The Dawn of India's Age1
Dr. Basanta Kumar Pradhan, Director, Indira Gandhi Institute of
Development Research or IGIDR, Prof Subrata Sarkar, Convenor of the
Conference Committee, Faculty Members of IGIDR, Distinguished Alumni
of the Institute, Ladies and Gentlemen, Namaskar and Good Afternoon!
I am deeply honoured to be invited to inaugurate the IGIDR Alumni
Conference which, perhaps for the first time, brings together former
students, current students and faculty under the mantle of the alma mater.
Some of you are well on your way in charting life's journey in diverse fields;
others prepare to commence their own tryst with the future. It is truly
heartening to observe how loyally you have all responded to the IGIDR's
maternal call - after all, as the Oxford Dictionary of Word Origins puts it,
an alumnus is one who is nourished.
The cornerstone of building a great nation is the nurturing of its human
capital. The IGIDR has groomed some of the brightest and most driven
scholars in the country. Their professional successes intrinsically define
the institution. Alumni are receivers and also givers. In the words of Albert
Einstein, "It is every man's obligation to put back into the world at least the
equivalent of what he takes out of it." While you reflect on your journey
through these arches, do ponder on how you could enrich the journey of
others that follow in your footsteps. I see you as rays of light illuminating
the terrain you traverse while also reflecting the incandescence of the sun
- your alma mater. The rich diversity of your accomplishments is our
asset, worthy of emulation, with externalities to reap by those who join you
today.
Taking a cue from an inspiring description of the key to success in life2,
there is a tide in the affairs of nations which, taken at the flood, leads on
to fortune. India is poised on the crest of a tide in its history that will take
it to its full potential in securing its aspirational goals for the future of its
citizens and in its role in global affairs, albeit amidst several challenges. It
is in that context and spirit that I thought I will spend some time envisioning
the dawn of India's age.
Demographics
According to the United Nations3, India has become the most populous
country in the world this year, attesting to the flowering of the demographic
dividend that set in from 2018. There is a paradigm shift in our thinking on
the subject. Once considered a drag on development in the tradition of
Thomas Malthus4, our large population is now regarded as an asset and
an opportunity in a world in which many countries are confronting aging
and even population decline. By contrast, our population is young - the
median age is 28 years. Every sixth working age (15-64 years) person in
the world is an Indian. The potential for boosting saving and investment
that this entails considerably enhances India's emergence as the world's
economic powerhouse of the future. In fact, this momentous development
has been termed as 'shifting the world's centre of gravity'5 because it
could be heralding a tectonic change in India's role in the global order.
Moreover, India's population is expected to keep growing for the next four
decades, peaking at under 1.7 billion in 2063. More than a sixth of the
increase of the world's working age population between now and 2050 will
be provided by India.
Already, India is the fifth largest economy of the world in terms of market
exchange rates and the third largest in terms of purchasing power parity
(PPP). The Organisation for Economic Cooperation and Development
(OECD) has calculated that in PPP terms, India will be the second largest
economy of the world by 2048.
We must prepare for donning this responsibility. In some ways we have
begun. India is upgrading physical infrastructure - roads and airports being
the most visible dimensions - to world class levels. We are on the cusp of
a digital payments revolution. Yet, our most formidable challenges remain:
only half of the existing working age population is part of the labour force.
Furthermore, India's female labour force participation is among the lowest
in the world, even lower than that of low income countries. Also, India's
labour productivity (GDP per hours worked) is lower than even peers in
the lower middle income group of countries into which we are classified.
Consequently, 16 per cent of the population lives in poverty, according to
the UN. We have to change all that by creating jobs commensurate with
expansion of the working age population, by skilling up the work force and
providing it an institutional environment that enables work flexibility in tune
with changing technologies and demand patterns. Importantly, we must
enable greater female participation in the workforce by assuring the
dignity of work and the sanctity of the workplace. Our population presents
an exciting opportunity which can be realised only if we are successful in
providing it with economic opportunity.
