Aayushi Ketkar: How do you see the progress India has made in the last decade under the leadership of Prime Minister Narendra Modi?
Jayant Sinha : In the last decade, India has transitioned from being a weak country, unsure of its future, to becoming a very strong rising superpower, confidently advancing towards the vision of Viksit Bharat. This transformation is truly incredible.
Aayushi Ketkar: There has always been this interplay between economics and politics. Perhaps, the economic part is even more crucial because we are a young nation, and we talk of the demographic dividend. Considering this demographic dividend, how do you view initiatives such as Atmanirbhar Bharat, Make in India, and the strong startup ecosystem, as being game-changers?
Jayant Sinha: A lot of us draw inspiration from Kautilya’s magnum opus, the Arthasastra, in which Kautilya emphasises that the foundation of a strong state lies in its economic prowess. That is precisely what Prime Minister Narendra Modi has accomplished over the last decade. When we came into power in 2014, India was counted among the fragile five economies, grappling with unstable macroeconomic indicators, raising doubts about sustained growth. Now, we are among the top five economies in the world and on track to being the top three. This transformation from being a fragile five country to moving towards the top three is indeed extraordinary and is the bedrock for the strength that India possesses today. The esteem and reputation that have come India’s way are due to this extraordinary economic transformation.
As you pointed out, given our youthful demographics, ensuring meaningful employment opportunities is paramount. But let me emphasise just five things that have been accomplished over the last decade at a very high level, with respect to our economy. Firstly, we have achieved macroeconomic stability. In 2013, we had a mini balance of payments crisis. The rupee plunged by 14-15%, and there was a real concern about whether India could manage its macroeconomic situation. But over the last 10 years, despite facing various shocks like the COVID-19 pandemic and disruptions in global supply chains due to events like the Ukraine conflict, India has maintained robust growth, with a GDP growth rate of 7-8%, inflation at 4%, and a current account deficit below one percent. Today, investments are rising, every macroeconomic parameter is extremely robust, and the world is looking up to India with great hopes and expectations. Maintaining macroeconomic stability, has been a major accomplishment of our government.
Secondly, we have transformed the social security system. Providing free food grains to 800 million people and delivering financial aid directly to bank accounts with minimal leakage showcases the effectiveness of our social welfare initiatives. Thirdly, substantial progress has been made in infrastructure development. The construction of 50,000 to 60,000 km of national highways and landmark projects like the Atal Setu bridge connecting Navi Mumbai with Mumbai, the construction of ports and airports, etc., exemplify this achievement. Fourthly, the rollout of the goods and services tax (GST), has formalised the Indian economy, leading to lower tax rates and increased tax collection efficiency. At present, indirect tax collection as a percent of GDP has gone up by two percentage points, which is huge. The fifth success story is the thriving startup ecosystem and the emergence of over 115 unicorns, signifying a renaissance in India’s entrepreneurial landscape, and offering hope for the future. So, in my view, these are the five major accomplishments that have propelled India from fragility to emerging as a top three economy on the world stage.
Aayushi Ketkar: That brings me to the next question, which is the role of youth and women in India’s growth story. How do you see this playing out?
Jayant Sinha: Today, the global landscape is characterised by deglobalisation, decarbonisation, and digitisation, all of which pose significant challenges to job creation. With global supply chains fracturing, it is more difficult now to plug into the global export economy. China had accomplished this earlier, during the globalisation phase, as a result of which it now accounts for 30-40% of the world’s manufacturing. That is harder to do when supply chains are breaking down. Today, the stress on decarbonisation, digitisation and artificial intelligence, makes it harder for us to create jobs. Despite these hurdles, India has excelled at generating employment opportunities, particularly for its youth.
