Page 63 - Nuvama | IC Report 2023

INDIA: THE 5D ADVANTAGE

We now briefly critique India’s democratic credentials on three counts.
A free and fair democracy

One can fault India’s free and fair electoral process arguing that the country has struggled to rack up
voter turnout (60–68%) while some democracies boast a nearly hundred percent turnout.
One must appreciate India’s geographic expanse and population (nearing 1.4 billion) are formidable
roadblocks to maximal voter turnout seen in democracies such as Singapore (population less than
6 million). India must, however, strive to make strides as continued gradual increases in voter turnout
would further strengthen its democratic credentials.
Meanwhile, India deserves a pat for superior participation of female voters in the 2019 general elections
— the latest in the country – wherein women voter participation at 67.18% pipped male participation
of 67.01%.
Judicial juggernaut

The Indian judicial system is notorious for more than 45 million pending cases. Out of this, the top
court has a backlog of 70,000 cases. That some cases have been pending for years is excruciating. India deserves
a pat for superior
Even so, a free and fair judiciary is one of India’s democratic ballasts. The Supreme Court of India is participation of
celebrated for upholding the constitutional rights of citizens—suo moto or by hearing PILs. female voters; in the
The National Green Tribunal, a specialised judicial body established in 2010 that adjudicates 2019, women voter
environmental cases, has undertaken commendable decisions such as the ban on use of commercial participation at
67.18% pipped male
diesel vehicles in the NCR of Delhi and on use of coal in commercial establishments at Morbi.
participation at 67.01%
What instils great hope is that courts are being digitalised. This should lessen their long-standing
backlog in due course.
Central bank

Nearly a decade ago, India looked quite fragile on macroeconomic grounds. Inflation was ruling near
double-digits, inflation expectations were getting entrenched, real interest rates were negative and the
fiscal deficit was large. This bred macroeconomic imbalances, and eventually India was hit by a large
balance of payments shock in 2013.

However, as they say, never let a crisis go waste. Indian policymakers understood that price stability is
the bedrock of the sustainable economic growth. They embraced the idea of more independence and
accountability for the RBI and more transparency to the policymaking process.
In 2015, India formally adopted the flexible inflation-targeting regime. Under this regime, the inflation
indicator and the inflation target were explicitly defined—a stark departure from the earlier regime that
relied on multiple indicators. A six-member Monetary Policy Committee (MPC) was constituted to run
the monetary policy. All this helped restore the RBI’s credibility and price stability.

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