India is set to be the world's fastest growing economy over the next decade, according to Morgan Stanley, replacing the Chinese engine of growth which had dominated the world since the 1990s. Analysts say that GST reforms, along with a growing emphasis on digitization, cashless transactions and telecom connectivity, could take India to double digit GDP growth in the coming years.
While Morgan Stanley is bullish on India, Indians living in India know there are speedbumps on the road to development, ones that are not immediately obvious. The Economic Survey of India released today projects that growth in FY18 will be at 6.5-6.75%, and FY19 will see growth of upto 7.5%. These numbers, and Morgan Stanley's projections, are bright-eyed, but three factors are essential to keep the growth engine from sputtering in the coming years: 1) job growth 2) Better protection against climate crises and 3) Privacy for citizens
Jobs for the youthful millions
India's job growth predicament is clear - while it works to become a manufacturing hub, much of manufacturing is also moving towards automated factories and the use of machines, both of which will rapidly reduce the number of workers needed in factories, plants and farms. And yet, India is one of the youngest countries in the world with an average age of 28 years, and creating jobs for these people is an urgent challenge. The lack of jobs results in violence and unrest, and as we have seen in the rising number of riots in Uttar Pradesh, Rajasthan, Madhya Pradesh and elsewhere - all populations with high birth rates, young people and not enough jobs.
Environmental challenges: the coming war for water
The rising incidence of droughts and water shortages across India's farming belts is becoming a serious concern for a country where a large section of the population still farm for a living. Recurring droughts in some parts of Maharashtra such as Latur have decreased farmer income by over 80% in the last 6 years. This is a serious challenge for a country already beset by food inflation, farmer suicides and low farmer incomes.
However, environment and climate challenges are relatively low in the Indian government's priority list, and deforestation has been rising, urban lakes are catching fire, and droughts are on the rise.
Privacy issues
India is rapidly moving to a digitally-enabled economy, emphasizing cashless transactions, as well as verified IDs to receive social security and other benefits. In the speed to do this however, the political economy has so far brushed aside questions of citizen privacy and consumer protections, as the ongoing case in the Supreme Court against making Aadhaar mandatory for services, illustrates. The architects of Aadhaar in the government and outside it haven't engaged with Aadhaar critics sufficiently enough, and there needs to be a bigger focus on better protections for consumers who don't want to disclose personal details, and don't want their data across various databases linked via a single ID.
