Modi's Saptadhara Initiative: A Wishlist Without Reforms for India's Growth

Prime Minister Modi's Saptadhara initiative outlines seven development streams for India. This plan reiterates existing goals without detailing necessary reforms for faster growth. India's current growth rate is strong but insufficient for high-income status by 2047. Job creation remains a significant challenge for the educated and impatient young population. Political hurdles prevent the implementation of radical reforms needed for true progress.

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Good politicians are wordsmiths. Narendra Modi is among the best. In his Independence Day speech, he unveiled a new mantra, Saptadhara - 7 streams that will supposedly carry India towards Viksit Bharat by 2047.

The 7 are manufacturing, agriculture and food processing, technology and innovation, infrastructure and connectivity, defence, the green and blue economy, and soft power. Modi talked of complete manufacturing value chains, AI, quantum computing, robotics, 6G, high-speed rail, inland waterways, drones, hypersonic weapons, green manufacturing, fisheries, tourism and yoga. Wonderful. Who could possibly disagree?

That is precisely the problem. Saptadhara is a wishlist masquerading as strategy. The list builds on existing programmes or reiterates earlier targets. We have heard variations of Make in India, Digital India, Aatmanirbhar Bharat, Gati Shakti, Startup India and Viksit Bharat for years. Renaming old ambitions as 7 sacred streams does not tell us how India will suddenly grow faster.

India has averaged 6.5% GDP growth in the last 25 yrs. This has accelerated in the last 3 yrs, since 2023-24, to 7.1%, 7.2% and 7.6% respectively. Despite the US war on Iran, India may come close to 7% again this year, though RBI projects 6.6%. No other democracy has sustained anything approaching this pace for long. Democracy requires reconciling farmers, workers, industrialists, environmentalists, castes, states and regions. Autocrats can bulldoze opposition, democrats must negotiate it.

So, sapta per cent growth is an achievement. But Surjit Bhalla has calculated that to attain high-income status by 2047, Viksit Bharat's target, India will have to achieve 9.8% compound growth in per-capita income. Which means maybe 10.8% in GDP alone. There's no precedent for such rapid growth in history, save in China. Even with the most radical reforms, India would be hard-pressed. But Saptadhara is a wishlist, not a blueprint for reforms.

For political reasons too, India may need more than 10% GDP growth to generate the quantity and quality of jobs demanded by an increasingly educated and impatient young population. The recent student agitation should have rung alarm bells. Youth protests centred on examinations, paper leaks, jobs and accountability became sufficiently serious to put the government on the defensive.

Modi's Independence Day speech consequently emphasised yuva shakti, free online competitive-exam coaching and AI training for 1 cr youngsters. But coaching for scarce jobs is not the same thing as creating millions of good jobs. Where is the reform programme capable of doing that?

GoI has finally implemented the 4 labour codes, consolidating 29 central laws, an important reform delayed for years. That is only a marginal reform, and the provision of paying gratuity after 12 mths of employment is not a reform at all but a step in the wrong direction.

India has negotiated major trade agreements with Britain and the EU. These could substantially expand preferential access to global markets, and aid GDP growth. Yet, the rise of geopolitics means that the world economy is fragmenting and undermining the role of trade in lifting economic growth. Trump's constant demands from India highlight that negative trend, which may not disappear even after Trump's term ends.

India still needs much deeper integration into global value chains, fiercer domestic competition, easier exit for failed firms, faster courts, better education, freer land markets, privatisation, lower trade barriers and a drastic pruning of the regulatory jungle. These are not new ideas. But political hurdles have long limited what can be done without making enemies of important interest groups.

Despite constant talk of the need to achieve Viksit Bharat targets, nothing is done to implement the required reforms. Why? Because politics punishes reformers. Radical reform creates losers immediately while winners often emerge years later. Shut an inefficient public enterprise and workers protest tomorrow, consumers may benefit gradually. Liberalise farm marketing and organised lobbies hit the streets immediately. Cut protection and inefficient manufacturers scream, future exporters who gain from cheaper inputs do not yet exist.

BJP has increasingly become a party of labharthis as well as entrepreneurs. Electoral politics rewards subsidies, reservations, free food and transfers today more reliably than productivity reforms yielding gains 5 yrs hence.

This helps explain Modi's enthusiasm for 'One Nation, One Election'. Simultaneous elections could, in theory, give governments several years between national electoral battles in which to swallow unpleasant medicine. But constitutional change is politically formidable, especially in today's combative atmosphere.

Indian civilisation conveniently supplies plenty of 7s: Saptarishi, the 7 sages; Saptasagar, the 7 seas; Saptapadi, the 7 steps of Hindu marriage; Saptagiri, the 7 hills. Now, we have Saptadhara, 7 rivers of development. Rhetoric flows beautifully. Reforms do not.

Unless GoI tells us what politically painful things it will do differently, Saptadhara will remain 7 streams of rhetoric flowing into the same old river. And GDP growth will remain stubbornly at sapta per cent.

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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