The robust growth in formal employment, as evidenced by the EPFO data, which indicates that about 2-3 million high-quality jobs are created every year, reflects this trend. Furthermore, integrating more women into the formal workforce holds immense potential for driving sustained economic growth. While currently, 20-30% of women participate in the workforce, predominantly in informal sectors like agriculture, formalising their participation will fuel growth for decades to come. We have favourable demographics. With a focus on education and skilling, India is well-positioned to harness this potential. We have done extremely well so far, and I am hopeful that we will be able to manage it equally well going forward.
Aayushi Ketkar: The unorganised sector poses a significant challenge to India’s growth trajectory. How do you propose bringing it into the organised sector? You rightly said that efforts are being made in this direction, but this is a time-consuming task, and we do not want to miss out on India’s growth story.
Jayant Sinha: For an economy to grow, people have to become more productive. That is, for the same inputs, because of the higher skills and improved capabilities of people, there will be increased productivity. This is difficult to achieve in the informal sector because it requires the use of equipment and tools as well as improved skills. This, in turn, would require an infusion of capital, equipment, and skills. So, that is the transformation and the transition that we now have to undertake. The good news is that the Indian economy is gradually becoming more formalised, as indicated by the increase in the number of taxpayers from 98 lakh people before GST to 140 lakh post GST implementation. This is an indication that the formalisation of the work force is moving along very quickly.
We have about 6 crore MSMEs. As the Chair of the Standing Committee on Finance, I have closely monitored the MSME sector. Through the UDYAM portal, we have registered about three and a half crore MSMEs, all of whom now have bank accounts, a PAN number, and a GSTN, and thus they are getting formalised. They have access to credit, and their productivity is increasing. Because we are a very large economy, this transformation is gradual, but the momentum has swung towards that end, and we are steadily progressing towards it.
Aayushi Ketkar: Do you observe a shift from women’s empowerment to women-led development? Are we giving impetus to women in the startup ecosystem as we now see a surge of women entrepreneurs and women in key political roles? Many women of Indian origin have done exceedingly well abroad, like Indra Nooyi. This brings me to another question. How do you see the role of the Indian diaspora adding to India’s economic growth, especially through FDIs and investments?
Jayant Sinha: You have correctly identified two extraordinary reservoirs of strength that we have in India. One of course is our women, which, as of now, comprise just about 20-30% of the workforce. Recently, parliament passed the Nari Shakti Adhiniyam to reserve a third of our seats in our elected assemblies for women. This is aimed at bringing women into the mainstream and making them feel that they are not only leading but are also defining India’s destiny and are absolutely empowered to do so. This is being done through different mechanisms. Increasingly, as we formalise the economy, we are giving women the tools, the equipment, and the access to credit to make them entrepreneurs and leaders. So, this will certainly happen.
India’s diaspora, as per some estimates, numbers about 30 to 40 million people and is an extraordinary source of strength for India. Their purchasing power equals the purchasing power of India as a whole. So, it’s an extraordinary economic capability that we possess in terms of money, technology, and knowledge sharing that comes into India through the diaspora. Our outreach to the diaspora has been proactive, and because of the infrastructure that we have built and the quality of our cities, it makes little difference if one is working from New York, London, or Paris, or from New Delhi, Mumbai, or Bengaluru. In addition, initiatives like the privatisation of Air India facilitate easier access for them and foster stronger global ties. Direct flights from major Indian cities to global hubs not only benefit the diaspora but also bolster economic and cultural exchanges, positioning India as an integral part of the global community.
Aayushi Ketkar: Earlier, there used to be a debate between defence and development, the classic “guns versus butter” scenario. However, now we are emphatically pursuing both defence and development concurrently. This approach is bringing about a new India, a stronger India. With our enhanced defence preparedness and modernisation efforts, including the recent strides in defence exports, do you see this bolstering our soft power? Previously, India was renowned for its adherence to rules and other positive soft power attributes. Do you envision this advancement in hard power contributing to how the emerging Bharat or the new Bharat is perceived globally?