Diaspora
An outward reflection of India's demographic bonus is the vibrant
expansion of Indian communities across the world. India has always been
an open economy and international migration has been a major force
defining India's economic, social and political relations with the rest of the
world right from the Bronze Age in 3000 BC.
In its 2022 publication of its migrant database, the UN estimates that at
18 million6, the Indian diaspora is the largest in the world, accounting for
6.4 per cent of the total stock of international migrants (281 million) in
2020. This migration has been distributed across the world, with major
destinations currently being the UAE, followed by the US. It is interesting
to note too that the demographic dividend is also being seized by internal
migration.
Over the years, our perceptions about the diaspora have also transformed
from 'brain drain' to 'brain gain', spurred by the contributions that Indians
have made in various fields in the global arena, including information
technology, entrepreneurship, international politics, medicine, arts and
culture, with some of them becoming Nobel laureates. It is estimated that
over 90 out of 1078 founders of about 500 unicorns in the US are persons
of Indian origin7. According to a recent study8, professionals in the areas
of science, technology, engineering, and mathematics (STEM) play an
important role in the U.S. economy by providing cutting-edge ideas and
technologies that create jobs and raise living standards. Immigrants from
India are the largest country of birth group, accounting for 28.9 percent of
all foreign-born STEM workers.
The Indian economy has been a beneficiary of this dynamic and
industrious diaspora. India currently receives the highest flow of
remittances in the world at US $ 108 billion in 2022, up by 24.6 per cent
from a year ago, and accounting for 3 per cent of India's GDP.
Additionally, Indians residing abroad hold deposits in Indian banks
cumulating to US $ 136 billion at the end of February 2023.
Going forward, labour market transformation driven by technological
breakthroughs, energy transition and geoeconomics will blur the
distinctions between working abroad and working in India. The
demographic advantage may well equip India to reap the maximum
benefits of this shift. The World Economic Forum's Future of Jobs Report,
2023 points to a global churn in labour markets - creation of 69 million
jobs and a decline of 83 million jobs - led by supply chains and
transportation, media, entertainment and sports industries. The churn in
India's labour markets will be driven by technology-led sectors like artificial
intelligence and machine learning (AI&ML), followed by data analysts and
scientists. Employers in India remain among the most upbeat in terms of
future talent availability, with respondents believing that the existing
workforce can be upskilled to pack the pipeline and talent can be retained.
A larger proportion of respondents in the Indian set are inclined to
consider improving talent progression and promotion process as well as
providing effective reskilling and upskilling as business practices that
could improve access to talent than in the global set. As a priority,
therefore, India needs to get its skilling strategy right.
Diversification
The Indian economy is undergoing a quiet but fundamental transformation
encompassing all its sectors. Perhaps the most striking transformation is
occurring in India's exports of services which have demonstrated
pandemic-proofing, rising by above 25 per cent per annum since 2020,
and providing valuable support to the viability of the external sector. While
software and business services are the main drivers of this robust
performance, advances in IT have not only made services more tradable
but also increasingly unbundled: a single service activity in the global
supply chain can now be fragmented and undertaken separately at
different geographical locations. Jurisdictions have accordingly been
decentralising and diversifying their supply chains to ensure business
continuity. These factors have led to a new channel of IT-enabled services
- large multinational corporations (MNCs) are setting up Global Capability
Centres (GCCs), which are offshore offices, delivering a wide array of
services across IT sector verticals.
India is home to about 40 per cent of global GCCs, and they are estimated
to comprise 25 per cent of overall IT services exports. GCCs are also
driving diversification, with firms in diverse sectors such as electronics,
retail, automotive, banking and financial services, and hospitality, to name
a few, setting up GCCs in India. GCC services include accounting, legal
services, business consultancy, operations, capacity development and
research. GCCs cater to high-value and knowledge-intensive projects
such as data analytics, artificial intelligence/machine learning, chip
design, system design, robotics and other new-age technology solutions
that are high in demand in the global tech market. India is also becoming
a hub for engineering R&D (ER&D) centers as leading multinationals
develop their centers of excellence (CoEs) across different business
domains. The National Association of Software and Service Companies
(NASSCOM) estimates that India will add 500 GCCs by 2026. They are
going to be hiring. India's citizens of the future should prepare for this
revolution. The world is coming to our doorstep to fill world-class jobs.
