People’s Mandates since Independence

The first general elections of 1951 in independent India installed a single party-(Indian National Congress INC for short), majority government at the center as also in all the states. The trend continued till 1976. The political power at the center changed for a brief period of three years from 1977 to 1980. In the general elections of 1980 and 1984 the same old political party returned to power. It was only in 1989 that a long period of coalition governance started in India that continued for the next twenty five years. In 2014 the old trend of single party majority government returned at the center and bulk of the states but with a different political party (Bhartiya Janata Party- BJP for short). The new political dispensation continues till date– seven years in a row^{[1] [2] [3]}.

It will be interesting to compare the broad performance of two sets of single party stable governments for the first twenty four years after independence from 1952 to 1976 with that of the government from 2014 to 2021. To keep the discussions very objective and beyond politics we will stick to macro-economic headline numbers, reduction of poverty, increase of literacy, trends of major decisions during these periods in a relevant global context. This will help us to address three important questions:

• Are there transformational and irreversible changes underway?
• What are the major challenges in continuing with the process of transformation?
• What is India’s future in global positioning should the process of change continue for the next few decades?

India’s Strategic Decisions and Growth 1952-1976

Some of the major strategic decisions that were taken during the first 24 years i.e. 1952 to 76, included reasonable restrictions on free speech (constitutional amendment 1951), nationalization of Air India 1953, Essential commodities Act 1955, Life Insurance nationalization 1956, Nationalization of Banks 1969, Agricultural prices commission, Nationalization of sick textile mills 1974, Bonded Labor Act (Abolition) 1976, declaration of national emergency on 25 June 1975 which continued till 21 March 1977. There were a total of 42 major constitutional amendments during these 24 years including amendment to preamble to the Constitution of India in 1976 during national emergency^[4].

The focus of these decisions was on control, nationalization, major reforms aimed at increasing the role of the state in pricing, agriculture and distribution. How far did these decisions help? Numbers given in tables 1 and 2 tell the story.

Table 1: Macro Economic Headline Numbers-1952-1976 ^{[5] [6] [7]}

Source: End notes ^{[5] [6] [7]}

Table 2: Poverty and illiteracy Reduction1952-1976 ^{[8] [9] [10]}

Source: End notes ^{[8] [9] [10]}

The literacy rates are taken from the census done in 2001. One of the high lights of this census is that for the first time since independence the absolute number of illiterates in India decreased in 2001. Before this the increase in population was higher than increase in number of literate Indians.

Global Environment 1952-1976

How did India grow in relation to its peers? In global context while South Asia grew at an average rate of 1.7 percent in GDP per capita and developing countries grew at 3.4 percent during 1950 to 1975, India grew at 1.5 percent in 1950 as also in 1975. The unweighted average of 16 countries that were included in the study was 2.8 percent between 1950 to 1975. Incidentally Pakistan grew at 3.2 percent from 1960 to 1975. Overall, India ranked 66th among 77 nations that were compared. Thus regionally as also internationally India remained close to the bottom of the table in most indices of economic growth and human development for the first period of stable single party government at the center and most of the states^[11].

Strategic Decisions and Growth 2014-2021

On 26 May 2014 a different political party came to power at the center and many of the states. Within three months i.e. on 15 August 2014, the new government introduced Jan Dhan Yojana that paved the way for financial inclusion of 40.35 crores Indians who had no bank accounts till 2014 and also brought in Rs 1.31 lakh crores in the banks^[12]. This was followed by a series of complementary decisions to reshape the political economy of the country. The Real Estate (Regulation and Development) Act to eradicate corruption in the real estate sector by protecting the interests of the home buyers was also introduced^[13]. Arbitration and Conciliation (Amendment) Act- the 1899 vintage law on arbitration was changed to ensure speed of resolution (arbitration to be completed with-in 12 months^[14]. Adhaar card was institutionalized on 26 March 2016 (to ensure leakage proof distribution of benefits and subsidies to the intended population^[15]. Benami Transaction (Prohibition) Act, the 1988 law on Benami transactions (purchase of property in one person name and financed by another) was strengthened. This resulted in Rupees 600 crores worth of property being attached^[16]. Goods and Services Tax (GST) was the biggest reform push that replaced eight central and nine state taxes^[17]. Corporate Tax was also reduced in September 2019 from 30 percent to 22 percent and for new enterprises in manufacturing a corporate tax of 15 percent was introduced^[18]. The government infused 2.11lakh crore in to the banking system in order to mitigate the weaknesses due to Non-Performing Assets^[19]. In 2021 the government reformed the FDI norms opening up India to foreign investment^[20]. This has made India one of the top destinations for investments by foreign investors.

Besides the above decisions to transform India’s political economy some far reaching decisions were taken to uplift the poorest in the country. These decisions include Swachh Bharat Abhiyan^[21], Prime Minister Awas Yojana^[23], Ayushman Bharat Yojana^[24], free cooking gas to the poorest households^[25].

