India needs a total system reset

They’re calling it a “TsuNaMo”. More than a victory for the Bhartiya Janata Party (BJP), they’re calling it a victory for Narendra Modi. And Modi himself is calling it a victory for India. Whatever we call it, India has voted against the incumbents, and the desire for change could not be greater.

In his first hundred days, however, the BJP leader will be under pressure to demonstrate that he can leverage his electoral mandate and deliver a realistic programme for growth over the next five years.

Just a fortnight before the election results were announced, the World Economic Forum’s Global Agenda Council on India organized a workshop in New Delhi, bringing together a group of experts from a range of sectors to identify the top challenges and priorities, both short and long term, for post-election India.

The verdict of this group was that India needs a total system reset. India has recently suffered from a loss of economic competitiveness, high inflation, declining growth, a tarnished image due to corruption scandals and an indecisive government. According to the experts, key areas needing a complete overhaul are governance, infrastructure, employment and innovation.

Governance touches on everything in India. The need of the hour is a mission-based governance model: an ethical and fair use of power with built-in accountability. We hope that the new government demonstrates assertive leadership from the get-go, rooting out corruption while reaffirming the strength of democratic institutions.

India’s decaying infrastructure needs urgent attention. Crumbling roads and an unreliable electricity supply affect citizens and businesses alike. A resilient infrastructure is needed to support the strong entrepreneurial environment that is required to boost economic growth and job creation.

In a country where a huge informal economy employs perhaps 90% of workers, official unemployment figures can paint a very misleading picture. What is certain, though, is that India faces a crisis of skills, and the question is not of unemployment but of unemployability. A job revolution will require a complete shake-up of the education system and the employment sector. Schools and colleges need to be integrated with strong and effective apprenticeship programmes. By prioritizing vocational education and providing tracks to improve quality in trades (e.g. plumbers, electricians), the workforce will be better suited to match the jobs that are needed. Of course, even a skilled, employable workforce is of no use if a lack of proper healthcare, sanitation and even basic nutrition incapacitates workers before they even clock in.

If India is to realistically create jobs for young people aged 15-34 – who, at around 400 million people, make up one-third of the population – we need a large, competitive manufacturing sector. In his election manifesto, Modi put a clear emphasis on strengthening India’s manufacturing capabilities and giving impetus to industry. To sustain the euphoria around his promise that the “good days are here” the government will need to attract more foreign investment while nurturing domestic innovation.

In the past, innovation was largely about cheaper solutions and frugal thinking. India must now reimagine its growth story by moving up the value chain. Modi has led BJP to the first single majority win in 30 years – something not seen in India since Rajiv Gandhi achieved the same strong win in 1984. It will be crucial to see what the 63-year-old prime minister, who won with large support from India’s younger generation, especially the urban youth, can do for India’s innovation agenda.

Above all, according to our group of experts, what India needs from the new Modi-led government is a plan for growth that is genuinely inclusive. He is promoted by the majority but the strength of his governance will be determined by how he takes along the minority and upholds constitutionally enshrined secular democratic values. The first hundred days of the Modi government will be critical and the world will watch his every move. This election marked many shifts: the first majority mandate for a centre-right party and a complete rejection of a model based on hand-outs for the poor. Everyone is rooting for change, but the goals should be forward looking and sustainable. Our Indian constituents’ hope is that the new government is not just decisive, but also secular, democratic, fair and progressive.

Authors: Akanksha Khatri, Senior Manager, India and South Asia; Global Leadership Fellow, World Economic Forum. Shubhra Saxena Kabra, Knowledge Manager, Global Agenda Councils, World Economic Forum.

Image: Commuters during the morning rush hour at Churchgate railway station in Mumbai. REUTERS/Navesh Chitrakar