The transformation of India

Oxford University Students’ Union: March 7, 2023

Ladies and Gentlemen,

Thank you for this opportunity to address this group of the smartest young people in the UK—a description that a similar cohort in another University town north of London might contest—about one of the more exciting socio-economic transformations taking place in a subcontinent not too far from you.

I’m talking about the transformation underway in India. And I am here to tell you that this process may well be the most significant change your generation will witness. Indeed, it could be as much of a generation-defining process, just as the transformation and rise of China was when I was your age—and believe me, your faculty and I were also young once, however hard that is to believe today. 

Indeed, it may even be more consequential and significant, because the India story is unique not only because of its scale and complexity, but also because it takes place within the four corners of democratic polity.

Change, they say, is inevitable. But we in India had perhaps begun to accept the idea that transformational change would inevitably take time. This, we were told, was especially so for a nation like India: among the largest in the world, in population terms; certainly the most diverse, in cultural and linguistic terms; and easily the most complex, in socio-economic terms. And yet it is happening today at a speed and scale that can no longer be ignored, and it is underway at a pace that is quite different from the India story of the past.

What should be of interest is not only what is changing and how fast, but the context and the scale at which this change is taking place.

So let me make one bold assertion: in the 75 years of its existence as an independent nation, India is changing faster than at any time in its history, within a framework of an entrenched democracy. Indeed, what is underway is in fact one of the most transformative changes ever to take place in the free world. In its scale, ambition and most of all, its democratic context, what is underway is unique and unparalleled.

Let’s assess this remarkably assertive statement carefully.

Meaningful and positive national transformations take place through social progress, economic growth, and citizen-centric governance. Each of these processes are underway today at scale in India. That’s easy to say, of course, since India has always been the land of big numbers. But what makes the process more remarkable is the base on which change is taking place. What does that mean? Well, quite simply, consider what we had at that midnight moment of freedom in August 1947, when the British left, and after the traumatic partition of the subcontinent.

At the time, India had a population of 340 mn (six times your current population today), but that collection of humanity had:

• A life expectancy of around 30 years, as chronic disease and malnutrition were the norm;

• Literacy rates at around 16%. There were only 17 universities, with around 238,000 students enrolled.

• 90% of the population languished below the poverty line;

• Economic growth was at 1% annually, for  forty-seven years since 1900, while the population was growing at 3.5%. 

• Barely any industry worth the name, hardly any electric power production, at 1352 GWh of power, and hardly any users in rural areas, as a mere 3% of our villages were connected to the grid, and of course, huge food shortages.

But what we did have was a remarkably forward-looking Constitution of our own, drafted and adopted in just over two years of independence, and a vibrant—indeed even noisy—democracy.

And, so let’s assess progress since then. Let’s start with social progress.  

You will learn only occasionally about Indian society and social issues in the western media today: frankly, coverage is spotty, sensationalist and in a sense, of a modern variant of the old Orientalist school. As I have said before, I find it difficult to recognize the India that I live in and interact with on a daily basis from the media here.

But set that aside for a moment and look at what is actually happening. Instead of looking at incidents and episodes—for that is not a relevant metric for assessment of any country, including India. Look at trends.

First: Democracy continues to flourish in India. This is not because it is in the gift of any individual or Party to give or restrict, but simply because it is embedded deeply in the DNA of India. Diversity—linguistic, cultural, religious and even social—makes it inconceivable to any Indian citizen that there could be any other way of governing India.

Take elections, in which we are almost perennially involved. The last election in 2019 had 960 mn registered voters, of which nearly 600 mn cast their franchise in as many as one million polling booths. 

And remember, all of this is done on electronic voting machines that to this day produce accurate and timely results in India. We are not only one of the first countries to deploy such systems, we are also an outlier in the exclusive use of EVMs across the country in all national and provincial elections. Remember, only 10% of nations and territories worldwide graduated to this simple and verifiably accurate technology!

Our election process is today actually the gold standard of global election management. There was less than 0.1% repolling required, that too for reasons related to weather—a Sigma 6x badge of excellence. Frankly, more cricket matches get disrupted in the UK due to rain in what you call “summer” here! Our polls produce not just winners and losers, but better still, acceptance of the results as fair. A cursory examination of polling outcomes in States and the Union over the past nine years since the last general election illustrates that the people have their say.

It might be argued that democracy is not just about elections. That is a fair point. And to that, I emphasise that we have an independent judiciary that has repeatedly exercised its independence not just in its rulings, but also in the most crucial area of all: the power to select judges, which, I remind you, vests in a Collegium set up and run by the judiciary itself. It is not in the remit of any political party to propose judges for any of the Courts. If you permit my being direct, this is not the case in other democracies, where political leadership selects judges.