Digital Revolution
India is playing a pivotal role in the ongoing fifth technological wave - the
information and communication revolution9. We have emerged as the
largest player in real-time payment transactions globally, with a share
close to 50 per cent. The Unified Payment Interface (UPI) is the mainstay
of the retail payment ecosystem, with around 9 billion transactions in April
2023 alone and this is attracting global attention. The India Stack creates
a unified software platform to bring our population into the digital age.
India Stack is the largest open application programming interface (API) in
the world. It is being implemented in stages, starting with the introduction
of the Aadhaar Universal ID numbers; the introduction of electronic Know
Your Customer (eKYC) which enables paperless and rapid verification of
identity details; e-Sign whereby users attach a legally valid electronic
signature to a document; UPI enabling cashless payments; and most
recently, DigiLocker, a platform for issuance and verification of documents
and certificates. The benefits of India Stack are being widely exploited by
rising mobile penetration. It is argued that India Stack could fast-track the
move to digital payment systems worldwide and mark the end of cash10.
Digitalisation is also powering a revolution in the cross-border payments
space. India is linking UPI with other national fast payment systems (FPS).
The UPI has been linked with Singapore's PayNow in a move that is
expected to make cost-effective cross-border peer-to-peer (P2P)
transfers using mobile apps, and deepen trade, travel, and remittance
flows between the two nations. Other link-ups are on the anvil. Within
India, too, increasing interoperability across domestic payment modes is
being prioritised. India is also gearing up for the launch of the digital rupee.
Internationalisation of home-grown payment modes is being enabled
through tie-ups with payment service providers that allow QR code-based
merchant payments in Bhutan and Singapore. Leveraging the growing
popularity of the UPI, this payment facility has been extended to inbound
travellers from the G20 nations for effecting local merchant transactions.
Looking ahead, the future of digitalisation is bright, with total digital
payments poised to jump three-fold to USD 10 trillion by 2026, wherein 2
out of 3 transactions will be through non-cash modes. The future of cross-
border payments will be characterised by the setting up of dedicated
payment rails for instantaneous transfers, while also ensuring digital and
financial inclusion and greater harmonisation of payment regulations
across borders.
Diplomacy
India's G20 Presidency is a watershed moment in our history as we seek
a central role in finding pragmatic global solutions for collective well-being
and promoting a sustainable and inclusive future for all. G20 brings
together the world's largest economies on one platform for collective
action, coordination and consensus building in our vision of Vasudhaiva
Kutumbakam - One Earth - One Family - One Future.
India is prioritising a reformed multilateralism that creates a more
accountable, inclusive, just, equitable and representative multipolar
international system for the 21st century. Our priorities include addressing
the macroeconomic implications of food and energy insecurity; climate
change; strengthening Multilateral Development Banks (MBDs); debt
sustainability; strengthening financial resilience through sustainable
capital flows; financing inclusive, equitable and sustainable growth;
leveraging digital public infrastructure; climate financing; and
opportunities and risks from technological change.
On the finance track, we aim to expand the narrative beyond financial
stability and financial integrity concerns to capture the cross-sectoral and
macro-financial implications and risks. We are working towards
strengthening financial institutions' ability to manage third-party risks and
outsourcing, inter alia, arising from BigTech and FinTech, and also
enhancing global cooperation to strengthen the financial sector's cyber
resilience.
Going forward, the world's hopes are on building consensus to deliver a
G20 Delhi Declaration that will leave an Indian footprint on the sands of
time as we strive for 'human-centric globalisation' that is sensitive to the
voices of the Global South.
