While 2018 World Economic Forum in Davos was highlighted by addresses from various world leaders including the United States’ President Donald Trump, and meetings between the US Cabinet and other world leaders, one of the breakout discussions also involved a discussion on India’s role in the world with a panel moderated by CNN’s Fareed Zakaria to tackle the nation’s development issues.
A Tale of Two Indias
India is on track to become the most populous nations in the world, and to become the world’s third-largest economy.
However, India also is home to the world’s largest number of poor, suffers from a lack of proper infrastructure, and suffers from social problems like corruption, malnutrition, and repression of certain groups.
According to the CIA World Factbook, 27% of India’s population is under the age of 15, and 18% of the population is aged 15-24, with a median age of 27.9 years old.
On one hand, India is a rapidly growing industrial nation, but at the same time, it faces issues with keeping up with its growth and ensuring that citizens are equitably impacted by its growth.
Concerns about Growth & Equality
Zakaria’s discussion included an emotional appeal from Chetna Sinha, the founder of the Mann Deshi Foundation in India. Sinha discussed that India needs to focus on its microeconomy as well as its macroeconomy, to make it easier for everyday people to start businesses, buy and sell property easier, and provide opportunities for women and disadvantaged people.
According to Sinha, India needs to provide opportunities, and infrastructure at the local, district, and state level as well as the national level.
When asked about whether India’s treatment of women lives up to the powerful images of goddesses in Hindu mythology, Sinha described that “when I think of the 500 million women I represent, I tell the investors if you don’t invest in us, you’ll lose the opportunity”.
Sinha also described that women’s rights are an issue of dignity, considering them as an equal person. “if you think of the women who walk 12 hours a day to get water, there is no comparison to the images we see in mythology”.
Subhakar Prabu, the Minister of Commerce and Industry of India echoed some of the sentiments, and when asked how India can catch up to China’s pace of growth, described that India has not seen its potential for growth and that by making the economy people-centric and empowering communities versus focusing solely on GDP growth, India can ensure that communities are benefited in a way that benefits not just corporations, but also normal people.
Another key part of the panel on India’s role in the world was a discussion of financial innovation and administrative challenges.
According to Minister Prabhu, India has moved beyond their old policy of Soviet-Style 5 year plans to 15-year plans with 3-year benchmarks to assess the economy’s progress.
Raguraman Rajan, a former central bank official, discussed the recent demonetisation policy India underwent to reduce the amount of “black money”- laundered cash in the economy- as successful, but acknowledged that issues with infrastructure and recognizing land rights have made it difficult both for government projects, and for private ventures to reach their potential.
Rajnish Kumar, the Chairman of the State Bank of India noted how India’s Aadhaar electronic ID system, a 12-digit unique identity number issued to all Indian residents based on their biometric and demographic data, has enabled the nation to use technology to expand access to banking.
According to Kumar, Indian banks now see themselves as tech companies, and tech companies see themselves as banks, and the walls are disappearing.
Using the universal ID system and the capability of mobile banking in smartphones will expand access to capital and also benefit the microeconomy by enabling local businesses to engage with customers easier and reduce frictions.
India also faces challenges of rampant discrimination not only against women but recently against Muslims and other minorities.
Since the Modi administration took power, the government has cracked down on the slaughter of cattle, and the consumption of beef.
18 Indian states have banned the slaughter of cattle and the Indian government told its Supreme Court that all cows will be provided unique identification numbers, “with a tamper-proof plastic tag linked to a national database, in an effort to prevent cattle “smuggling” within India and beyond its borders.”
Beef stall vendors, butchers, and wholesalers have also been targeted, largely in Muslim and Christian communities. Millions of Indians work in the beef industry, which comprises $4 billion in annual exports.
While cows are sacred in Hinduism, most beef in India actually comes from water buffalos, and not from cattle.
Zakaria also asked Commerce Minister Prabhu about the discrimination against India’s 150 million Muslims, noting that despite having one of the largest Muslim populations in the world, India does not possess a presence of Al Qaeda or ISIS, and the population is largely moderate.
Minister Prabhu responded with a tone of denial, noting that India was founded as a secular nation and that government schemes should be equal to everyone.
According to Prabhu, the state of Uttar Pradesh, where there were recent riots against Muslims which killed one, is trying to determine whether the government has discriminated against its citizens in terms of providing benefits, and that while the government is secular, party officials may be discriminating based off of religion which he does not approve.
Overall, Zakaria’s panel was optimistic while also recognizing some of the major challenges that India faces.
In 2001 Goldman Sachs Chief Economist Jim O’Neill described that the economic potential of Brazil, Russia, India, and China suggested they could become among the four most dominant economies by the year 2050 and coined the term BRIC- while thus far, the growth of the BRIC nations has not superceded the world stage just yet, India’s role in the world is likely to become more prominent as its population grows, and it improves its capacity.