Published in Salute magazine at
https://saluteindia.org/nine-trends-shaping-india/
India is witnessing
transformations at an unprecedented speed and scale. The transformations are
across all spheres of activity, impacting the socio-economic and political
fabric of this country. There is clearly a move towards improving livability, making
it easier to do business and improving the economy. From a governance
perspective, the role of the people are evolving from being a mere voter,
tax-payer and a general bystander on majority of the issues to an active
participant and influencer on majority of policy issues. There has been a
renewed focus on global issues such as environment and sustainability , thereby
bringing about strong measures to comply with global best practices. There have
been visible audacious plans proposed and implemented by the government which
have helped address the pressing issues plaguing the country’s development. The
nature of the economy has also evolved from being a highly monsoon dependent economy to being
virtually drought proof, that has helped provide the policy headspace to the
government to drive growth & development. Recent initiatives launched by
the government have led to a phenomenon of Competitive
Federalization thereby promoting country-wide development.
The enablement through wide scale technology adoption
(growing usage of drones, wireless technology etc.) and innovative processes
has led to improved efficiency and greater success. The growth in opportunities
and urbanization in India has led to a large population being attracted to move
to India. India is now being perceived as a land of opportunities and the
destination of the future.
It is also leading to friction being created among the old
and the young, the traditional versus the forward looking, the Haves and the
Have-Nots. Below are the nine trends that we see are shaping India.
1
Changing Demographics – the most youthful nation
India accounts for nearly 17% of the
world’s population
and is experiencing rapid demographic changes, with wide implications not only
for the country but also across other regions of the world.
The key
demographic trend is the increasing youthfulness of the country. Roughly 50% of
the population is less than 24 years old. The implications of this demographic
structure has started playing out on the key trends in this country. Cable TV
was introduced in the country around 25 years ago. Internet came about 20 years
ago. So we have a large part of the population that has grown up with
significantly higher exposure to information and global trends. Hence their
higher levels of aspirations are driving the direction in which this country is
going.
This youthful
population is technologically more skilled, socially more aware, politically
more involved and economically more aspirational. Many of them are what is
popularly called the “Digital Natives”. This enables a greater penetration of
technology, leading to a Digital Pervasiveness in the country. Their economic
aspirations are leading to rapid urbanization and also the trend of large
number of start-ups and entrepreneurship flowering.
India’s working
age population is expected to balloon up, making India the largest contributor
to the global working population. This would also makes India an even larger
market.
It will also provide
a global workforce that is “Made in India”.
2
People participation
Increasingly we are observing a greater participation
of the people in issues of policy making, governance and change. The advent of social media and interactive mediums has given
rise to increasing velocity of citizens’ interactions with policy makers on
various issues. Again, the trend is being primarily driven by a more aware and
politically active youthful population. Correspondingly, public administration
is increasingly looking to place the citizen at the centre of policymakers’
considerations. Citizens are increasingly questioning the leaders they elect to
the national, state and local levels on a wide range of issues which range from
affordable housing to international relations.
The RTI Act has been considerably
utilized as a tool by citizens groups to influence and shape government functioning
over the last decade. The inflow of information through this medium has
empowered citizens to ask questions on various aspects of policies and
programmes, especially with regards to accountability and governance. A recent
study found India’s RTI Act to be an effective mechanism for the poor to access
ration cards provided under the country’s food subsidy program, the Public
Distribution System (PDS) (Peisakhin and Pinto 2010).
The government has also undertaken very
large initiatives to introduce e-governance at the national, state and local
levels for information dissemination and feedback. With the increase in internet
and mobile connections, the voice of citizens are being increasingly amplified
in wide ranging ways. Citizens’ expectations and demand for information and
services online from governments is increasing gradually so as to improve their
civic, professional and personal lives.
