The future of Indian economy: Should it play the power game or values game?

Source– The post is based on the article “The future of Indian economy: Should it play the power game or values game?” published in the Business Standard on 26th November 2022.

Syllabus: GS3- Indian economy

Relevance: Economic policy

News- The article explains the dilemmas faced by Indian policymakers while deciding the right policies for economic growth.

What are the questions faced by Indian policymakers?

Effects on India’s attractiveness when the latest draft of  “personal data protection” Bill gives unchecked  powers to the state to frame rules according to its whim?

Impacts on a country’s reputation as a business destination when domestic courts are used to stymie international arbitration awards?

growing presence of business oligarchs tied to the establishment ruling out a level playing field.

Arbitrary action by state, like keeping people in jail for years together without bringing cases against them to court?

How are these questions being dismissed in today’s world?

China has achieved decades of rapid growth and development as a one-party state. It is not providing freedom to citizens. Businesses are also not treated equally.

Middle powers are increasingly disregarding the values of a liberal democracy as being a European construct. They prefer nationalism and cultural-identity politics.

Globalisation is yielding to inward-looking policies in countries that were advocates of open markets.

What needs to be done by Indian policymakers?

India has to settle the question of government-business relationship and state-citizen equation. It must ask why thousands of wealthy Indians are emigrating in ever larger numbers to places that include Singapore and Dubai. What do they find missing in India?

India must face up to one fact. It is not China. The dynamism and size of China’s domestic market, combined with its unique advantages as a production base, made it impossible for investors to stay away.

In comparison, India has competitors who present themselves as investment alternatives. India has a long way to go. It needs to play nice more than China did.

India must decide what kind of country it wants to be. It want to be admired for its soft power and market, or an arbitrary state that can do what it wills with both individuals and businesses.