Date: 02 Dec, 2023
In an era marked by rapid technological advancements and ever-changing consumer preferences, India has emerged as a dynamic and resilient force, distinguishing itself from other developing countries. It possesses the potential of a developing economy yet manages to curb the risk factors which makes it the best suited market for growth seeking investors. What sets it apart from other developing economies around the world is its ability to adapt to adverse conditions, evolving market dynamics and its capacity for innovation.
This unique approach has allowed India to take calculated risks that have ploughed back substantial rewards throughout its history. In this context, let’s explore how India has leveraged these attributes to maintain a competitive edge and thrive in the challenging global economic scenarios, showcasing a unique model of economic growth and market success.
The White Revolution
Before the 1970s, India was a milk-deficient nation, majorly relying on large scale imports to barely meet its requirements while ranking amongst the lowest milk producing countries in the world. The "White Revolution" movement initially aimed to turn India self-sufficient in terms of dairy production, but its success intern made India the largest milk producer in the world.
It laid the foundation of AMUL (Anand Milk Union Limited) and resulted in increase in domestic milk production by collaborating with the local farmers, under the visionary leadership of Dr. Verghese Kurien. Under this movement, farmers were fairly paid and were introduced to modern dairy farming techniques which not only addressed the nutritional concerns of the nation but also turned farmers into entrepreneurs, demonstrating that innovative and flexible solutions can be applied to traditional industries also.
Liberalization, Privatization & Globalization
During the phase of the 1990s, India, after facing a series of wars, famine and a national emergency, was in dire need of some miraculous step. India's foreign exchange reserves were not enough to finance even three weeks' worth of imports and its economy was in crisis. On July 24, 1991, The Government of India announced a new Economic Policy and made some significant structural adjustments reforming the economy and adapted to embrace globalization, privatization, and liberalization (often known as LPG reforms) that proved to be a turning point in the history of India. These reforms opened up the Indian market for the rest of the world while encouraging foreign investments to support the country.
Globalization, in particular, played a major role in fostering flexibility and innovation. Indian companies had to adapt to the international standards of business, understand global market and its consumer preferences, and compete with the multinational corporations. This forced Indian businesses to innovate, streamline operations, and provide better products and services in order to secure a significant place in the global market competition.
Privatization encouraged competition, increased overall efficiency, and reduced bureaucracy in several sectors, further promoting a culture of innovation and flexibility. The liberalization of trade and investment rules removed barriers that previously prevented Indian businesses to exercise trade freely, making it easier for them to expand and collaborate with international partners.
The Decade of Innovation
“Decade of Innovation” term was coined by the Indian government in 2009, aiming to increase the Gross Expenditure in Research and Development (GERD) to 2% from its current level close to 1% of GDP during the tenure of 2010-2020. It also took several measures to raise private sector’s investment to 1% of India’s GDP. Consequently, the “Decade of Innovation” witnessed India climbing to the 48th position in the list of top 50 innovative countries on the Global Innovation Index 2020.
India has become a hotbed for innovative ideas and entrepreneurship with an ever-growing population of young, tech-savvy individuals and educational institutions laying their focus on R&D.
Upon recognizing the further potential, the government supported innovation through various initiatives and campaigns like "Startup India" and "Digital India." Such programs provided important resources, mentorship, and created a pipeline to fund innovators. Indian startups have outperformed beyond the domestic territories, expanding on a global level proving its adaptability of in global markets.
Make in India
Launched in 2014 by Prime Minister Narendra Modi, “Make in India” campaign played a major role in promoting self-reliance for domestic production, creating more job opportunities in newer areas and lowering the dependency on imports. It not only focused on supporting the traditional industries but also on the budding sectors like IT, biotechnology, and renewable energy. This approach was a huge turning point in the history of India as it managed to foster innovation by encouraging businesses to look for creative and sustainable solutions that can be produced locally in India and could cater to a larger population. Another remarkable achievement unlocked through this initiative was the wave of entrepreneurship that led to more and more startups and technological innovations. Here too, India’s ability to adapt to the ever changing market dynamics played a huge role in its success. During the 9 years of this project, Make in India has substantial accomplishments across 27 sectors including strategic segments of manufacturing and services as well.
India’s ability to adapt to challenging situations was exemplified vividly in the daring move of demonetization in November 2016 when the Indian government invalidated high-denomination currency notes (500 and 1000 rupee banknotes), replacing them with new ones in a rather swift move. This step aimed to curtail the shadow economy and reduce the use of black money & counterfeit cash to fund illegal activities. This showcased the government's adaptability in handling pressing economic challenges and also resulted in popularizing cashless mode of transactions. This not only highlighted our flexibility and adaptability but also the fearless attitude of taking calculated risks and emerging victorious.
UPI rose to popularity just around the time of demonetization, turning into a cornerstone of the 'Digital India' movement and a symbol of innovation and flexibility in the Indian market. What sets UPI apart is its ease of use, swiftness, security and its ability to accommodate the dynamic needs and diverse user base of the Indian population. It is no wonder that the quick and efficient nature of UPI payments resulted in cost savings of $12.6 billion and added $16.4 billion to the Indian economy in 2021, as per a study conducted by CEBR. It not only became a game-changer move for India's digital payments landscape but also exemplified India’s excellence in innovation to the world.
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Date: 02 Dec, 2023