We have also seen people movements
in the form of candle-light vigils and participation in new forms of political
movements which has not only pressurized the government machinery to act on
certain issues, but also has created new political forces. In tandem with a
more pervasive television access and access to social media tools such as
Twitter, people movement is both feeding into and feeding off a more realtime
news transmission and opinion creation. It has forced the government machinery
at Centre, State and local levels to take action on matters that would have
traditionally been swept under the carpet, out of public memory and
considerations. This is also helping break the stranglehold of a few powerful
influencers on the government machinery, increasing accountability into all
arms of the government – the executive, the legislative and the judiciary. This
is one single most transformative trend that will continue to have considerable
influence on how India transforms.
3
Urbanization
The economic aspirations, coupled with squeezing
out of excess labour from agriculture, is leading to rapid urbanization of
India. The urbanization is being fuelled by both, mass migration from rural
areas to urban areas and rural habitations evolving into semi-urban and urban
habitations.
According to World Bank estimates, an
unprecedented 50% of the Indian population would be residing in urban areas by
2041. Natural growth continues to be the
significant element (approx. 40 million) of urban population growth during the
period 2001 to 2011, as compared to net rural – urban migration (approx. 22
million).
A report by IIHS in 2011 estimates that the top
100 largest cities produce 43% of the country’s GDP, with 16% of the population
and just 0.24% of the land area. Apart, from
serious challenges related to habitat, transport and other facilities, it has
also generated high expectations, especially among educated youth. India’s
urbanization is thus playing a significant role in social transformation and
economic mobility.
Urbanization in India has necessitated a phenomenal demand for land,
thereby resulting in the formation of urban agglomerations. Managing population
densities within Indian cities is a significant challenge in accommodating
urban expansion, as is financing urban expansion and city renewal – thereby
calling for innovative urban planning frameworks and regulations.
The trend of urbanization is expected to kick off larger consumption of
steel, cement and other commodities and manufactured goods. It would also lead
to more efficient cities, thus leading to larger consumption of services. It
would thus feed into the economic aspirations of a burgeoning youthful
population.
The government has also stepped in to support the urbanization trend,
after relative apathy for much of the first 65 years of this country. Programs
of Smart City, AMRUT, Swachh Bharat and Housing for All are expected to
significantly contribute to the urbanization trend in this country.
4
Pervasive Digitization
Over the past two decades, there has been an
exponential proliferation of digital technologies in the country. There are
over 276 million mobile phone internet users in India as compared to 48 million
users in 2012.The number of Internet users in India grew at an even more rapid
rate, from 150 million in 2012 to almost 350 million in 2015, listing India on
the 3rd rank globally. Again, it seems to be that a digitally more adaptable
youthful population is driving the higher digital penetration in the country.
All information, things and spaces are getting
digitized. We notice that not only is legacy information being digitized but
also that new information is generated and consumed in a digital form.
Governments are moving towards a regime where no paper certificates are
required. Certificates will be digitally created and hosted.
Things are getting connected to the internet.
From meters, to vehicles to pollution sensors, to shoes, glasses, watches,
pacemakers, embedded medical devices – every thing is getting digitized and
connected to the Internet under the framework of Internet of Things (IOT). And
hence every thing can be remotely monitored and managed, increasing the levels
of automation to unprecedented levels.
Spaces are getting connected. From homes and
offices to public spaces getting free wifi and 4G connectivity. Even spaces such as cars and public transportation
are getting connected, and things, spaces and information are freely
communicating with each other in an all pervasive digital fabric. With
technologies such as 3D printing creeping in, even products are getting
digitized, with the designs being sent over to homes to be printed and created,
and hence if someone is short of a cup for a dinner party, all that the person
has to do is print it out without stepping out from home.
This is transforming how we work, interact,
transact and live.
5
Job creators Vs Job seekers
The economic aspirations of the youth are driving
a larger number of startups being conceived, than ever before. They are moving
away from the traditional aspiration of a comfortable job to high risk, high
pay off world of startups. The youthful energies of the startups are
transforming the business ecosystems and having a deep impact on our lives.