Jayant Sinha: I started by quoting Kautilya’s Arthashastra, which states that a strong economy is essential for strong national security. We have demonstrated this. Not only are we strengthening our defence forces, but we are also investing in new technologies such as drones. Because we have economic strength, we can invest in advanced technologies. As our economy grows, so does the amount invested in defence, which further increases our strength. This is not soft power, but hard power. What we follow is what President Wilson said, which is to speak softly but carry a big stick. We exhibited this in our stance on the Ukraine war, where Prime Minister Modi clearly stated that this is not an era for war. India’s voice is now heard because we can project our hard power very clearly across the world.
There are two more points I wish to emphasise. The first is that we are also enhancing our defence production capabilities through the creation of two defence corridors, one in Uttar Pradesh and the other in Tamil Nadu. Secondly, we are investing in advanced technologies. Through the Innovation Agency, our startups are being enabled to acquire advanced technologies in different fields, such as missile and space technology, drones, advanced munitions, aerospace, artificial intelligence, and cybersecurity. In all of these advanced areas, because we are building up our capabilities, we are able to project a lot more hard power.
Aayushi Ketkar: How do you perceive the “Modi factor” in the upcoming election, where we witness the “Modi guarantee”? How has the exceptional leadership of Prime Minister Modi, both domestically and globally, hastened the recognition of the new India by the world at large? How do you envisage the role of visionary leadership, including that of the younger generation in politics, in shaping this new India?
Jayant Sinha: The best way to think about the extraordinary contribution that the honourable Prime Minister’s leadership has made is to use the Hindi phrase ‘Yug Purush’. The Prime Minister is a once-in-a century figure. He is defining not just India’s growth and development but is also completely repositioning India on the global stage. His contributions have been extraordinary across multiple domains, which will be long remembered. After centuries, we finally have a chance to position India as a global superpower, and we have a leader like Shri Narendra Modi to take us through this transformation.
Often, there is a debate among historians, whether history is shaped by forces or by individuals—the great forces theory versus the great leader theory. I think, perhaps, both are required. In the case of Prime Minister Modi, it is very clear that great leaders are really, in some ways, able to harness these great forces and turn them to the advantage of the country. This is what we see happening in front of our eyes.
Aayushi Ketkar: Shifting to our final question, what challenges do you foresee for this emerging Bharat, and where do you believe our focus should lie? While sectors like finance, economy, and infrastructure have received considerable attention, areas such as education and health seem to demand more focus. From an academic standpoint, I perceive education as a critical game-changer, alongside the crucial role of the health sector. Could you shed light on the areas you believe require our attention to sustain the momentum of our progress? Additionally, with the advent of Modi 3.0, what trajectory do you anticipate for India?
Jayant Sinha: As I see it, the first five years (2014-2019), were about strengthening and stabilising India. The subsequent five years, under Modi 2.0, have been about resilience—dealing with challenges like COVID and conflicts while ensuring economic resilience. Looking ahead to Modi 3.0, the next five years will really be about global leadership and India’s emergence in the top three economies globally. We will be able to project both hard and soft power and will be a prime destination for leading global companies.
I am reminded of Prime Minister Harold Macmillan of the United Kingdom, who, when asked what he worried about, famously said, “Events, dear boy, events.” If you ask me what I worry about, it is not internal challenges, as we have a prime minister who can take extraordinary and courageous decisions and has the will to implement them. So our internal challenges will be appropriately addressed. But it is external events that we need to be concerned about, such as the COVID pandemic and the Ukraine war, which can destabilise our economy. So, it is the global macro-shocks that we have to watch out for and manage. The good news is that the honourable Prime Minister and his senior colleagues have been able to manage all such external shocks, and achieve resilience and stability despite them. Therefore, while we are equipped to manage internal issues effectively, we must remain vigilant and proactive in addressing external challenges.
Aayushi Ketkar: Thank you immensely for your insights. Your perspective on the past decade and India’s future trajectory has been invaluable.
Brief Bios:
Shri Jayant Sinha is Member of Parliament, Lok Sabha
Aayushi Ketkar is Assistant Professor, Jawaharlal Nehru University, New Delhi.
