The year is 2050, we live in a changing world as we knew from early 21st century days. The great upheaval that was the covid-19 pandemic changed the face of the world in more than one way. India of today is a far cry from what it used to be back in the pre-COVID-19 world. Today India is a global super economy worth more than $7 trillion. The once ailing agriculture sector has emerged as the food bowl of Asia-Pacific. The human capital of the country is considered its greatest asset with the world’s largest working population, over 80% now formally trained and now 100% literate.
The manufacturing sector, once trudging diesel engine of the economy, has emerged as a key driver of a mega boost to the economy since the post-COVID-19 reset of global order. The fruits of economic gains didn’t remain untouched from Indian society as now the country has cutting-edge healthcare with “Medicare for all” as well as provisions of women's basic income scheme. The life expectancy in the country is no around 80 years with low non-communicable disease prevalence. India has also emerged as a global model on people-driven initiatives (aka Jan Andolans) on the issue of water and sanitization as well as wastewater treatment.
In short, the new India is everything that our founding fathers once imagined in their tryst with destiny. In this article, let’s explore how such spectacular possibilities can be achieved in a post-COVID-19 world that will be full of opportunities. Following this, we explore the dimensions in which India shall be re-imagined and what constraints we shall need to check on over the way to the goals.
Let’s come back to the present, while our struggle with the pandemic continues, some shortfalls in status quo we have clearly identified, for example, our dependence on essential commodity imports like active pharma ingredients from China, exclusion of vulnerable groups from health care, largely informal economy and food insecurity due to poor value addition in agriculture, etc. Now, once we understand these shortfalls, we naturally move towards seeing the loopholes needed to be filled to achieve our dream transformation. Let’s take a look at the tools at our perusal, one: we have the youngest population of the world which is about to hit the demographic dividend, and two: there is no dearth of talent and innovation in India, as we have seen large numbers of startups mushrooming across the landscape in recent years with some already getting identified as unicorns (read: Dailyhunt, unacademy, etc).
The key would now lie in utilizing the two of them to pave a way forward to the future. First, of all, due to the rising anti-Chinese sentiment in the global value chain, countries are looking at alternatives to move their industries out of mainland China. This can be a massive opportunity for the Indian manufacturing sector as there is no dearth of human capital and labor force in India to absorb the demands of the global value chain. The key lies in clearing down the roadblocks i.e., poor infrastructure, over red tapeism, competitiveness norms, and cost overruns due to delays. For starters non-populistic reforms in industrial regulation, the political will to further reduce the red tape in business regulation. Now, if India emerges as a manufacturing alternative to China, it can create a plethora of jobs from automobiles to newly emerging industry 4.0 like the Internet of things, artificial intelligence, big data analytics, etc. Also, it will bolster Indian industries with capital and technology input that was sidestepped in our high growths (2000-2012), allowing the country to break free from the current low equilibrium trap.
Next, we have already seen our import dependence on essential products getting exposed in the pandemic e.g., as much as 70% of our active pharmaceutical ingredients were imported from China. This is indeed a grave concern for a burgeoning country with a high prevalence of both vectors borne as well as non-communicable diseases. For the new India, in the post-COVID-19 world, there will be a need for self-reliance in healthcare supplies. Plus, our low budget dedication to research and development at less than 1% of GDP is the key cause behind our dependence on imports in the pharma sector. Poor research and development limit our reach in discoveries of new API agents and recalibrations of drugs causing us to depend on foreign research or conventional drugs for our usage. For example, India still uses crocin which many developed countries phased out. The correlation becomes further clear when we see that a country like the USA with a higher R&D budget is always among leaders in medical research. However, widening fiscal space for research is not something we can push just by recalibrating the current budget, we actually require more fiscal strength. This brings us back to our earlier discussion on the economy. As a matter of fact, we know that getting manufacturing capital won’t be enough to power our economy as more than 80% of the workforce is informal in nature. To change this dynamic and to create an “India-make” competitive to global standards, we require investment in formal training as well as infrastructure.
The recently announced National Infrastructure Pipeline is a welcome step towards the creation of the required infrastructure to sustain the economic advancement of India as well as invite foreign businesses. Thus, creating infrastructure will not only create desired competitiveness but also more job formalization causing to broadening of fiscal space for investment in training by the government of the country. This way, we are more likely to reap the benefits of our demographic dividend as well as opportunities of shifting the economic basis of the global value chain.
So far so good, we paved our way for economic growth by formalization while also managing a boost in R&D to reduce import dependence on essential goods like pharmaceuticals. The virtuous cycle of growth has begun but now new challenges await us. As we have seen in the eras of Thatchers and Reagans in the west, the virtuous cycle of growth was often not equitable and income gaps only widened across countries like the USA and UK. This would be perilous in a country like India where wide income gaps already exist and the most vulnerable sections were rendered helpless during the pandemic as seen in the early days of lockdown. Social and economic justice are values enshrined in our constitution as foundational values of governance in the country which no government can choose to ignore. Therefore, with the initiation of a virtuous cycle of growth, the government must look at improving social sector investment e.g., public education, affordable healthcare, etc. sectors that ensure the improvement of quality of life. Right now, we have a new education policy in place but there is still a lack of apt policy action to address the teacher training mechanism. Further, gender skewness in higher education, absence of basic amenities for girls in secondary schools, etc., are the areas where we are still lacking on the ground. Strengthening these areas will not only prepare society for reaping the benefits of demographic dividend in the coming years but also improve the quality of overall life.
Last, but not least the agriculture sector is where we need a renewed focus since it is the sector which is responsible for the employment of nearly half of the work force directly/indirectly. Right now, the sector is plagued with issues like improper food processing, last-mile connectivity for the farmer produce, poor storage, and logistical facilities. Thus, apart from policy reform, the sector requires a larger investment in the capacity build-up, storage facilities with cold storage, more modern granaries, better roads to improve the last mile reach of farmers, etc. only after that the dream of doubling farmer income as promised by Modi government, can be achieved in reality.
India’s response to the global pandemic has won applauds and laurels across the globe. From Mission Sanjeevani to providing HCQ supplies to our neighbors and allies, we have shown the resolve to lead the world out of this perilous time. As a very human-centric and responsible democracy, our footing has strengthened in the world order. Now, as we see the USA crumbling under poor pandemic management and internal political crises, international forums like G-20, NAM, etc. are bound to look at India with awe.
Soon the world emerges from the long night of pandemic, changes are inevitable in the global order for good. The Pax-Americana seems to be unraveling and Pax-Sinica hasn’t fructified as expected by experts, this leaves geopolitical space for Pax-Indica to catch its desired space with a beacon of hope for the future. Challenges, as we discussed, are many but since the days of our national movement when have, we ever succumbed to challenges?