India, the world’s largest democratic nation is in the midst of a month long voting process to elect its new parliament. Some 900 million Indians in 20 states and Union territories began their participation in the marathon election process which commenced on April 11 and concludes on May 19, 2019. India is standing on the precipice of history with an extraordinary potential in unleashing opportunities for a new generation. More than half of India’s population is under the age of 25, totaling 600 million people. The aspirational new generation is fueling a robust debate for bolder reforms.
In 2014, Narendra Modi’s Bharatiya Janata Party (BJP) won a landslide victory promising to implement economic reforms. One of Prime Minister Modi’s first major speeches to the citizens of India focused on addressing corruption in India and strengthening the rule of law. According to reports, voters in the 2014 Indian general election had a favorable impression of Modi’s leadership as Gujarat’s chief minister during the years of 2001 – 2014 and the state’s economic success propelling it into one the nation’s fast growing economies.
Reviewing India’s Reform Agenda
The World Bank’s Doing Business Report on October 31, 2018, stated, “Sustained business reforms over the past several years helped India jump 23 places to move to 77th position in this year’s global ease of Doing Business rankings. India carried out six business reforms during the past year, earning the credentials of being a top global improver for a second consecutive year.”
The World Bank also mentioned that India’s government made tax payments easier by merging the nation’s diverse sales taxes into a single General Sales Tax (GST).
According to the International Monetary Fund, India, the world’s sixth largest economy is projected to grow by 7.3 percent this year and 7.5 percent in 2020, supported by the continued recovery of investment and robust consumption, thus remaining the fastest growing major economy of the world.
In its manifesto, the BJP has pledged to build new roads, ports and airports, create additional jobs and improve the ease of doing business. The BJP has also suggested providing electricity connections, houses, cooking gas, crop insurance and loans for small businesses.
In addition to addressing reforms, India’s BJP has reminded citizens of its strong response on the national security front. PM Modi followed through with airstrikes against terrorist camps within Pakistan, in retaliation for the terrorist attack in Indian-controlled Kashmir which killed 38 military police officers.
In response, India’s main opposition party, the Indian Congress party is offering a great many promises including handing out 72,000 rupees ($1,038) to each of India’s poorest families which they state would benefit 250 million of a population of 1.3 billion. Its leadership has also promised to reform the goods and services tax into a “simple and minimum tax”.
According to a Bloomberg report, both parties are suggesting financing deals for Indian infrastructure projects with the BJP saying it will seek capital investments totaling $1.44 trillion by 2024 if re-elected, and the Congress party promising modernizing all outdated rail infrastructure and increasing the length of national highways.
On the international front, India has worked to strengthen ties with its affluent diaspora living in Western democracies and establish partnerships with the US and key European nations. PM Modi’s visit to Israel specifically marks a major policy shift from the days of the “Non-Aligned Movement” which at times has called member states to bar all products and goods emanating from Israel. The history of India and Israel dates back to 3,000 years ago when trade was established by peoples of two ancient civilizations. It has further strengthened over the ages.
India’s political leaders could harness the nation’s tremendous potential by placing a greater emphasis on implementing economic reforms, advancing bold free trade and securing peace through strength. The nation’s leadership has an opportunity to strengthen private property rights, both physical and intellectual, and implement bolder reforms thus meeting voters’ expectations.
In the next 15 years, the South Asian nation is expected to be one of the top three economic powers of the world. India’s foundation on the rule of law, its robust democracy, continued reform pressures from within and without, and best practices shared through its engaged diaspora and investors from strong rule of law nations, could bring about transformative reforms. Moreover, these measures have the potential of achieving higher rates of economic growth and lifting millions into higher income earners.