In the geo political domain removal of Articles 370 and 35 A, Balakot Strike, Resolution of Ayodhya legal case, opening up to Israel, Taiwan and major Islamic nations marked a new trajectory defining India’s assertiveness.

The new government also made some important changes to the Indian Constitutions establishment of National judicial commission 99th amendment in 2014, Goods and Services Tax (GST) 2016, advancement of the economically weaker sections of society. A big 10% of all government jobs and college seats will now have a reservation for people outside the high-income bracket 103rd amendment^[26].

The thrust of decisions during the last seven years since 2014 has been at three levels. Eliminate the weaknesses in already existing laws by ensuring better processes for implementation. Second, open up the economy to private sector. Third, uplift the bottom of the pyramid by ensuring leakage proof transfers and benefits. Fourth, adopt an assertive and proactive geopolitical posture.

How did these series of decisions impact the Indian people? Figures in Table 3 and depict speed and volume of change.

Table 3 Macro-Economic Headline Numbers: 2014-2021 ^{[27] [28] [29]}

Source: End notes ^{[27] [28] [29]}

Table 4: Poverty and illiteracy Reduction: 2014-2021 ^{[30] [31] [32]}

Source: End notes ^{[30] [31] [32]}

(*During the pandemic the poverty rate had increased to 12 percent that has been brought down between 7 to 10 percent recently)

Besides the above numbers some of the other impacts at the bottom of the pyramid include adding 43.81 crore people to the banking system, removing the ignominy of open defecation in India, building 2.13 crore houses for the poor, giving free cooking gas connections to 8.7 crore homes; extending medical insurance to 25.6 crore people, linking 1.71 crore farmers under e-market^[33]. During the period 2014 to 2021 per day average of high way construction rose to 25 kilometres, three times more than the previous regime^[34]. In 2021 the average length of highways constructed per day jumped to 36.4 kilometers^[35]. In rural India roads measuring 2.33 lakh kilometers were constructed during the last seven years^[36]

India in the Global Context 2014-2021

The IMF on 12 November 2021 projected India’s growth at 9.5 percent in the current fiscal and 8.5 percent in the next fiscal. Both these are highest growth rates in the world^[37]. India has fourteen companies in the top one thousand fastest growing companies in the world in 2021^[38] ahead of developed countries such as Japan, South Korea and Israel. There are 150 Indian companies that are propelling the national economic growth. The fastest growing companies in this group came up in 2014 (two) and 2015(seven). Many of the companies in this group are innovation driven tech enterprises. The growth rate of companies that came up in 2014 and 2015, ranges from 77 percent to 4449 percent^[39].

Conclusion: Is this India’s Irreversible Transformation? Challenges and Future Geopolitical Positioning

The available facts indicate that the changes during the last seven years are irreversible and transformational in nature- for three main reasons. First though the Indian growth story brightened up in 1991, the trigger for major macro-economic decisions came from the IMF. In 2014 the process of change began from within without any external pressure. Again during the period from 1991 to as late as 2014 the global economic environment (at least till 2008) was buoyant. Even from 2008 to 2013 the global melt down due to the US slow-down was mild. The period from 2014 to 2021 included one and half years of pandemic which was a global disaster. The globally accepted fact that India is leading the economic recovery in the world indicates a new vigour and pursuit of excellence which was hitherto missing in India. Even after the liberalization in 1991 India was never the fastest growing economy. Secondly, the vision, strategic intent and zeal to implement have been vastly different during the last seven years compared to what these were earlier. Thirdly, from all surveys and electoral predictions it has become evident that the current political leadership is likely to stay for a considerable period of time. This may be a long enough period to change the narrative for good.

There are a few intimidating challenges in sustaining the current growth. First, to maintain social harmony in the face of excessive internal pressures from the political narratives that was prevalent for the past seven decades. Second, the external pressures from countries inimical to India’s interests. The third challenge would emerge from a very vast population that is illiterate, semi-literate and accustomed to doles, freebees, and narrow parochial interests. India needs to spend much more on education, research and awareness programmes.

If India is able to sustain the current trends and manage the challenges by nudging the relevant quarters to fall in line then by the start of the next decade India would be a force to reckon with and may enter efficiency/innovation driven growth trajectory.

Endnotes :

^[1]
https://eci.gov.in/files/file/7448-first-general-elections-in-india-vol-i-1951-1952/
Accessed 28 November 21

^[2]
https://www.elections.in/parliamentary-constituencies/1957-election-results.html
Accessed 28 November 21

^[3]
https://www.elections.in/parliamentary-constituencies/2014-election-results.html
Accessed 28 November 21

^[4]
https://www.bankexamstoday.com/2018/01/list-of-important-constitutional.html
Accessed 28 November 21

^[5]
https://theunbrokenwindow.com/Development/MADDISON%20The%20World%20Economy--A%20Millennial.pdf
Accessed 28 November 21

^[6]
https://www.statista.com/statistics/263771/gross-domestic-product-gdp-in-india/
Accessed 28 November 21

^[7]
https://statisticstimes.com/economy/country/india-gdp-per-capita.php
Accessed 28 November 21

