in the rule of law – this has the potential to reap the benefits of a unique experiment in human history; one in which democratic polity, technological prowess and distributed governance, transports nearly one-fifth of humanity into an era of prosperity and social justice, and transforms India into a formidable economic engine for the world.
Many narratives have been written for India by others in the past. But now it is time for India to be fully in control of its own narrative in the interests of its people.
Viraj Mehta is Head of Regional Strategies - India and South Asia, Member of the Executive Committee, World Economic Forum Geneva. This post first appeared on the Agenda blog.