India Ahead: Need a plan to become a developed country

The scorching summer heat is finally giving way to the monsoon rains, bringing cool respite across the country.

People are rushing to buy umbrellas, raincoats and gumboots and dropping their children to school as most schools also reopened this week. Farmers are beginning Kharif sowing.

Amidst these seasonal routines, the most anticipated event of the year has just unfolded: Narendra Modi took the oath for his third term as Prime Minister on Sunday.

A friend asked me what has changed in India post-election. My response? "Nothing," I said with a chuckle. The Prime Minister, Home Minister, and Finance Minister remain the same, and so do the opposition leaders. The only changes are a few numbers here and there.

I must share with you that I enjoyed watching the video of the oath-taking ceremony of Mohan Charan Majhi, the BJP leader who was sworn in as Chief Minister of Odisha on Thursday. The former CM, Naveen Patnaik, who holds the record for the longest tenure as a state CM in India, was also invited to the event where PM Modi and other BJP leaders graciously greeted him. I think such moments of mutual respect among political rivals truly showcase the spirit of democracy.

Now that the ministers have been sworn in and the new Union Cabinet is formed, the big question is: What's on the government's agenda? Analysts, researchers, economists and my fellow journalists are busy deciphering the government's 100-day plan.

On one side, there are soaring expectations; on the other, pressing issues that need attention. Here are my thoughts on what the government should focus on in its 100-day plan. I've covered employment issue extensively in my previous notes, so I'll skip that topic this time to avoid repetition.

ALSO READ: Modi 3.0: Economy and jobs

Indian Economy - Macro factor

I have said many times macroeconomic factors are propelling India forward at a great speed, but we need to align the micro factors to sustain this momentum.

If India is going to become the third-largest economy and reach a size of $7 trillion by 2030, what does this mean for the people? Will they enjoy the same benefits as citizens of developed countries? Currently, India's per capita income is under $9,000, compared to $76,000 in the US and $21,000 in China.

A former RBI Governor had warned that while we are the youngest country in the world, without the right strategies and hard work, we risk becoming a nation with widespread unemployment.

Finance sector roadmap

The government will present the Union Budget in July and I think it should work on these issues. While a lot has been done on the taxation front specifically GST, there are pending amendments and the middle class is seeking less burden of taxation. The government has already committed to spend Rs 4 lakh crore for PM Awaas Yojna and unveiled dozens of health, life and farmer insurance schemes. However, the country needs economic inclusion along with financial inclusion.

And there is no better time than now, since every rating agency and financial institution is betting big on India. Will the government privatise a few more small public sector banks? How will they look at PSU insurance companies? More importantly, how they will manage the fiscal deficit is a key question the finance world has. Along with this, how the government is going to spend and what strategy it will adopt to reduce debt are going to be the major focus areas.

Emerging sectors like fintech should get more attention and support to expand internationally. The Singapore-India corridor of UPI started but it has still not picked up and systems are still undergoing trials. BFSI companies are also desperately looking for updates on the data protection bill.

Ease of living

The finance minister has said that ‘Ease of Living’ will be high on the agenda.

From labour laws to corporate work cultures, a lot needs to change. Of course, the government's role may be limited, but it can certainly provide guidance. Currently, companies prefer to establish operations in metro areas due to better facilities, which strains these cities and affects the ease of living. Labour laws must protect workers, ensuring they are not exploited.

Companies complain about the lack of workers but they also make them work in the sweltering 45 degrees without enough facilities. Remember, the people who suffered the most during the pandemic were construction workers. Because the contractors closed their sites the labourers had no alternative but to leave and walk hundreds of miles to their native places. So when the government is thinking of Ease of Living, they need to plan for the next 20-25 years. Are we really planning for the future? We should not aim to build Shanghai or Dubai, but India. Our problems and demography are very different and we need indigenous solutions. It's high time, the government and specifically municipal corporations focus on recycling and sustainability.

Agreed, the government cannot do everything, but it can certainly set the direction. Initiatives like the Swachh Bharat Abhiyaan have already made a difference. With a high entrepreneurial spirit, young talent, and the world's spotlight on India as a major market, we must seize this opportunity.

The global economy faces numerous geopolitical challenges, and India has a unique chance to make a significant impact, not just for the next 100 days but for years to come. This is our moment to realise the vision of 'Viksit Bharat'.

Desperate times call for desperate measures.

Well friends, we are holding our FinTech event in Bengaluru today, where top industry mandarins will deliberate on the issues before the industry and the journey of the promising sector. Join us to participate in the lively discussion. Click here.

(Editor's View is a column written by Amol Dethe, Editor, ET BFSI. Click here to read more of his articles exploring several buzzing topics.)