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Economic future of India

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Satyavrat Ved
My personal blog.

What has happened is not normal; the world will not be normal after the COVID-19 crisis is over. It won’t be business as usual and every country will safeguard its interest with priority. As per current trends, it seems that countries will try to be less dependent on other countries and produce as much of the requirement of their resources. The present situation is of autarchy; a situation where trade is only happening for medical essentials. Many countries are waking up to the realization that dependence on China is unreliable, and not in the interest of them and thus should reduce.

COVID-19 has brought new migration trends, which were never expected by any economists in the world. The movement of laborers from urban to rural is unprecedented. The reason they worked and lived in these cities was the lack of remuneration for their work in villages and small towns. India though a developing country earns more from the tertiary sector than the primary sector just like developed countries, with most of its largely unskilled workforce employed in the primary sector. India was deindustrialized during the colonial period, which led to excessive dependence on agriculture. Earlier agriculture was a seasonal job with people employed in more than one occupation. India then, much like today’s China had towns with a labor population specializing in the production of particular commodities.

It is unlikely that in the coming days, laborers will like to move back to a few urban centers in India. With labor unwilling to move to the established urban centers, production has to be decentralized to smaller towns and the hinterlands.

As a result of this policy shift, smaller cities will rise, so will labors income. Labour will specialize in production in hubs closer to their villages with production based on mostly locally available resources. The government will have to support farmers with direct subsidies. The dividends of all these economic activities will be sweet: It will increase the income of the workforce and reduce rental costs in big cities, one of the highest in the world. There will be a huge demand for manufactured commodities which will increase investment and employment with tier 2 and tier 3 towns emerging as a popular destination for both.

In a post-COVID world, India’s military must be a part of India’s economic objectives. Much of the Indian army strength comes from Indian villages. So far, India’s lack of assertiveness has led to many lost opportunities. India needs to endeavor outside its so-called natural geographic or psychological boundaries militarily. A country that has a big share of humanity has a legitimate right over more resources.

Thus, we need to think about our neighborhood in the new light. Under a new paradigm, there are three kinds of nations in our neighborhood. The first category is: countries that will allow our labor, business or capital to operate in their land; these are friendly territories whose resources are available for our utilization in some form. Efforts should be made to bring them closer with overall engagements. Second, countries that will continue or emerge as harmful to India and whose presence is to unnaturally contain us. Dismantling of such nation-states, for example, Pakistan, should be our national objective. Third, countries that are to be destroyed themselves. Such countries will have internal strife or rule of law will collapse or will waste their resources in puritan religious or political pursuits. They will provide opportunities for other countries for growth and control over resources. In its neighborhood, India should have an undisputed claim over such failed or failing nations’ resources.


Any remnants of inward-looking military policy should be replaced with outside-in strategy.

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Satyavrat Ved
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