Beyond Economics

Vikshit Bharat 2047 represents a transformative leap forward, embodying India’s commitment to emerge as a global economic powerhouse, a socially equitable and environmentally sustainable nation, underpinned by transparent governance. This ambitious project marks a critical phase in India’s new developmental journey, which began in the 1990s. Over the past 75 years, India’s economic landscape has undergone a profound metamorphosis despite challenges posed by climate change. From being the 10th largest economy globally, India has catapulted to the fifth position. According to Price Water Coopers’ projections, India is poised to become the world’s third-largest economy as early as 2030, with its GDP potentially surpassing that of the USA by 2060. This remarkable growth trajectory is underscored by a significant of the agriculture sector from 56 per cent to 20 per cent, while the service sector has experienced exponential growth, accounting for over 50 per cent of the country’s GDP. As the nation strives for rapid economic growth, it must navigate the complexities of sustainable development, balancing economic progress with environmental stewardship and social equity.

Economic Inclusion and Digital Governance

India’s strides in economic inclusion, digital governance, and sustainable development are noteworthy. The Pradhan Mantri Jan Dhan Yojana (PMJDY) has brought over 500 million people into the formal banking system, with a significant focus on empowering women, who hold over 55 per cent of these accounts. India’s digital public infrastructure, including Aadhaar and UPI, has received acclaim. UPI has become a preferred mode of transaction, with nearly 38 per cent of individuals in rural and semi-urban areas opting for it. The government has made significant progress in harnessing renewable energy, with over 40 per cent of power capacity coming from non-fossil fuel sources, surpassing the Paris Agreement targets.

However, concerns arise regarding the risks associated with increasing dependency on the digitization of governance, including limited spaces for citizens to complain, protest, and demand accountability, as well as cybersecurity risks to digital financial systems. To address these challenges, it’s essential to implement measures that ensure inclusive governance and strengthen cybersecurity measures. India’s leadership capacity in international forums like the G20 has showcased its commitment to sustainable development and economic growth. The New Education Policy aims to upskill the workforce, preparing them for the jobs of the 21st century. India’s progress toward achieving the Sustainable Development Goals (SDGs) is notable, with a score increase from 57 in 2018 to 71 in 2023-24. However, there’s still much work to be done, particularly in areas like poverty reduction, gender equality, and environmental sustainability.

Sustainable Development and International Leadership

Scandinavian countries offer valuable lessons for India’s sustainability agenda. Norway’s sustainable governance model demonstrates how sustainable governance can ensure sustainable economic development. Denmark’s government policies promote renewable energy sources, while Sweden’s circular economy model minimizes waste and maximizes resource efficiency. Estonia’s e-governance model showcases the effective use of technology to reduce bureaucracy, increase transparency, and enhance citizen engagement. India’s administrative system, however, needs reform. The massive expansion of departments in the central government, currently numbering 53 ministries and departments, has led to fragmentation within and across sectors. In comparison, countries like the USA, China, Canada, Germany, France, Japan, Australia, and the Philippines have more streamlined administrative systems.

Cooperative Federalism and Governance Reforms

To successfully implement the Vikshit Bharat agenda, India should focus on strengthening its data systems, enhancing multi-level governance, aligning budgeting with local priorities, promoting capacity building, and fostering public-private partnerships. India’s cooperative federal system is crucial for ensuring active participation from all tiers of government. The growing dissent among opposition-ruled states on issues like the New Education Policy highlights the need for dialogue and cooperation. India’s local bodies have indeed received a new lease on life since the 1992 constitutional amendments, which aimed to create participatory structures for citizen engagement and enhance transparency in governance. These local bodies, along with Civil Society-Based Organizations (CBSOs), played a vital role in tackling the COVID-19 challenge, demonstrating the effectiveness of collaborative governance. The devolution of funds, functions, and functionaries to state governments is a significant challenge. Many state governments are reluctant to devolve these simultaneously, hindering the effective implementation of policies. Strengthening local governments, such as gram sabhas in villages and ward committees, is also essential for citizen engagement.

The Right to Information Act provides for mandatory disclosure of information to citizens. The government should take the initiative in bringing civil society groups together to promote this cause. India’s experience with cooperative federalism has been mixed. To address the challenges facing India’s cooperative federal system at the local level, another round of constitutional amendments may be necessary. This could involve enhancing dialogue between the centre and states, investing in capacity-building programs for regional governments, and encouraging civil society engagement. The 14th Finance Commission’s decision to increase state governments’ share in tax devolution by 10 percentage points is a step in the right direction. The existing arrangement for CSSs has raised concerns, particularly regarding the disproportionate funding received by larger states, which may create an imbalance in resource allocation. Empowering local governments is crucial for promoting cooperative federalism. This can be achieved by enhancing their decision-making powers and increasing their financial resources. By addressing these challenges and promoting cooperative federalism, India can foster more effective governance and achieve its development goals. Additionally, centralized CSSs often hinder states’ ability to address specific needs, undermining their autonomy in expenditure decisions. The Inter-State Council, which has become defunct, should be revived to discuss these concerns.

Addressing Inequality and Social Mobility

India’s low ranking in inequality and social mobility indices is a pressing concern. The World Inequality Report 2022 highlights India’s stark disparities, with the top 10 per cent and 1 per cent of the population holding 57 per cent and 22 per cent of the national income, respectively. The wealth distribution in India is also highly skewed, with upper-caste Hindus owning 41 per cent of the country’s wealth. In comparison, Scheduled Tribes and Hindu Scheduled Castes own only 3.7 per cent and 7.6 per cent of the property, respectively. To tackle these disparities, India needs to establish a dedicated office under the Prime Minister’s charge to monitor the implementation of the Vikshit Bharat programme, similar to those in Malaysia, Indonesia, or the USA. Additionally, a new post of Cabinet Secretary rank should be created to ensure high-level bureaucratic coordination. The bureaucracy’s reluctance to accept external experts in governance is a significant challenge. Lateral entry has been accepted as a policy, but progress has been slow. Improving social mobility requires a multi-faceted approach, including increased investment in education, promotion of geographical mobility, focus on youth development, and implementation of social protection measures. By addressing these concerns and implementing targeted initiatives, India can work towards reducing inequality and improving social mobility. India’s working-age population is expected to surge, with estimates suggesting it will reach 68.9 per cent of the total population by 2030. To capitalize on this trend, India must invest in human capital, particularly for women, to enhance employability and increase female labour force participation rates. Addressing deep-seated patriarchy and misogyny is crucial to empowering women and promoting inclusive growth. Policy initiatives, such as quota systems in local bodies, Parliament, and state legislatures, can help drive this change.

Harnessing Demographic Dividend

To harness this demographic dividend, India should equip its working-age population to interact with citizens, gather feedback, and implement programs effectively, drawing inspiration from successful models in Brazil and Mexico. The country needs to focus on education, skill development, and healthcare to boost employability and productivity. India’s development goals, as outlined in the Viksit Bharat vision, require a proactive and inclusive approach. The country needs to develop a political consensus on these issues, which can be achieved through multilevel discussions. By working together, India can create a brighter future for all its citizens.

Views expressed are personal