Modi 3.0 | 5 Areas India Must Prioritize

With Narendra Modi returning to power for the third consecutive term, albeit with the support of key alliance partners as BJP fell short of majority this time, the government has already started working on his 125-day plan despite posed with critical challenges of the successive terror attacks in Jammu and Kashmir and nationwide outrage over the NEET fiasco.

Whatever may be the challenges, the government has its tasks cut out for the next five years and must focus on some crucial issues and address them with steadfast resolve. What is that India needs to start work on immediately to be on a steady growth path?

1. Spur growth, boost personal consumption

Rise in personal consumption will accelerate growth in the nation. Despite India clocking a robust GDP of 8.2% in 2023-24, personal consumption (demand for articles of mass consumption) grew by only 4%. Considered the main driver of the economy, personal consumption has been feeble, may be owing to rise in costs and low income. Both urban and rural demand have been sluggish for various reasons and the recovery seems to be extremely slow. With the government’s continued focus on aggressive capital expenditure, major cuts in taxes seems unlikely, but it can deliberate review of GST slabs, which may aid in rationalisation of taxes and decrease the existing tax burden. This may also increase household savings which have seen a decline.

2. Create jobs & initiate focused skill development

Major policy push to create more jobs is imperative to spur personal consumption. Almost half of India’s working age people remain out of the labour force, and the number working women are still lower. Most jobs are low paying and in the informal sector. While 46% workers are engaged in agriculture, a mere 11% in manufacturing. The government, however, is indicating possible positive measures of expansion of production linked incentive scheme to more sectors like furniture, toys, footwear, and more textile segments, empowering MSMEs (medium and small-scale enterprises), improving income levels of women and continued thrust on creating public infrastructure. Travel and Tourism industry must also get a big push as it poised to create 58 million jobs by 2033.

The potential of the dominant youth in the Indian population largely remains untapped. Either they embrace a traditional educational path with little employment prospect or drop out early in school. It would be more helpful if at intermediate school stage, focused vocational training modules leading to geographical-location based high-demand self-employment schemes (including start-up formation, seed grant and mentoring for sustainability) is planned instead of the existing straight jacketed fit-for-all skilling programmes at most places. This will not only create reasonably-skilled experts in different sectors, but also generate a structured pool of organized human resources in sectors such as electronics and electrical maintenance, plumbing, farming, machining, wood and metal work, infrastructure development, healthcare management support, vehicle mechanic and maintenance, food packaging and distribution, textile techniques and supply chain, among others. These courses must be minimally theory-oriented and mostly driven by practical needs. In that way, the disorganized sectors engaged in these areas may be economically consolidated to contribute to their own financial development and national growth.

3. Private investments resurgence

A healthy rise in consumerism is also imperative for revival in private investments that has the potential to infuse new life to India’s economy. The government must take steps to incentivise private investments, like offering investment allowance will really help. Private investments across sectors will also create millions of more jobs at all levels. The government must identify all hurdles in the way of speedy and considerable private investments, of course keeping the larger good in view. Mobilizing large private capital expenditure becomes all the more crucial as public capital spending cannot do the lifting for a long time. Tapping more foreign direct investments will also boost the situation immensely.

4. Push exports to new high & become integral part of global supply chains

India must adequately tap its large young labour force to further increase services exports, considerably boost merchandise exports and agriculture exports. Increasing merchandise exports will certainly reap huge benefits, particularly in sectors including textiles, leather, pharmaceuticals, processed food, marine and handicrafts. This will also push production and create millions of employment opportunities. India should set a target to become the world’s textile manufacturing and export hub by addressing the issues restricting exports of readymade garments. While lifting reasonable constraints on agriculture exports will increase the farmers’ income, addressing the hurdles faced by the MSMEs, which contribute 40% of India’s exports, will also go a long way. India must also work to improve logistics and become an integral part of global supply chains by entering into more free trade agreements with large trading partners. The government must at the same time work towards reducing its debt and fiscal deficit over the coming years.

5. A firm stand on agriculture

The government must bring the controversial farm laws on the table and reach an acceptable solution through discussions with the various stakeholders. Minimum support price (MSP) assurance and adequate credit flows to farmers will certainly ease the existing situation. Creation of adequate storage and cold chain facilities is crucial to save crop wastage and assure stable returns to farmers. Integration of modern farming techniques and research in agriculture will boost production and farmers’ income. The stance on agricultural trade must be clearly underlined, providing the farmers the much-needed assurance. Procurement and distribution of agricultural crops must also be standardized and restrictions on futures trading in oilseeds, pulses and cereals should be lifted.

It is of course unsaid that while pursuing rapid strides in economy and infrastructure, India needs to adopt a holistic and balanced approach where affordable healthcare, superior school and higher education, environmental protection and climate change, and a robust research ecosystem are never ignored. Climate change is the world’s foremost concern today and India is at no less risk. We must grow sustainably as we can never compromise our own existence.