The Big Take
Many recent reports cited the FM’s plan to increase the road and highways ministry budget by 15% for FY-23.
Here’s my big take…
There is greater impetus and drive for development. The road and highways ministry is constructing and upgrading existing infrastructure when other nations are exercising caution in spending. China, the behemoth built on construction, too is taking a backseat to its high-fuel growth plans. But we aren’t. Despite plausible risks from inflation, geopolitics, and a slowdown in the global economy, we are driving full throttle ahead.
Nationwide airports, railway stations, and highways are being constructed, expanded or renovated, especially in far-flung remote places. The idea is simple: connectivity for all. Until now, very few companies have made an effort to establish full-fledged rural distribution and manufacturing hubs because of the minimal economic potential. In a country where rural areas are dense population centres, schemes like these increase the potential to tap into the rural sector.
Access to cheap internet, inclusion in development schemes, and more significant higher education opportunities are preparing the rural youth for economic upliftment. They are poised to fill our large employment deficit, especially in public sector posts. And, as the rural population transforms, so will the public sector companies. Mainly serving low-income and underserved communities, public companies have long been getting away with sub-standard and aged services. That won’t continue for long because a more educated, prosperous India will demand the bare minimum in quality and quantity.
COVID-19, though, has presented obstacles to our growth. Education has been the biggest victim, second only to the economic costs. While, yes, I have touted education as a contributing factor to our growth, I also identify a liability in it. During the pandemic, the affluent population with high-speed internet and expensive gadgets provided seamless online education. They ensured there were no or minimal education gaps. Life was business as usual, albeit inside our homes. The pandemic was a massive disaster for the poor reliant on government schools or other offline educational opportunities. Government schools lacked the appropriate technology to conduct in-person classes. Teachers either lacked a laptop or the internet or both. And the same was true for the students. This led to the biggest educational shock in decades: two years of missed educational opportunities for the underserved and low-income populations. This is also the reason for one of the broadest educational inequality gaps between the wealthy and poor.
While this hinders our chances of leveraging our vast rural population base in the short term, we can certainly overcome this in the long term. This assumption drives the record-setting stock market rally and our optimism for the economy’s continued growth. We are betting big that our rural youth will eventually catch up to their urban counterparts and spur growth in those far-flung regions.
The model resembles how poorer, underdeveloped countries rely on foreign remuneration for development. Members of the community travel to economic hubs, in this case, urban sites like New Delhi, for income opportunities. The better-paying jobs allow them to send money to family back home. The money received is added to the local economic cycle, increasing its size and potential. This drives consumption and development, which over time can contribute to the growth of the local and, in turn, national economy.
Yes, there are risks, and missteps that can cost us this projected era of growth. The government needs to be vigilant and tactical with its planning, not political. Logic, not emotion, should drive all significant decision-making going forward as we make India the $10 trillion economy it should be.