India's GDP growth has been struggling and 5% is the new benchmark these days. Policy paralysis, corruption, red tapism and ineffective monetary policies are a few reasons for the same. While the India growth story may not be over as yet, many things have to be done in the right manner in order to revive the economy. Else we may well head for stagflation.
The first issue concerns governance. And good governance comes from intent. However, the intent of Indian political parties is to somehow remain in power and not work for the betterment of the people. This has led to dirty politics and ineffective governance. Nonetheless, the mood of the Indian electorates is changing. This is evident from the state assembly elections in Delhi. A relatively novice party, Aam Aadmi Party, has changed the face of Indian politics. Riding on the wave of honesty and governance it uprooted the incumbent government in its own bastion. This suggests that people are fed up with corruption and ineffective leaders. They need better governance and are ready to effect the change themselves. While the process is slow it is slowly gaining momentum.
The second issue, over which India's future growth will be dependent, is reforms. However, dubbing populist measures as reforms can be a grave mistake. Food security bill is not a reform. In fact, it is a populist measure which is likely to exert pressure on government finances. While the intent of the bill is noble, which is to feed the poor, the timing and insufficient planning over its funding gives us an impression that it is more of a tool to win vote banks. Reforms basically change the economy. For instance, a direct tax code bill could be deemed as a reform. So, can the goods and service tax bill. However, failure to arrive at a consensus over these issues is hurting us the most.
Last but not the least is the common will of political parties to effect the change. India is a country with many regional parties. Hence, coalition politics is integral to it. And in coalition politics every party has its own agenda. Thus, there are multiple interests represented by multiple parties. For some reservations is a priority, while some try to divide people on communal grounds. Caste based politics is the biggest social evil in India. Unless these parties eliminate dirty politics and arrive at one common platform, which is clean governance, India's future may continue to appear gloomy.
This is because the future of any nation is dependent upon its government. It is the government which is responsible for drafting policies and implementing it. If the governing body itself is corrupt, no matter how good the demographics are, India's growth will continue to suffer.