So too, media. While there is much debate about what ‘free’ media means, the reality is that everything we read that is critical about India today is actually sourced from Indian media or commentators from India.  Put it another way: surely it should be worth a comment that those shouting from the rooftops about the erosion of media freedoms in India are shouting precisely from rooftops in India. And incidentally, the narrative in India’s non-English media is quite different. It may not be flattering to the Government of the day, but it does not necessarily reflect the views of the ruling party or any other.

Moving beyond this, let me touch upon the transformation underway.

First, in democratic terms, the participation rate is increasingly not only young—90 million in the last election were first time voters—but also fully includes religious and ethnic minorities, women and historically disadvantaged groups. Indeed, today the most vocal participants in the debate about the direction of the Indian state are from non-urban, non-elite backgrounds. It is increasingly clear that the voice that emanates out of India today is more authentic than ever before.

Second, in terms of social delivery, India has exponentially ramped up its capacity to deliver services to all citizens. Note here the use of the word “all”. The focus has been on universalizing the delivery of electric power, drinking water, sanitation, primary health care and financial inclusion to all citizens of the country.

In less than ten years, we have succeeded in:

• Ensuring nearly 100% electrification of the entire country, including in villages and remote regions, in 2019;

• Extending piped drinking water to 49% of India’s households (or 81 mn) that never had these ever before in history. Before the drinking water mission was launched in 2019, only 17% of India’s households, or 32 mn, had piped water;

• Bringing basic sanitation to tens of millions of households, thereby especially liberating women from the tyranny of social stigma and facilitating a rapid increase in school enrolment;

• Bringing some 344 mn people into the modern banking system (2019), so that digital technologies can be used more effectively to deliver state support and benefits directly to the hands of the beneficiaries. This is in turn driving up demand and consumption and reducing income inequality. In comparative terms, in 2014, when the Government launched schemes for financial inclusion, the world average of banking accounts for adults was 62%. India was at 53%. Today it is well over 80%.

Finally, on this point: contrary to what you might have heard, youth in India are pretty much the same as youth here or anywhere else in the democratic world. For a country that was deeply conservative and rooted to its traditions, there has been an unprecedented widening of social acceptance of the many diversities of modern society—as indeed as is reflected in India’s strong and vibrant popular culture especially Bollywood. Marriage, love and identity are no longer ossified into specific predestined frameworks. While I readily acknowledge that this is a work that is very much in progress, I do believe that India has changed faster in the past decade on this account alone than at any time in its history.

Ladies and gentlemen:

Coming to governance, let me pose you a question: what is the biggest force transforming Indian society and indeed, the governance of India? In short, it is the power of technology. For the last few decades, India has been a consistent innovator in the process of using the digital domain to expand economic development, facilitate ease of access to market and to information, and create a more equitable society.

In the past eight to ten years, this effort has been turbocharged, as the government of PM Modi has bet big on IT as an agent of disruptive change. And this bet has been successful. Consider the facts: in July 2015, when the current government launched Digital India as a flagship campaign, only 19% of the population of over a billion people was connected to the internet, and a mere 15% had access to mobiles. Per capita data consumption, India was at 122nd spot.

But this programme captured a palpable shift in public imagination of India’s place in the world, especially among youth. There was and is optimism about the direction of the country’s trajectory. Now, as of Jan 2022, India has 658.0 million internet users; the internet penetration rate is 47% today, and India added around 34 million internet users between 2021 and 2022 alone. If that is the average rate of annual increase, today India probably has some 700 mn internet users.

But there’s more. In 2022, India had 1.14 bn mobile phone users, or over 81% of the population, and that number had increased by 34 million over the previous year. And as a side-note to digital natives in the audience:

Median mobile internet connection speed via cellular networks was:14.39 Mbps. And fixed line internet connection speed was: 47.40 mbps. While this is slower on average than that in the UK, the average in India includes wide variation. But most of all, price is a fraction of what it costs your generation to get online in the advanced world.

More seriously, this enormous leap into digital access has given us an unprecedented opportunity to develop tech-based startups and digital goods to facilitate what our PM calls ‘ease of living’ for the largest possible number of our citizens. Here’s how this is working today:

• Today India has not only the second largest number of netizens, but also the largest number of citizens not on the net. And even now, two out of three new people joining the internet is from India.

• And today, India is the largest consumer of data in the world, more than China and the US put together.

• 1.3 bn unique biometric identity cards have been issued in India, in the democratic world’s largest exercise of ensuring the rights of every citizen by bringing them on

• 41% of the world’s real time financial transactions happened in India, at 48 billion. The second largest was 18 billion. In one month alone, ie, January this year, we did nearly 9 bn online financial transactions.

