Opinion

India 2019 general elections: The critical overs of the power play begin

Mahesh Singhi Mahesh Singhi - 7th February 2019
The fact is these elections are not just “make or break” in the hyperbolic, headline-grabbing sense. I believe they are so critical that when historians in the later part of this century look at India, they will look to the polls in 2019 and 2024, either approvingly or with regret.

In Shanghai, when you ask a Chinese investor or business executive why they are so bullish on India, the most common response that underlies their conviction is its rapidly growing young population.
They cheerfully compare how infrastructure wise, India is where China was in the late 1990s or early 2000s -- at the cusp of a dramatic improvement in the living standards of the people and a significant upgrade in their purchasing habits. They rightly point out, that since India did not impose the one-child policy like China, the length of the demographic dividend will be much longer in India’s case (51 years), as compared to China’s case (17-18 years)

In India’s context, it is interesting to quantify how enormous those challenges are, notwithstanding the longer tailwinds of favourable demography it will enjoy, relative to China. Demography is not destiny, especially for countries with large populations. To bring back the cricketing analogy, demographic dividend is a sort of power play -- a younger population makes it easier for you to hit higher growth targets. But the problem is that the total that India is chasing is so daunting, that it requires close to 10 runs an over to close the chase.

Balancing growth and employment imperatives

The experience of other Asian success stories in countries like Korea, Taiwan, China, and Singapore shows that a sure-shot way to balance both growth and employment imperatives is to wean people off agriculture in more productive occupations such as manufacturing, construction and services.

However, so far, the record of all governments in creating non-farm jobs in India has been abysmal. Census data from 2011 shows that just six regions in the country – comprising less than 30 districts out of 640 in the country - have more than half of their population working in non-farm occupations. The reason why job creation is the lens through which the future will look at the general elections in 2019 is that all the other visible social conflicts today are the manifestations of this problem. Rising population, climate change and fragmentation of land parcels have made agriculture a risky enterprise for the small farmer.

However, gainful employment opportunities are available to the landed peasants only as unappealing, contract-based non-farm labour jobs. This has led to agitations for caste-based reservations in government jobs, protests for waiving off loans and the accompanying response of the state governments to run large fiscal deficits by providing freebies and kicking the can down the road. Long-term underemployment also impacts psychology, undermining the people’s faith in social institutions and pushing them towards more radical solutions and crime.

What India decides to do in May is important not just for the country, but for the world.

If one sixth of humanity decides to vote for inclusive growth within a democratic set-up, the coming two decades will see global poverty decline and new markets open up for economies across the world, much as China emerged from being the world’s biggest factory in the 1990s to the world’s preferred market in the current decade. Indian youth of today, who comprise more than half of the electorate, have a choice at hand -- 40 years from now, what kind of country they would like to breathe their last in.


Mahesh Singhi
Managing Director - Partner,
Singhi Advisors Pvt. Ltd.


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India 2019 general elections: The critical overs of the power play begin

More than 800 million Indians will vote in the 2019 general elections. What India decides to do then is important not just for the country, but for the world. If one-sixth of humanity decides to vote for inclusive growth within a democratic set-up, the coming two decades will see global poverty decline and new markets open up for economies across the world.…

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