As India prepares for national elections in a few weeks, the key political issues are crony capitalism, falling economic growth, rising unemployment, lack of basic facilities and poor governance. And that is the good news.

Identity politics has won elections at the national level, but growth and governance issues have not. One ruling coalition lost an election in 2004 despite a campaign that focused on its development achievements. The loss was more because of political alignments, but parties misread it as a vote against development.

The return of growth and governance to the centre of political debate is sorely needed. India was targeting annual GDP rate of 10% in 2009. This year, it will barely touch 5%. With a disruptive election year, 2014-2015 is unlikely to be better.

The resulting distress in the industry and the disgust among voters has driven national political parties to focus on the growth agenda. A key objective for the new government will be to stem domestic industrial production, which has turned negative. More than reviving business sentiment, improved industrial activity will be critical for creating employment.

Any domestic company that still has the energy and impulse to expand is looking beyond India. At the World Economic Forum Annual Meeting in Davos this year, many Indian industry leaders I met were planning global investment at the cost of domestic growth. The next government that takes charge of New Delhi in May this year will have to tackle this problem as a priority.

Poor governance and a lack of transparency have taken a severe toll on India’s growth momentum. Poor governance began from the Parliament. The current term of the lower house, Lok Sabha, has been assessed as the poorest based on performance parameters. Lok Sabha functioned for only 60% of its time compared to previous terms where it worked at above 80% levels.

The ruling coalition and opposition parties remained deadlocked throughout the five-year term while more than 70 changes in legislation could not be approved. Administrative lethargy has led to slow decision-making at executive level. Scores of critical infrastructure projects await clearances affecting billions of dollars of investment. Opaque government processes that allowed questionable allocation of natural resources led to charges of corruption, further adding to inertia in decision-making.

Creating transparent procurement and allocation rules will have to be another key priority for the new government. Established political parties are being accused by newer, younger parties of nurturing crony capitalism. Such accusations have eroded civil society’s trust in industry. Transparency in policy-making will be essential to bridge this divide.

In the last two years alone, half a million young Indians joined the ranks of the unemployed. Joblessness is higher among youth than the national average. Rising job worry has led to a shrinking consumer base and fall in demand.

As political parties jostle for power to run the largest market-based democracy, they will have to ensure that the aspirations of 285 million young Indians are met. These millions will not be satisfied with empty rhetoric. They will forcibly demand growth and governance political parties. Whoever is committed to these is likely to win the elections.

Author: Pranjal Sharma is a consulting editor at Businessworld in India and a Member of the World Economic Forum’s Global Agenda Council on India. Follow on Twitter @pranjalsharma

Image: A girl peeps out of an emergency window of a passenger train at a station in the western Indian city of Ahmedabad REUTERS/Amit Dave