India 2015: Towards Economic Transformation

April 16, 2015

India is in the midst of a historical triple transition. Its economic transition is affected by, and in turn, drives the social and political transitions that are unfolding simultaneously. India’s diverse and pluralistic society makes this a hugely complex development. The challenge facing India is to generate 12 million jobs every year and in addition wean millions who are currently trapped in low-productivity agricultural and informal sector employment. This has to be sustained over the next two to three decades. Therefore, the country must achieve high rates of economic growth and create conditions to attract investment from domestic and foreign investors. If successful, India will emerge as the third largest economy in the world by 2047, when it will celebrate the centenary of independence from colonial rule. Given the exploding aspirations of its young population, the socio-political consequences of another episode of aborted economic transition could be catastrophic. The stakes are very high. In this paper we assess the likely impact of the political changes of 2014 on economic policy-making and prospects for India. The focus is on prime minister Narendra Modi’s performance so far and the way forward.