Key policies of the Indian Government under Prime Minister Modi

26 May 2015

By Stephen Manallack and Michael Moignard

This month, the Modi Government will have completed its first year in office. Stephen Manallack and Michael Moignard, both “veterans of the India-Australia trade and business relationship”, recap five key policies of this administration as it heads into the second year of its term.

  • Make in India. A vision to increase India’s productivity as a manufacturing nation, increasing research and development, investment and exports. The drive is to become the next significant manufacturing hub for Asia. While China’s costs increase, especially their wage costs, India has a wage and manpower advantage in the future. This strategy will rely on new investment from local and international firms, and an increase in innovation in the manufacturing sector. India’s automobile industry shows what can be done with new manufacturing investment. The areas of interest will include the defence, aerospace, steel, and pharmaceutical industries. ‘Make in India’ will be a major driver of employment for the next generation of Indian skilled workers.
  • Digital India. This strategy is concerned with increasing the coverage of digital services across the country. The government has set ambitious targets for a national broadband network and 100 per cent cellular mobile coverage to all rural areas. ‘Digital India’ will use ICT to promote increased productivity in the public sector through provision of Government programs and services electronically, including state and municipal government services. It will also lead to better delivery and governance of programs, reducing corruption and administrative bottlenecks.
  • Smart Cities. Ensuring that urbanisation in India happens in a sustainable and planned way is a major undertaking for all levels of Government. India is currently undergoing high levels of urban growth which will strain existing infrastructure. The ‘Smart Cities’ program will address some of these challenges through both urban rejuvenation of existing cities and the creation of new satellite towns. At its most basic the ‘Smart Cities’ program relates to delivering energy, water, and waste management and transport services alongside improved municipal governance at international standards to these new and rejuvenated cities. At its most developed, the ‘Smart Cities’ program has a vision of building new cities with fully ICT integrated services across the spectrum, using innovative monitoring and management solutions and environmental technologies.
  • Clean India. The development of environmentally sustainable programs in sanitation, water and waste management is a clear objective of the Government of India. In recent speeches the Prime Minister has focused on the Ganga Rejuvenation project and increasing hygiene in rural households. The government will address the challenge of solid waste management in its cities by increasing waste collection and waste recovery services including recycling practices. There are also major projects taking place to improve sewerage and water treatment facilities in cities.
  • Skill India. This is an overarching vision, which is an integral part of all the strategies above. The enhancement of the Indian economy will only occur if there is a major increase in skill levels across India’s working population. The ‘Make in India’ program is going to have a significant impact on vocational training to address the lack of formal qualifications across Indian manufacturing industries. It is suggested that over 250 million workers will need new skills over the next 10 years. The current education system in India cannot cope with such a challenge without significant change. New ways of teaching; new schools and equipment and the skilling of teachers themselves are all areas of need. This is perhaps the most urgent of requirements of the Indian economy at the present time.