India came out unscathed in 2022 despite importing inflation on account of the sharp rise in crude oil price
India will be entering into 2023 on a confident note. The past few years tested Indian resilience. The outbreak of the Coronavirus was the top challenge for India. Several countries have socially, politically and economically been battered by the pandemic. Yet, India stood firm. From day one, the Indian faith in the evidence-based science with undiluted commitment of the leadership led by Prime Minister Narendra Modi held India steady.
In 2022, India fully normalised life. The vaccination was a success. The people were well acquainted with the best practices. The healthcare was made robust. Facilities were put in place. The people felt confident and they returned to their daily routine life. This was a remarkable success in the face of extreme adversity. The Indian scientists, healthcare personnel and the people at large collectively deserve applause for effectively dealing with the pandemic.
When the economy was normalising the Russia-Ukraine War unfolded, which is still raging even after 10 months. India is a major oil customer. The world plunged into an energy crisis. The crude oil prices went up as much as $127 per barrel. Yet, India dealt with the crisis effectively. The global energy crisis acquired a strategic dimension, as the world became polarised. India was expected to take sides. But PM Modi remained firm, as India remained tied to its national interests only.
Europe has legacy issues in expecting all nations to accord primacy to the problems of the continent. But India’s External Affairs Minister S Jaishankar lucidly argued at the global fora to convince the nations not to take narrow views on problems faced by the world. He steadied the Indian interests steadfastly. Some of the inherent contradictions in the western viewpoints were brought to the fore.
The immediate fallout of the Russia-Ukraine War was the food crisis in some of the countries. India again rose to the occasion. The Indian wheat once more proved crucial to safeguard the vulnerable nations, which were hit hard by the Russia-Ukraine War. The world once more saw that India has always been the first country to respond in times of humanitarian crisis. During the pandemic, India with its Covid vaccines had come to the rescue of several nations. From the Caribbean islands to the African continent and the immediate neighbourhood of South Asia to the South American nations, the Indian made vaccines and medicines were instrumental in dealing with the Covid-19 pandemic.
Additionally, India once more demonstrated that she is a true friend. The Sri Lankan economy collapsed, which set off popular protests against their incumbent government. But India immediately responded and extended an assistance of about $4 billion to stabilise the economy of the island nation. This once more demonstrated that India seeks partnership with the small island nations with development cooperation, which are useful for the people of such countries.
A number of nations resorted to print currencies after the outbreak of the pandemic. There were voices within the country, which called for printing of currency to deal with the disruptions caused by the pandemic. But the government did not budge from the path of economic prudence. The Modi government did not take any shortcuts. In the end, PM Modi was vindicated, because the countries which had resorted to printing of the currencies faced the onslaught of inflation. The supply chain constraints
coupled with the Russia-Ukraine War plunged the western nations deep into inflation. They are not
yet able to tame the runaway
inflation.
But India came out unscathed despite the country importing inflation on account of the crude oil price rising sharply. This was done by sticking to prudent economic policies. Yet, the Modi government was most sensitive to the needs of the vulnerable sections of the society. The Pradhan Mantri Garib Kalyan Anna Yojna for 80 crore people provided free foodfrains, which ensured that none went hungry in the country during the economic disruptions and hardships. This was the caring touch of the Modi government for the people.
The electorate understood the enormity of the challenges which were successfully faced by the Modi government. The people richly rewarded the Bharatiya Janata Party in the elections which were held in 2022. Barring Punjab and Himachal Pradesh, the BJP won all the Assembly elections. In Uttar Pradesh, the BJP government was re-elected, which was a first for any incumbent dispensation since the 1980s. The people retained the BJP governments in Goa, Uttarakhand and Manipur to demonstrate that the pro-incumbency agenda got popular support. In 2022, the BJP also made a loud entry in the Telangana politics by winning a few key byelections.
The Gujarat victory was special for the BJP, for the people reaffirmed faith in good governance with long term vision even while the party had been in power for 27 years.
For the first time, India went past the $400 billion mark in annual exports. This has been one of the most creditable achievements. This has also happened in the post-pandemic era. The global supply chains is in a reset. The Modi government had come out with a slew of production linked incentive schemes to promote local manufacturing in several areas. They were meant to ensure self-reliance for India in some of the areas for which India was dependent on imports. The policies have paid rich dividends. The exports of mobile phones are on the rise. Electronic goods are being exported.
Even critical components such as semiconductor and APIs for the pharmaceuticals saw strong positive momentum. The state governments have come out with their own policies to attract investments in critical areas. Gujarat and Karnataka bagged mega semi-conductor foreign direct investments, which will soon ensure that India will not be dependent on imports.
Also, India became the fifth largest economy, India has pushed the UK behind. India is also racing to become the fourth largest economy within a few years. The economic foundation laid down by the Modi government has given architecture to ensure that India will be the third largest economy in another few years. By the time India celebrates the centenary of Independence in 2047, the country would have already transformed into a most advanced economy, which would be inclusive.
India is entering into 2023 with the G20 Presidency. India is already the voice of the Global South. Now, India has become the hope for all. In PM Modi’s articulation that “this is not an era of war”, the world has seen hope in the Indian leadership to work for solutions to some of the pressing challenges. PM Modi’s mantra to deal with the issue of climate change is already resonating at the global stage. India is the hope for global food security too.
India has all the momentum in her favour to scale new heights in 2023 in economy and social equity. The next year should be a launch pad for the country to take the rightful position in the high table of the global power centre. The strength of the economy will help India scale all adversities. Under PM Modi, India will see a new dawn of development in 2023.
(The author is Director, Public Policy Research Centre)