Many of the startups are supported by digital
technologies and are hence in the domain of e-commerce and m-commerce. This
startup ecosystem is being made possible due to the fact that a more youthful
population is digitally enabled. It is interesting to note that more than 70
percent of the entrepreneurs are less than 35 years of age.
With nearly three to four startups emerging every
day, India ranks third in the world in terms of the number of startups. It has
been estimated that the in the year 2015, the number of startups grew at a rate
as high as 40%. This increase in the number of startups has, in turn, led to a
sharp increase in the number of employment opportunities within India.
However, there is a large number of startups that
are not necessarily in the domain of e-commerce and m-commerce, but are
definitely contributing to larger job creation in the country. These are
services and manufacturing companies that are emboldened by the series of
business process reforms being introduced by the central and state governments,
which is making it easier to do business in India.
Clearly, the movement away from being job seekers
towards being job creators, is one of the most significant trends in the
country.
6
The conscious citizen - Environmentally
sensitive responsible consumption
The
combined pressures of population growth, economic growth and climate change is
placing increased stress on essential natural resources in India and globally.
These issues have made people sensitive towards sustainable resource management.
There is a movement towards adopting policies and practices that help reduce
unnecessary consumption, reversing a trend of unfettered consumption as a mark
of development. Slowly but surely, people are moving towards environmentally
sensitive, responsible consumption. The awareness of the majority youthful
population of India to the issues of climate destruction, is pushing the
political and social thought process and policy making.
The trend
is clearly demonstrated by the people support received by the odd-even cars
scheme by Government of Delhi, for reducing the air pollution impact by
vehicles. Even at greater personal discomfort, people moved onto public
transportation and car-pooling.
This is in
lock-step with the global trend that has being brewing for more than a decade,
fuelled by the youth, who have now come to occupy places of decision making.
Indian
government is getting the political space, supported by this more-aware population, to boldly put
forth its Intended Nationally Determined Contribution (INDC) to the United
Nations Framework Convention on Climate Change (UNFCCC). India has committed to
reduce the emissions intensity of GDP by 33-35 per cent by 2030 from the 2005
level, achieve about 40 per cent cumulative electric power installed capacity
from non-fossil fuel based energy resources with a target of 175 GW by 2022 and
creating an additional carbon sink of 2.5 to 3 billion tonnes of CO2 equivalent
through additional forest and tree cover by 2030.
India is
furiously adopting solar energy, in one of the most ambitious plans globally.
Other renewable sources are also being tapped into, with cities trying to adopt
more environmentally friendly transportation systems. With these ambitious yet
achievable renewable energy, energy efficiency and emission reduction targets
India is leading and walking the talk on the movement towards a more
resourceful India and the planet.
7
Interconnectedness with the rest of the globe
With
almost 40% of the GDP linked to global trade, India has rapidly become interconnected
with the global economy. The interconnectedness is not just economic, but also
in terms of culture, skills, technology, medicine, policy making, language and
in almost all domains of life. The process that was kicked off over a hundred
years ago, with India’s participation in World War I, where modern ideas and
concepts started flowing into India at a much more rapid pace, has snowballed,
and India is set to come back to global centre stage, by not only being
influenced by global trends, but also by influencing the global trends.
As the
veterans of World War I came back to India, they carried their thoughts and
outlooks back into the society, transforming the society. In a similar process,
in pursuit of economic objectives, we are observing large movements of people
from rural India (and urban India), to other countries and their interactions
with the society back in their villages, is fundamentally altering age-old
traditions, some even leading to aggravated class and caste frictions.
India’s
cultural industry – movies, music, art etc – is also having deep impact
globally. New words, forms of dance, forms of music, cinematography etc are
evolving globally, with significant influence from India.
Similarly,
Indian movies, music, art, theatre, lingua franca, are all getting deeply
impacted by the global trends.
Economically,
we see a continued increase in the levels of international trade and capital
flows for India. We are observing that the voracious appetite of capital by
India, is beginning to have noticeable influence on global capital flows.
