By Balbir Punj
The 2024-25 budget is a smart fusion of political stratagem, coalition compulsions and a slew of deft moves to accelerate economic growth to help realise PM Modi’s resolve to turn India into a developed nation by 2047. However, given the domestic constraints and dismal emerging global economic scenario, the NDA Government’s quest to make India a global financial powerhouse is fraught with serious challenges.
The wars in Ukraine and Gaza have disturbed global supply lines and devastated the world markets a great deal. No wonder the latest forecast for global growth five years from now, at three per cent, is the lowest in decades. The rise of India would be hamstrung by a bleak international scene, for a vibrant Indian economy will need to increasingly engage with the rest of the world.
The budget is undoubtedly an exercise to retrieve the political ground the BJP lost to the opposition in the last Lok Sabha polls. But it’s not populist or irresponsible. The underlying theme is fiscal prudence and consolidation. The promise to peg the fiscal deficit at 4.9 per cent of GDP in 2024-25 is a significant reduction from 5.6 per cent last year. Finance Minister Nirmala Sitharaman has also reiterated her resolve to reduce the deficit to below 4.5 per cent by next year.
The misgivings about India emerging as a developed nation over two decades from now aren’t entirely misplaced. India faces some insurmountable challenges that are difficult to deal with, particularly with a fractured polity that has evolved post-2014. Outrageous toxic narratives – completely divorced from facts and reality – are banded about to derail the public discourse. ‘Caste-identity’ – a divisive signature tune – is the season’s flavour.
What’s the basis for believing that Modi’s vision of a developed India is not just a pipe dream but something doable? His track record. During his previous two terms, Modi managed to break the mould. Defying the system, he ensured the delivery of benefits to ordinary people sans any leakage.
Modi made available gas connections, foodgrains, toilets, housing, drinking water, and road connectivity to crores of Indians. As a result, poverty levels dropped drastically, and today, India is among the world’s fastest-growing large economies, with a GDP growth above eight per cent.
But here is the proverbial catch. The aspirations of millions who have moved out of morasses of poverty have since outgrown what the state freebies can offer. This exploding phenomenon is full of unchartered challenges and unexplored opportunities for the country.
The expectations of India’s young millions have soared to unprecedented levels. They now want access to a decent standard of living. But can India meet their aspirations? Seven red flags can hold the country back and sour its dreams.
#Education and Jobs: Among the “real” challenges India faces, the Economic Survey (2023-24) has outlined the lack of jobs. According to the survey, the country must create an estimated 78.5 lakh jobs annually. The government has launched five schemes to fix the problem. It’s a patchwork solution and leaves the core of the problem untouched.
The issue is not unemployment. It’s that of ‘unemployable’. Leaving aside some islands of world-class academic excellence, most organisations styling as educational institutions don’t dispense education or talent but degrees. The state-run educational system is broken. There is no serious effort to resurrect it.
According to the 2023 Annual Survey of Education, almost a quarter of all youth (14-18 years) cannot fluently read a class 2 text in their regional language. Only 43% can solve simple division sums.
There are millions of slots waiting for qualified candidates. India ranked seventh in a talent shortage, with 81 per cent of employers reporting difficulty finding a skilled workforce. The skill gap is estimated at 2-2.5 million. It’s difficult to miss the irony – millions of jobs are going abegging, and countless remain unemployed.
Rising Trade Gap with China: India-China trade touched almost $118 billion, with India’s exports at only $16.67 billion, with a trade deficit of over $100. The Economic Survey has termed it a “challenge”, a “Chinese Conundrum”, and a problem sans a solution. There appears to be no escape from the fact that China would continue to be the overbearing trade partner, with sinister implications for India’s security.
Bureaucracy: Rampant corruption and inefficiency have been India’s bane. To Modi’s credit, corruption is nearly extinct in the top echelons of politics and babudom at the centre. However, the twin evils of graft and sloth continue to gnaw at the system from within. The raging NEET controversy and the scandal involving Puja Khedkar, a probationary IAS officer (now under investigation), underline the unsavoury fact of the extent to which the rot has set in. No plans, however perfect they may be, can work till the delivery mechanism is fixed.
Judicial Reforms: To repeat an adage, justice delayed is justice denied. These statistics speak for themselves. In 2024, the total number of pending cases of all types and at all levels stood at 5.1 crores, including over 180,000 court cases pending for more than 30 years in district and high courts.
Agriculture: The growth in agri-GDP in 2023-24 (FY24) was just 1.4 per cent as per the latest provisional estimates. The second advance estimate was, in fact, only 0.7 per cent. This sector engages 45.8 per cent of the workforce. Most of those claiming to be ‘kisans’ are, in fact, victims of disguised unemployment. Giving 5 kg/per capita/month of free rice or wheat is a dole. Vested interests (read so-called farm protests of 2020-21) successfully sabotaged all efforts to introduce reforms in this sector. This large section of India’s population has to be partnered in the country’s success story.
Distorted Narratives: Foreign-funded groups have been hijacking popular mandates using globally tested tool-kits by building narratives based on white lies, half-truths and twisted facts. The ‘toolkit’ was used during India’s CAA and farm law protests.
Power Outage: Per capita electricity consumption in India jumped from 16 units in 1947 to 1327 units by March 2023. However, India’s transmission and distribution (T&D) losses are very high by global standards because of corruption, theft, and the inefficient handling of conductors and transformers. As a result, an enormous investment is unproductively locked in Gen sets and inverters. For India to become a developed country, it must change.
(Columnist is senior journalist, author and former Chairman of Indian Institute of Mass Communications. Views expressed in the above piece are personal and solely those of the author.)