The multi-party cabinet must embark on aspirational programmes and prioritise five key areas—job creation, youth unemployment, economic stability, empowerment, and inclusivity
Prime Minister Narendra Modi unveiled his coalition government on June 10. The 71 members of his government took the oath of office after Modi on June 9, with 11 posts going to coalition allies who extracted them in exchange for their support, including five in the top 30 cabinet posts. Image: PIB/AFP
As the 18th Lok Sabha session commences, Prime Minister Narendra Modi and his multi-party cabinet face a pivotal year ahead. Upcoming elections in Haryana, Maharashtra, Jharkhand, and two Union Territories—Delhi, Jammu & Kashmir—will command attention, impacting 22.7 percent of our GDP with a focus on state-specific issues. This period under the coalition government presents a rare opportunity for policy evolution and collaborative governance, potentially setting the stage for substantial socio-economic progress.
In this background, the new government should prioritise five key areas—job creation, youth unemployment, economic stability, empowerment, and inclusivity to create a lasting legacy. Despite the complexity of these challenges, an early start with the 100-day plan and strategic, selective reforms as a part of the coalition dynamics could lead to lasting progress and development.
ENSURING JOB SAFETY AND EMPLOYMENT FOR ALL
Despite India’s rapid economic growth compared to global peers, the country has struggled to create enough job opportunities for its growing youth population. The recent NSSO survey shows some improvement, suggesting a potential turnaround. However, there is still a need for effective policy measures to ensure sustainable job growth. To tackle this, the new government must focus on job creation and social security measures. This includes providing a comprehensive social security net including health, employment, and skills benefits to over 31.42 percent of the workforce, fostering balanced social and economic growth across sectors.
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Reformative measures are needed to integrate technology with education, preparing youth for 21st-century jobs. One approach is to establish a task force that works across ministries and states to implement digital education initiatives comprehensively. Additionally, democratising technology will enable the development of future strategies based on precise, structured data. For instance, initiatives like the Family ID program implemented by the Government of Uttar Pradesh, helps build a comprehensive social repository, enhancing the effectiveness of welfare schemes and policy implementation.
ATMANIRBHAR BHARAT: INDIA AS A GLOBAL MANUFACTURING HUB
As of 2023, the manufacturing sector accounted for 17 percent of India’s GDP, employing over 27.3 million individuals. With a target to increase manufacturing’s share to 25 percent of the economy by 2025, India is actively positioning itself as a global manufacturing hub.
While the government has plans to strengthen its position within the manufacturing sector, action must follow the rhetoric. As technology transforms the industry, the new administration will implement measures to ease business activities, create attractive policies for foreign companies, and vigorously pursue trade agreements with key global partners. The anticipated National Logistics Policy and Free Trade Agreements will be crucial in fostering a conducive environment for business in India.
The government should also pursue railway sector reforms, encouraging private investment in infrastructure and new manufacturing facilities. In the long term, India could become a leading railway technology and equipment exporter, boosting the economy and enhancing transportation efficiency nationwide.
INDIA AT A GLOBAL STAGE – POWERED BY MANUFACTURING OF COMMERCIAL AIRCRAFT
India must explore manufacturing defence-based goods and focus on the indigenisation of Defence Public Sector Undertakings (DPSUs) to strengthen its position in the sector. A strategic approach to defence manufacturing could involve developing regional clusters with an original equipment manufacturer (OEM)-driven supply chain. The cluster-based manufacturing ecosystem should leverage existing industries, regional capabilities, and other geopolitical factors. Additionally, a private industry-driven ecosystem where DPSUs and other public entities play an important but supporting role in R&D, integration, and more., can be fundamental to ensure the fulfillment of the set ambitious targets.
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Furthermore, to gain a competitive edge and attract external resources, commercial aircraft manufacturing will help shape the next generation of economic growth. This strategic shift will create jobs and stimulate economic growth, further bolstering India’s position as a global leader. To supplement these efforts, the development of centralised MRO hubs in the country should be incentivised, linking the same to dedicated FOEM with access to marginally increasing technology details, which would help gain a competitive advantage.
India has strategically integrated economic diplomacy into its development goals, focusing on securing investments and generating employment. This transformative shift has been driven by actively pursuing new trade agreements and nurturing foreign investment inflows. Emphasising R&D in manufacturing and MRO technologies will be crucial to strengthen this approach further. This policy, informed by a nuanced understanding of global dynamics, could potentially pave the way for increased global influence, enhanced regional stability, and sustainable development for India and the world. By taking a lead at various international platforms and groups such as QUAD, I2U2, IMEC, ISA, and potentially a grouping of Global South countries, India could truly showcase its prowess on the global stage.
NEW-AGE URBANISATION PARADIGM
India’s urban population is projected to reach 675 million by 2035, placing unsustainable pressure on urban amenities in major cities like Mumbai, Delhi, and Bengaluru. This highlights the need for equitable development in Tier 2 and 3 cities to absorb future population growth. However, current urban planning faces significant challenges. Nearly half of India’s urban settlements are classified as census towns but are governed as rural entities. Furthermore, existing definitions of ‘urban’ fail to capture the full extent of India’s urbanisation, necessitating updated planning strategies. Improving urban planning and addressing these challenges are essential for sustainable urban development and economic growth.
Parallel urban development is crucial for managing India’s growing urban population, projected to reach 50 percent in the coming decades. Establishing counter-magnetic cities near existing urban centers can accommodate this growth, serving as models for economic and urban development. These cities should adhere to modern urban planning norms, including robust transit networks and strong commercial and social infrastructure. Besides this, there is a need to amend RERA through wider stakeholder consultations to enhance transparency and accountability.
COMMITMENT TO NET-ZERO AND A CLEAN ENERGY FUTURE
India is a significant player in the global energy economy, with increased energy consumption since 2000 due to a growing population. The affordability and reliability of energy supply are key concerns for consumers. Currently, coal, oil, and solid biomass meet over 80 percent of India’s energy needs, with coal dominating electricity generation and industrial use. Despite expanding LPG coverage, 660 million Indians still rely on traditional cooking fuels. Transitioning to a gas-based economy requires an added focus on piped natural gas (PNG) adoption.
As a signatory of the Paris Climate Agreement and an active participant in COP discussions, the government must significantly increase its share of renewable energy. A decisive shift towards solar, hydro, and tidal energy for residential and commercial use should be a cornerstone of the 100-day plan. India faces challenges such as recent heatwaves, depleting groundwater resources, heightened power generation, and coal dependency, highlighting the need for urgent action.
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Niti Aayog’s data highlights alarming land-use trends, emphasising the need for a robust, transparent data network to effectively decarbonise India’s future. This network would provide real-time updates on energy generation, capacity, and land changes crucial for achieving net-zero emissions goals.
WAY FORWARD – NEED TO INCREASE PRIVATE INVESTMENT
In the past decade, increased capital expenditure and infrastructure development have significantly influenced India’s economic growth. As the 18th Lok Sabha commenced on June 24, the NDA government is strategically leveraging the appeal of infrastructure investment as a fiscal stimulus, with plans to double spending to Rs 143 lakh crore in the FY2024-2030 period compared to FY2017-2023.
While this approach holds promise, there are inherent challenges. Relying solely on increased capital expenditure can strain public finances. To mitigate this, the government should explore innovative models encouraging private investment and public-private partnerships. Moreover, these initiatives represent an opportunity for India to address immediate economic and social challenges, positioning the nation as a progressive and influential global player. The government must embark on aspirational programs as India navigates this historical moment amidst a dynamic geopolitical landscape and shifting governance paradigms.