Dynamic Federalism
Increasingly, the quality of life and the business environment in India is
going to be defined by shifts in the focus of public policy that foster
competitive federalism among India's states in achieving the aspirational
goals of sustainable economic development. The freedom to compete
allows each state to design, experiment, innovate and reform, given its
unique features and challenges, while emulating best practices achieved
by peers. An example of the power of competitive federalism is the drive
among states to attract private investment, both domestic as well as
foreign, by showcasing investment opportunities in each state. The spirit
of competitiveness is being promoted at the highest policy levels. Well-
performing states in the area of business reforms are recognised as Top
Achievers. Similarly, Niti Aayog has developed the Export Preparedness
Index to evaluate sub-national export performance11.
Moving on, the states' start-up ranking scheme has encouraged each of
them to have dedicated start-up policies. Many States have also
undertaken substantive legislative and administrative reforms in their
labour and industrial relations to boost domestic manufacturing
capacity. Today, many states have instituted processes such as single-
window clearance, self-certification of compliance by enterprises, online
filing for registration and returns and transparent inspection systems. The
Smart Cities Mission promotes sustainable and inclusive cities12. The
Ministry of Housing and Urban Affairs has launched the 'City Finance
Rankings 2022' portal in March 2023 whereby urban local bodies in the
country will be evaluated on the basis of 15 indicators,13 based on current
financial health and improvement in financial performance over time. The
sustainable development goals (SDG) India Index14 developed by the
11
The framework consists of four main dimensions: Policy, Business Ecosystem, Export Ecosystem
and Export Performance. All the vital parameters, namely Export Promotion Policy, Institutional
Framework, Business Environment, Infrastructure, Transport Connectivity, Access to finance, Export
Infrastructure, Trade Support, Research and Development Infrastructure, Growth Orientation and
Export Diversification have been covered as sub pillars under the four main dimensions of the index.
Gujarat, Maharashtra and Karnataka have highest overall export preparedness score.
12A competition-based method is used as a means for selecting cities for funding which is based on
area-based development. Cities obtaining the highest marks in a round were then chosen to be part of
the mission. 20 smart cities were selected in Round one, 27 Smart Cities were selected in Round two,
30 Smart Cities have been selected in Round three and 9 Smart Cities have been selected in Round
four from a period of 2016 to 2018.
13
The three parameters are Resource Mobilization, Expenditure Performance and Fiscal Governance.
The rankings will be based on the four population categories- above 4 million, between 1-4 million, 100K
to 1 million and less than 100,000. The final rankings are expected to be announced in July 2023.
14
The SDG India Index is the world's first government-led sub-national measure of SDG progress. The
SDG India Index computes goal-wise scores on the 16 SDGs for each State and UTs. Overall State
and UT scores are generated from goal-wise scores to measure aggregate performance of the
subnational unit based on its performance across the 16 SDGs. This Index was launched in December
2018. For the year 2020-21, Kerala came first on the index whereas Tamil Nadu and Himachal Pradesh
shared the second place.
NITI Aayog, in collaboration with United Nations, is also fostering
competition among states and UTs by ranking them on global
developmental goals.
As our states compete for a place in the sun, they will nurture business
growth, put in place the best physical and social infrastructure and provide
us with improved basic amenities, clean energy, and better health and
societal outcomes. Along with foreign investment bringing in new
technologies and ideas, we are moving into a national ethos of wider
consumer choices and a better standard of living.
Decarbonisation
Climate change is manifesting itself at an alarming scale and pace
globally. Extreme weather events are becoming more frequent and
intense, inflicting increasing damage on human lives and the environment,
globally and in India. The intensifying concern now is that climate change
is heavily influenced by human activity. In fact, the period from the mid-
20th century has been defined as the "Anthropocene" epoch, marking a
significant impact on earth's climate due to the increased use of fossil
fuels.