^[8]
https://pdf.usaid.gov/pdf_docs/PNACR801.pdf
Accessed 28 November 21

^[9]
https://archive.pib.gov.in/archive/releases98/lyr2003/rsep2003/06092003/r060920031.html#:~:text=Literacy%20rate%20has%20increased%20to,shows%20an%20increase%20of%2011.72%25
Accessed 28 November 21

^[10]
https://www.livemint.com/news/india/a-short-history-of-indian-economy-1947-2019-tryst-with-destiny-other-stories-1565801528109.html
Accessed 28 November 21

^[11]
https://documents1.worldbank.org/curated/en/187411468161372611/pdf/multi0page.pdf
Accessed 28 November 21

^[12]
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1749749#:~:text=PMJDY%20was%20announced%20by%20Prime,address%20on%2015th%20August%202014
Accessed 28 November 21

^[13]
https://mohua.gov.in/upload/uploadfiles/files/9-1569.pdf (RERA)
Accessed 28 November 21

^[14]
https://www.mondaq.com/india/arbitration-dispute-resolution/1048504/the-arbitration-and-conciliation-amendment-act-2021
Accessed 28 November 21

^[15]
https://www.theweek.in/news/india/2018/09/26/aadhaar-through-the-years-quick-timeline.html
Accessed 28 November 21

^[16]
https://prsindia.org/files/bills_acts/acts_parliament/2016/the-benami-transactions-(prohibition)-amendment-act,-2016.pdf
Accessed 28 November 21

^[17]
https://cbic-gst.gov.in/CGST-bill-e.html
Accessed 27 November 21

^[18]
https://economictimes.indiatimes.com/news/economy/sitharamans-tax-cut-move-why-it-matters-so-much-for-india-inc-economy-and-modi Accessed 28 November 21govt/articleshow/71228078.cms?from=mdr
Accessed 28 November 21

^[19]
https://economictimes.indiatimes.com/industry/banking/finance/modi-govt-announces-mega-rs-2-lakh-11-thousand-crore-bank-recapitalisation-and-rs-7-lakh-crore-road-plan/articleshow/61202075.cms?from=mdr
Accessed 23 November 21

^[20]
FDI Reforms https://dpiit.gov.in/sites/default/files/FDI-Reforms-11June2021.pdf
Accessed 26 November 2021

^[21]
https://swachhbharatmission.gov.in/sbmcms/index.htm#:~:text=Under%20the%20mission%2C%20all%20villages,million%20toilets%20in%20rural%20India
Accessed 18 December 21

^[22]
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1749749#:~:text=PMJDY%20was%20announced%20by%20Prime,address%20on%2015th%20August%202014
Accessed 28 November 21, https://pmaymis.gov.in/#:~:text=Pradhan%20Mantri%20Aawas&text=Pradhan%20Mantri%20Awas%20Yojana%20%E2%80%93%20Urban,launched%20on%2025th%20June%202015
Accessed 18 December 21
, https://pmjay.gov.in/
Accessed 18 December 21

^[23] Ibid 24

^[24] Ibid 4

^[25]
https://www.statista.com/statistics/263771/gross-domestic-product-gdp-in-india/
Accessed 28 November 21

^[26]
https://tradingeconomics.com/india/gdp-growth
Accessed 25 November 21

^[27]
https://www.macrotrends.net/countries/IND/india/gdp-per-capita
Accessed 27 November 21

^[28]
https://www.worldbank.org/en/news/press-release/2015/07/01/poverty-continued-to-decline-falling-from-274-percent-in-2012-to-216-percent-in-2014
Accessed 28 Decmber 21

^[29]
https://www.findeasy.in/indian-states-by-literacy-rate/
Accessed 15 November 21

^[30]
FDI Reforms https://www.business-standard.com/article/economy-policy/nsso-data-reveal-literacy-rate-up-from-64-5-to-691115070100016_1.html#:~:text=The%20literacy%20rate%20in%20India,Sample%20Survey%20Office%20(NSSO)
Accessed 3 December 21

^[31] Ibid 24

^[32]
https://theprint.in/india/governance/despite-lockdown-national-highway-construction-hits-all-time-high-of-36-4-km-day-in-2020-21/632648/#:~:text=Between%202014%2D15%20and%202021,a%2050%20per%20cent%20jump
Accessed 2 December 21

^[33] Ibid 34

^[34] Ibid 34

^[35]
https://www.imf.org/en/News/Articles/2021/11/02/na111121-indias-economy-to-rebound-as-pandemic-prompts-reforms
Accessed 28 November 21

^[36]
https://growjo.com/home/12
The Fastest Growing Companies in 2021(Accessed 24 December 21)

^[37] India’s Growth Champions 2020 ranks nation’s fastest growing companies
https://economictimes.indiatimes.com/industry/miscellaneous/indias-growth-champions-2020-ranks-indias-fastest-growing-companies/articleshow/73734995.cms?from=mdr
Accessed 24 December 21

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