It is perhaps fitting that we are starting 2025, which marks the end of the first quarter of the 21st century, with serious introspection, triggered by the passing of former prime minister (PM) Manmohan Singh in India and President Jimmy Carter in the United States, at the age of 91 and 100, respectively.
There is an uncanny similarity between the two leaders. Both were known for their innate decency and honesty and their departure has led to a wave of nostalgia about the decline in politics, public service and public discourse after their time. But let us stick to India for the moment.
Amid the immediate eulogies about Dr Singh’s long years of public service, no one wanted to point out that his second term as the PM had ended in policy paralysis as he presided over, what was then considered, a highly corrupt coalition government, with all partners of the United Progressive Alliance (UPA) seemingly bent on enriching themselves at the country's cost. The allegations weren’t untrue. A huge chunk of bad loans written off by banks on account of infrastructure and realty companies after 2014 stemmed from dubious lending and ever-greening in that period. Both sectors also took advantage of the pump-priming and liquidity infusion that was needed in the wake of the global financial crisis of 2008, but continued far too long, leading to high inflation in 2011. Scores of the high-profile companies of those days have, since, collapsed, leaving banks, home-owners and sub-contractors to bear the brunt.
But all that is forgotten in the wave of nostalgia that harks back to 1990-91, when India was forced to open up and liberalise its economy to avoid bankruptcy. It has been correctly argued that the then PM, PV Narasimha Rao provided Dr Singh, his finance minister, the political cover to carry out structural changes. However, opposition to economic liberalisation came from three powerful groups that had a lot to lose—communist parties, old-school industrialists of the Bombay Club, and a cabal of Bombay-based stockbrokers. Only a person with Dr Singh’s background, erudition and high ethical standards could have pulled it off amid a massive securities scam and a controversial power policy virtually dictated by Enron Inc.
As we begin 2025, the nostalgia for leaders like Dr Singh refocuses attention on issues that truly matter. The orchestrated drumbeat about reform, development and a ‘Viksit Bharat’ often masks the challenges that are holding India back. For instance, India’s economic growth slowed to 5.4% in the July-September quarter, a two-year low. According to media reports, the finance ministry attributes this to the Reserve Bank of India’s (RBI’s) tight monetary policy. This performance, coupled with a weak rupee, has drawn unfavourable comparisons with the UPA-2 era.
Businessmen Speak Up
A responsive government is one that listens to feedback and growing frustration over quality of life and corruption -- especially coming from someone who is otherwise a vocal government supporter, like TV Mohandas Pai, formerly of Infosys Ltd. Last week, he tagged the PM and various ministers in an X post which said, “India needs urgent reforms to improve quality of life in her cities and towns, high corruption, bad infra hurting citizens. Budget 25-26 should provide huge funding for our cities.”
Leading banker and industry stalwart Uday Kotak, once a go-to person for the National Democratic Alliance (NDA), has also made 10 bold suggestions for ‘India at 77’ in an X post. First on his list is to ‘go for growth’ – a clear reference to the economic slowdown and high unemployment. The list itself seems a plea to give India’s 1.4bn (billion) people and its entrepreneurs a chance to ‘flower and grow’ by getting ‘enterprise and the animal spirits firing’. In order to achieve this, he wants the government to: eliminate current account deficit, continue steady fiscal consolidation, shun protectionism, respect free and fair markets, avoid over-regulation and micro-management across sectors.
Another blunt suggestion is to ‘walk the talk’ on pollution. This is a telling comment on the ‘Swachh Bharat Abhiyan’, led and launched by the PM in October 2014, with the aim of ‘achieving the vision of clean India by 2019’. Mr Kotak is perhaps the first high-profile businessmen to publicly acknowledge the embarrassment of India having the ‘most polluted cities in the world’.
In 2025, the government will no longer be able to use its media cell to silence citizens who want clarity and consistency in policy, reduced bureaucratic red tape, greater accountability to create a conducive environment for growth and quality of life, in terms of civic amenities, poor roads, public transport, adequate healthcare, or a good education system. As more Indians travel abroad and witness the low cost and high quality of infrastructure, especially across Asian countries that were once as poor as us, the debate about higher taxes not translating into tangible improvements is bound to intensify in 2025.
It will also focus attention on India’s pathetic failure to exploit the outstanding tourism potential of Incredible India that could drive economic growth and create jobs. While countries across Asia and Europe are working on policies to attract Indian tourists, Indian tourist destinations, such as Goa, are suffering from a decline in tourist arrivals due to high costs, poor infrastructure as well as hygiene and safety issues.