India and other developing economies are highly vulnerable to climate
change due to their limited capabilities in climate science and technology
and insufficient funding for adaptation and mitigation. The relative costs of
transitioning to a greener path are higher for them than for the advanced
economies; undertaking the transition can even push them several places
down the development ladder. From the developing world, India has
emerged as a leading voice on global climate action that is mindful of
climate equity and justice considerations.
India has taken numerous policy initiatives in this direction. In 2015, India
submitted its Nationally Determined Commitments (NDCs) to the United
Nations Framework Convention on Climate Change (UNFCCC) with
targets up to 2030. At COP26 in 202115, India updated its NDCs, which
now represent the framework for its transition to cleaner energy for the
period from 2021 to 2030. It has committed to the five-fold strategy of
panchamrit, which include raising its non-fossil-fuels-based energy
capacity to 500 GW by 2030; raising 50 per cent of its energy
requirements from renewable sources; and reducing the carbon intensity
of its GDP by 45 per cent by 2030. India aims to achieve the net zero
target by 2070. For achieving this target, it has released long-term low
emission development strategies (LT-LEDS) at the COP27 summit.
India has co-founded the International Solar Alliance (ISA) with France in
2016 and announced a National Hydrogen Mission to increase the
dependency on green energy. The Mission LiFE, i.e., Lifestyle for the
Environment, launched in 2022, is now a global movement to connect the
powers of the people for the protection of the earth.
The RBI too is engaged in managing climate risks. In April 2021, it joined
the Network for Greening the Financial System (NGFS) to benefit from
and contribute to the best practices in climate risk management and green
finance. Apart from including renewables as part of the priority sector
credit for banks, the RBI has recently issued sovereign green bonds, and
released the framework for mobilisation of green deposits. At the frontline
of research on the subject, the RBI has on May 3, 2023 released the
Report on Currency and Finance, 2022-23 with the theme "Towards a
Cleaner Greener India". The Report has examined the macro-financial
implications of climate change and the possible fiscal, monetary,
regulatory and other policy options for India.
In the words of Victor Hugo who is considered to be one of the greatest
French writers of all time, "Nothing else in the world...not all the armies...is
so powerful as an idea whose time has come." India's time has come and
we must seize it. There are formidable trials and challenges ahead, but
they can be overcome if we exploit the comparative advantages. I have
spoken of some of the defining dimensions favouring India's leap into the
future. We need to hone them into the cutting edge that will make this
dream possible.
Concluding Remarks
As you prepare to step out into a fast-changing world, always cherish the
unbreakable bond that you have with your alma mater. In this context,
your homage should first go to your teachers, the faculty of the IGIDR,
who nurtured you with commitment, dedication and sincerity. Our teachers
do not just impart knowledge; they awaken in us the desire to be lifelong
learners. To quote Swami Vivekananda, "the guru is the means of self-
realisation". I commend the entire faculty, present and past, for shaping
the lives of the future of India and for being the soul of the institution that
has groomed them to be worthy citizens of our nation and of the world.
As you embark on your journey, always believe that you are capable of
achieving greatness. Your successful completion of your educational
programme at the IGIDR is the first testimony of that power and passion
in you. Do not be afraid to dream big. Go out into the world with the
knowledge that anything is possible if you are willing to put your shoulder
to the wheel and push. In your journey, you will encounter failure, but
failure is not the opposite of success; it is an opportunity to learn and grow,
and not give up on your dreams. Success is not something that happens
overnight. It is the result of consistent effort, hard work, and dedication.
So, make it a habit to seek excellence in everything you do. In the words
of the famous philosopher and historian Will Durant, "Excellence is not an
act but a habit. The things you do the most are the things you will do best."
The future is in your hands. You have the power to shape your own destiny
and create a life that is meaningful and fulfilling, while making a positive
impact on the world. So, go out there with your head held high, tirelessly
striving towards perfection.
Wherever you are and in whatever you do, I wish you every success.
Thank you.
************