• Startups have been turbo charged by this digital transformation which has empowered India’s most valuable resource: its hundreds of millions of young people. And so, not only do we host the second largest number of startups in the world, we also have the third-largest number of unicorns in the world. Even better, India today displays the fastest rate in terms of adding unicorns every day: in 2022, one unicorn was added every nine days.

Ladies and Gentlemen,

How is all of this impacting upon India’s economy? Put simply, today India is the largest and most exciting economic opportunities in the world. Not of course that I assume you will be investing today, but this is relevant for your tomorrows. Let me emphasize the following points of transformation that are underway:

India’s GDP is around $3 tn. It took us 67 years to take our GDP to one trillion. It took a further eight years to move from one to two trillion. But as we have seen, the third and most recent trillion-dollar addition to our GDP took a mere five years. India’s total GDP size is now the fifth largest in the world.

And of course, modesty forbids emphasizing whom we just overtook.

India is the fastest growing major economy on the planet, at 6.6% GDP growth. We had set the pace not just this past year, but also before the pandemic.

If, as detectives tell us, we should follow the money, then the world is increasingly beating a path to India’s door. Consider this example of transformation: the total FDI that India received since independence was US $ 932 bn, but US$ 532 bn of this came into India in just the last eight years. As data shows, investment is not entering India from one or two sources, but is being collected from 162 separate countries, whose businesses are investing in 61 separate sectors—a greater level of sectoral and nationality-based diversity than in any other country. Even in terms of our federal system, it is interesting that FDI is flowing not just into five or ten chosen states, but into 31 separate States, all of whom are actually competing to offer investors the best possible terms.

And since 2015, year on year, our FDI inflows have risen.

Our trade has risen in this period of time, with exports having cracked through the artificial ceiling of $400 bn, with a raft of new companies and products convinced of their capacity to export new and quality products to the world. Indeed, India has remained connected closely with the world, as we maintain Free Trade Agreements with Korea, Japan, ASEAN, Australia and UAE, among others. And we are working on an FTA with not only the UK, but also with the EU and Canada.

But it isn’t just trade that is driving growth. In actual fact, India’s GDP growth is primarily driven by domestic demand—some 67% of it comes from within. In fact, one of the major drivers of demand in India comes from the rise in consumption power of people in rural and peri-urban communities. It is also driven by the extraordinary youth bulge, as India is, and will remain for the next four decades or so, the planet’s largest base of young people, at an average age currently of around 29 years. And the youth are driving the enormous boom in entrepreneurship, through startups, through new businesses, and through innovation.

It could legitimately be asked: is growth all there is? That’s a valid question. And I’m happy to emphasize that poverty—a searing indictment on our collective conscience in any country—is also reducing more sharply than ever before. The IMF estimates that absolute poverty is down effectively to zero. And the UNDP estimates that some 415 mn people have been lifted out of poverty in the last fifteen years or so. This is a remarkable achievement, especially as consumption inequality has reduced to to its lowest levels in 40 years, with the Gini Coefficient of inequality being 0.294. Indeed, since the COVID pandemic, we have ensured that some 800 mn people have access to affordable food—again, no mean achievement for a country that, even 60 years ago, could not feed its own people without food aid.

Reduction of poverty is being matched by a nationally-driven effort to reduce the carbon intensity of India’s growth—even though at 1.8 tonnes per capita, India’s emissions are a fraction of larger economies. Indeed, we have met our Paris Commitments of 2015, to reach 40% share of power from non-fossil sources over eight years ahead of schedule; this will reach 50% by 2030, at 500 GW. We have also pledged to reduce cumulative emissions by one billion tonnes by 2030, and to cut emissions intensity of our GDP by 45% by the end of this decade. 

I do not need to emphasize here that if India gets it right in its effort to raise hundreds of millions of its citizens into prosperity in a manner that has a modest impact on the earth that we share, and within a democratic framework, there is an obviously beneficial impact for all of you. 

And that, ladies and gentlemen, brings me to my final point. What should matter to you, as a young and idealistic audience, is that the true benchmark of change in India is more intangible than anything statistics can tell you. And that is, put simply, a visible sense of confidence and hope. Young Indians believe profoundly that their lives will be more comfortable, more productive, and more materially-rewarding than that of their parents. They are comfortable in their skins as proud Indian citizens; they are proud of their history and tradition, and they are assertive in their conviction that the future is in their hands. That extraordinary sense of confidence is visible everywhere: in India’s streets, offices, its festivals and its institutions. And it has to be seen to be truly believed. I sincerely hope you will visit India and see for yourself what is actually underway. Because the transformation of India is truly Incredible. And it matters to every one of you here. 

Thank you very much for your patience.