As India takes over the presidency of the UN Security Council for the month of August and Indian strategists and policy makers trumpet this event, it is time to take a deeper look at the challenges facing this 64-year old democracy.
If we look at the political arena we see that the two largest parties seem to be stuck in limbo: Congress struck by corruption scandals and lack of desire on part of current leadership to reform the party from within, BJP still torn between whether it is an ideological movement-cum-party or a political party with an ideology. BJP too is struck with corruption and so while it's been happy to criticize the government, it also doesn't want to rock the boat too much because it is not ready to face the electorate with a new agenda.
Half of India's population is under the age of 20 and this generation is searching for new leadership. However, it is faced with a died-in-the-wool pre-Partition leadership which doesn't believe it needs to change much in any sphere.
In the economic sphere, two decades ago it was a Congress-led government in which then-Finance Minister Manmohan Singh undertook vast economic changes which resulted in the unshackling of the License Raj economy. The Indian government has often stated that it hopes to use the growing economy to help reduce poverty and spend more money on the social sector. However, in order to do that, the economy has to grow as close to 10 percent as possible. For that, however, India needs to undertake a second phase of reforms.
There is a need to improve food storage and delivery systems which would help ensure that the food and goods stored in warehouses can be used to reduce inflation. While it is great that India's service sector is growing at such a fast pace, economies need a robust manufacturing sector in order to sustain long-term growth. Further, in a high population country like India, industry needs to be encouraged to move from being capital-intensive to labor-intensive. Hence, changes in labor laws and land acquisition laws need to be undertaken so as to provide the needed incentives. Infrastructure is a key component of the growth of any country and while India has made massive strides in the last decade, there is a lot more that needs to be done.