Middle Class Concerns
A chorus of complaints is rising among the middle class that higher taxes are not leading to any tangible improvements for citizens. This is likely to be amplified in this year, with a greater demand to reduce the tax burdens on essentials; improve basic amenities like roads, sanitation, water-supply, healthcare, education and public services; make government officials more accountable; and crackdown on corruption.
On the financial front, middle class and affluent investors who surged to the capital market after the COVID pandemic of 2020 may face a new concern. After a relentless rally of five years and a huge revival of initial public offerings (IPOs) the market has turned tumultuous. The bulk of retail investors in today’s market have never witnessed a market decline, depend on the government to ensure a stable economic environment with strict enforcement and oversight to prevent corporate malpractices.
In the circumstances, the government’s unwillingness to examine allegations of conflict of interest against Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (SEBI), has cast a shadow over the regulatory process and the independence of the market regulator. It has also enhanced the recurring concern over favouritism and how government policies have disproportionately benefited the Adani group. Both these concerns will spill over into 2025 and continue to make media headlines.
As India steps into 2025, it stands at a crossroads. The aspirations of its 1.4bn people are clear: economic growth that is inclusive and equitable, governance that is transparent and accountable, and infrastructure that matches global standards. Nostalgia for past leadership serves as a reminder of the values of decency, honesty and vision that should guide the nation’s future. Whether the government can rise to meet these expectations remains to be seen, but the demand for change is unmistakable.
Comments
but allegation of insider trading after so many ye
1 week ago
it is quite peculiar thing it seemed to me, poverty for generation as well as insecurity is so deeply embedded into the character of this race that we can not see anything beyond our present interest,every chance is there when we can not see beyond near term goal we will be entangled into middle income trap freebie and electoral interest is the prime thing and education and health is in backyard, i think political leaders and industrialists are not belong to separate species, we will have to pay price for it.
All very true. However, it is facile to invest any hope in the so called middle class because this class has been denatured systematically. This segment of the citizenry is too preoccupied with aspirational living to bother with larger issues. Our polity, economy and society are on the brink of a precipice, not at crossroads. It is painful to have to accept that things are likely to get worse before they get better.
Excellent article describing the ills and what needs to be done but does not say who should do it.
Yes, Indian citizens should but which ones, the rich, the poor or those in the middle?
The rich have it good so will not do much besides some pious platitudes.
The poor are just trying to survive so cannot take on this additional burden.
We need middle class people like the duo, Smita and Ram, founders of Rang De, rangde.in, who saw a desperate need for small, low interest loans in the villages and small towns of India and set up this organization (regulated by RBI) to incentivize Peer to Peer lending. A person can loan as little as Rs 100 to a villager, and then when it is paid back with interest, either withdraw it or re-loan it to another so keep the money going to people involved in micro and small enterprises.
This middle class couple saw a need and are trying to serve it.
Middle class needs to set up organizations to tackle public hygiene, monitor traffic violations, and many more such problems.
Sucheta and Debashish are doing it, at great personal risk, for finance. We cannot expect them to do this for other areas too.
The article reads well and has brought out how India is at crossroads . The middle class is the backbone of the economy and they cannot be ignored if economy really needs a boost and kickstart. Unless and until Consumption picks up, which is dependent upon income levels , low cost of living and tolerable level of inflation , the expected growth of the economy cannot happen is what experience and wisdom indicate. The ensuing budget can definitely make a break through though the exercise is a bit painful.
Demand for change has been well managed by the Elites since 1947 with the help and to the benefit of the West. Remittances by Slaves will be the mainstay.
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This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
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Yes, Indian citizens should but which ones, the rich, the poor or those in the middle?
The rich have it good so will not do much besides some pious platitudes.
The poor are just trying to survive so cannot take on this additional burden.
We need middle class people like the duo, Smita and Ram, founders of Rang De, rangde.in, who saw a desperate need for small, low interest loans in the villages and small towns of India and set up this organization (regulated by RBI) to incentivize Peer to Peer lending. A person can loan as little as Rs 100 to a villager, and then when it is paid back with interest, either withdraw it or re-loan it to another so keep the money going to people involved in micro and small enterprises.
This middle class couple saw a need and are trying to serve it.
Middle class needs to set up organizations to tackle public hygiene, monitor traffic violations, and many more such problems.
Sucheta and Debashish are doing it, at great personal risk, for finance. We cannot expect them to do this for other areas too.