India’s growth story: democracy, development, demand, and decisiveness

India enjoys a huge demographic dividend supporting its economic rise

India’s multi-faceted progress and growth, particularly over the last decade, has been truly remarkable setting it in a highly promising position to achieve its aspirational goal of ‘Viksit Bharat’ (Developed India) by 2047 when it celebrates the centenary of its independence.

In 2014, Prime Minister Narendra Modi spearheaded the victory of the Bharatiya Janata Party (BJP) to win an absolute majority in the Parliamentary elections, the first time that a single party had won outright majority on its own since the last 30 years. He repeated the feat with an even larger majority in the elections in 2019. In 2024, when the whole world witnessed a wave of anti-incumbency, PM Modi again rode back to victory convincingly for the third consecutive term with the support of BJP’s alliance partners. Following the Parliamentary elections, BJP and its partners decisively won elections to state legislatures in major states like Maharashtra and Haryana thereby emphatically demonstrating its irrefutable support amongst the common people. Democracy has been India’s undeniable strength and leitmotif since independence which has stood it in great stead to achieve a peaceful, stable, secure and better life for its people.

Economic expansion and rise

The last decade has also witnessed impressive growth in India’s economic expansion and rise. In 2014, India was the 10th largest economy in the world. Today it has climbed five places to become the fifth largest economy in the world. In another two years it is expected to move up to the third place by displacing Germany and Japan from their positions. India is today the fastest growing major economy in the world its GDP having risen by 8.2% and 6.4% in Financial Years 2022 and 2023 respectively. The projected figure for FY 2024 is 6.6%. It is expected to grow at impressive rates in the coming years and become a $ 5 trillion economy by 2030. Managing Director of the International Monetary Fund has stated that India is the ray of hope in an otherwise gloomy global economic environment. 

Nearly 70% of India’s GDP is driven by domestic demand and private consumption. Its GDP is additionally fuelled by government spending, investments and exports. This has been achieved through various structural reforms like the implementation of the Goods and Services Tax (GST) regime. The GST streamlined the indirect tax system, fostering business ease and tax compliance. Additionally, emphasis on digitalisation (including the Digital Public Infrastructure) and innovation led to the rise of startups and expanded the digital economy, with initiatives like Digital India enhancing technology access. Initiatives such as Make in India and Product Linked Incentive Scheme have been pivotal in driving growth. Furthermore, the focus on renewable energy underscores India’s commitment to sustainable development.

Huge demographic dividend

India enjoys a huge demographic dividend supporting its economic rise. About 65% of its population is below the age of 35 years with just about 5% being above 65 years. The median age is around 28 years which is much lower than the median age of other major economies like the United States and China. While the whole world is ageing and greying, India looks forward to its young population adding to its consumption and production and spurring its economic growth to new heights. India is home to more than 600 million people aged between 18 and 35 years. India’s demographic dividend is expected to persist at least until 2055–56 and will peak around 2041, when the share of the working-age population — 20–59 years — is expected to hit 59%. It is an opportunity which India is fully determined to harness. 

India’s ambitions to become a global manufacturing hub and a technology leader are closely linked to the upskilling of its workers. Progress is already underway, as nearly 10 million youth are benefitting from the Skill India program annually. Getting more women to enter the workforce is pivotal for India’s future growth. India is working assiduously to achieve this objective.

Foreign relations

In the arena of foreign relations, India has pursued a bold, pro-active and confident policy. 

In its ties with the United States, it has ‘overcome the hesitations of history’ and is fostering a ‘Partnership of Trust.’ US is India’s largest trading partner in goods and services, and the second largest supplier of sophisticated defence equipment. India and the US engage in around 60 substantive Dialogue Mechanisms spanning all conceivable areas of human endeavour including technology, cyber-security, energy, health, education, security, etc.

India has maintained its time-tested and substantial ties with Russia by importing significant quantities of Russian oil, and not directly criticising or condemning it for its attack against Ukraine.

India has stood steadfast against the aggressive and expansionist policies of China. It has followed a policy of ‘Neighborhood First’ and strategic patience, and extended non-reciprocal, generous support to its neighbouring countries in times of need and for their economic development. Its Outreach to the Global South, particularly by supplying more than 300 million COVID-19 vaccines, most of them gratis, to above 100 countries, has exemplified its role as a ‘Vishwa Bandhu’ (Friend to the World). 

India’s robust economic growth and assertive pursuit of its interests and foreign policy over the last decade has enhanced its global prestige and imbued its people with hope and confidence in attaining its goal of becoming a peaceful, prosperous and developed country by the time it marks 100 years of its independence in 1947.

(The writer has worked for the Indian Foreign Service for over three decades. He was the Ambassador of India to Kazakhstan, Sweden and Latvia, and has worked in diplomatic positions in Washington DC, Brussels, Dhaka and Bangkok, among other nations.)