India’s economy - the path to realising grand aspirations

India is a fast changing country and a rising global power.  Yet while its overall prospects look bright, questions remain as to whether the country’s vast economic potential will be realised to full potential.

As it faces the road ahead, attention focuses on one man: its Prime Minister, Narendra Modi. A controversial figure in his own country and abroad, he has garnered unprecedented political support while facing criticism for his nationalism, his record in government and his economic policies.

What might this mean for Australian businesses looking to engage more with this important market and what opportunities offer particular promise?

These questions were explored during a recent business forum in Melbourne with acclaimed journalist and author of Superfast Primetime Ultimate Nation, Adam Roberts .

Roberts explains that while India may aspire to be internationally recognised as a ‘superfast’ and ‘ultimate’ nation, the reality is that an Indian superfast train “plods along at 50 miles an hour”.

As India seeks to revitalise its economy, lift more citizens out of poverty and balance complex relations with neighbouring China and Pakistan, the key to understanding its future lies in understanding its leader.

Since coming to power in 2014, Modi and his senior leadership have represented “a decisive break from previous decades”, with plans to reshape India’s economy, and quickly step-up India’s role on the international stage.

Modi’s somewhat controversial demonitisation policy and introduction of the GST has met a cautious and mixed response from business. But his support from the lower to middle classes remains strong, with no serious competitors amongst his senior leadership team.

With demonetization, Modi claims to have addressed all three malaises troubling the Indian economy—a parallel economy, counterfeit currency and financing of terror.

However, the benefits of economic growth and rising prosperity have not been even. States such as Gujarat, Maharashtra and Tamil Nadu, along with other southern states are prospering, while large parts of the north remain underdeveloped.

Nevertheless, India will get richer and lift more people out of poverty, even if it cannot quite sustain the long-term high rate of growth, let alone the high levels of job creation, that China managed in the late twentieth century and beyond.

Roberts suggests that India is set to continue its rise as a significant global player over the next decade, with Modi likely to remain at helm over this period.

Based on insights from “India’s economy – the path to realising grand aspirations,” held in Melbourne on 12 September, in partnership with La Trobe Asia and KPMG.