Roadmap for Reforming India
Vinay Chaudhary – Student, Kautilya
Recently India celebrated it’s 75 years of its independence on the very occasion- the PM talking about the economic achievements of the country also mentioned that India became the 5th-largest economy which is an extraordinary feat despite all the achievements in various fields, we still have a long way to go before we become a developed economy.
The recently published report, Global Multidimensional Poverty Index points out that 16 percent of our population lives below the poverty line and a large population of the country still depends on government schemes and support in a major way as was visible during the covid19 lockdown when the government under Pradhan Mantri Garib Kalyan Anna Yojana extended ration cover to 80 crore people.
From the 1950s, we saw industrialization in East Asian countries and the resultant prosperity in places like Japan, South Korea, and Taiwan which widely became popular as The East Asian miracle, meanwhile India despite having a decent economic size (one of Asia’s largest economies in 1950s) lagged behind its Asian peers largely due to its closed economy & protectionist economic policies such as ‘The Monopolies and Restrictive Trade Practices Act 1969’, nationalization of several key sectors including coal mines, banks and airlines which made India an unattractive place to invest.
Reasons are plenty but one major cause was the failure of our economic policymaking as it lacked both clarity and coherence, In 1970s Indian government came up with a system later known as “License Quota Permit” under which the government regulated & controlled the production and distribution of goods, a result of this approach was the infamous MRTP Act which discouraged both foreign & local industrialists from investing in the country as the incentive to make a profit for the private sector was gone. This policy approach was reversed in 1991 when the government of the day launched the landmark LPG reforms which resulted in the opening up of the Indian economy which benefited India.
The period between 2022-2047 is crucial as India has the largest young population in the world & is the only major economy that is still growing at a quick rate. All this is happening against the backdrop of the global economy slowing down due to Covid-19 and the Russia-Ukraine conflict. These two global crises have presented an opportunity to India in terms of attracting industries that can make India a manufacturing giant. It is now important that we don’t repeat the mistakes of the socialist era & make the most from the Amrit Kaal of the next 25 years (till 2047).
Eminent economists like Arvind Panagariya and Jagdish Bhagwati have suggested several reforms to the Government & some of which have been implemented by the Government like ‘The insolvency and Bankruptcy Code’, GST & now the ‘Labour Code 2020‘ which is expected to make doing business simpler while also safeguarding the interest of workers but now there is a need of comprehensive reforms across various sectors and domains if we want to achieve our full economic potential.
The first major area of reform should be education as our education system is based on rote learning which does not help the child to think critically and holistically. NEP 2020 suggests investment in the STEM (Science, Technology, Engineering, Mathematics) should increase where our focus should be on Technology, Research, and Skilling domain as that will help us in developing our domestic research and development culture & stop the brain drain out of the country.
Health is another crucial sector where urgent policy interventions are required, economic survey shows Health Expenditure FY23 at 2.1 percent of GDP is still low. Health is considered the most powerful human capital and investment in healthcare is crucial as no nation can truly grow without a healthy and productive population.
The Criminal Justice System of India requires urgent reform due to its archaic nature. Eminent thinkers like Vijay Kelkar and Ajay Shah suggest in their book ‘In Service of The Republic’ that reforms are needed, as they emphasize on the quick disposal of criminal cases is important to reduce the burden of pending cases but also to ensure speedy justice. This would require the adoption of transparent measures such as the use of technology and the hiring of more judges.
Another arena of reform is by focusing on making India an attractive manufacturing location as supply chains shift away from China land acquisition process should be simplified so that ease of doing business actually becomes a reality and in this regard, the recent ‘National Logistics Policy 2022‘ and PM Gati Shakti scheme can prove to be gamechanger.
Last and perhaps the most fundamental reform should be in how we govern our country as red tape in bureaucracy and inefficiency stalls our economic potential, we should start by implementing the 73rd & 74th amendment Act by decentralizing to the lowest level by granting financial and executive powers to city & panchayat level governing bodies where most of the issues lie.
India will celebrate its 100 years of independence in 2047. There will be a lot of challenges that India will face during the next 25 years, but what matters the most is that these reforms, if done well, would lead our future generations into a developed, prosperous, and truly independent India as envisioned by our forefathers.