This can
have both positive and negative impacts for the economy. India’s merchandise
trade as a percentage of GDP is currently hovering around 40%
which can substantially impact the economy.
Though with the dropping oil prices the import bills are reducing and
helping India maintain the targeted current account deficit as well as fiscal
deficit of 3.9% of the GDP and overall inflation, however with the reduced
global demand due to slowdown of Europe and China, there has been drop in
exports as well. However as the trend toward increased economic
interconnectedness is expected to continue, Government of India is ensuring that they
have the right policy frameworks in place to capture the benefits of trade and
manage the risk through ongoing and upcoming fiscal policies like
increase FDI limits in insurance, railways, defense, encouraging privatization
of loss making public sector companies.
These
policies are also helping in trade liberalization, economic reforms and freer
movement of capital and technology from the developed world to India and is
helping India becoming increasingly important player in international finance,
being one of the most sort after destination for investment for global
investors.
8
Transformational National Initiatives
The Government has taken up a
slew of initiatives that have been audacious in scale and transformational in
nature. These initiatives have shaped the governance within the country. These
initiatives are driven by the aspirations of the youthful population –
aspirations for better living conditions and pursuit of happiness. Unless India
is able to rapidly develop and transform, it could possibly stare at an
implosion driven by the disgruntled youth. And hence the urgent need for the
large national initiatives.
Government programs address the wide range of
issues in a structured manner. A set of programs is aimed to provide the safety
net to the vulnerable sections of the society as the nation goes through the
upheavals that will emerge from such rapid transformation. These programs include
financial inclusion, targeted subsidy delivery etc. another set of programs are
focused on creating a vibrant economy that will lead to the wealth creation
necessary for fueling the transformation and to meet the aspirations of the
burgeoning youth. This includes programs such as improving Ease of Doing
Business in India, enabling the Startup ecosystem, Make in India, large scale
infrastructure development etc. A third set of programs focus on providing a
better life to its people through initiatives such as housing for all, toilets
for all etc.
The scale at which the initiatives are been
implemented has been audacious and transformational. For instance, a record
setting 200 million bank accounts have been opened within the country under
Pradhan Mantri Jan Dhan Yojana. In
addition to being audacious in scale, the implementation methodology has been
innovative. Under improving Ease of Doing Business initiative and Smart City
initiative, the country witnessed the phenomenon of Competitive Federalism. This innovative mechanism to have Centre
and States work in alignment, is being extended to many other programs. Furthermore,
more than 30,000-40,000 citizens are giving up LPG subsidy every day for
contributing to nation building. This demonstrates that the cynicism in the
society is giving way to youthful morality and exuberance. Such unprecedented
response from the citizens is reshaping governance within the country into a
more participatory governance. It has led to the emergence of a new trend which
would significantly influence the country’s future.
9
Asymmetric Warfare
For a long time,
India has been at the receiving end of asymmetric warfare, in the form of
terrorism. A much smaller amount of effort (in the form of crafting and running
terror infrastructure) from adversaries was tying down a disproportionate
amount of Indian defence assets and forces. However, we witness new dimensions
of asymmetric warfare emerging in the country.
The country is
facing asymmetric warfare in the form of fake currencies being pumped in
(economic warfare), cyberattacks, large scale migrations (which may be
unintended but is exposing the country to demographic challenges), water
diversion from key river systems and social warfare enabled through technology
(MMS being circulated leading to social disturbances). The ability to withstand
such attacks is not limited to the abilities of the military forces but require
a larger capacity building within the financial institutions, diplomatic
institutions an common people (possibly through curriculum change to enable
them to withstand cyberattacks, such as phising, and social attacks such as the
one that was witnessed in Bangalore that targeted North Easterners), and
corporates.
The trend of
asymmetric warfare is only going to be amplified and emanate in several more
dimensions.
By Dr Jaijit Bhattacharya, partner, KPMG