At one level, India 2023 looks very good. After all, we have overcome Covid, the economy is back on track, we are going to be hosting the G20 summit, and all is well.
Yet 2023 will be a year of reckoning. Here are 7 challenges India should brace itself for.
1. Greater global scrutiny
India will host the G20 summit in 2023, and it feels like a year-long event that began in December 2022 itself. India is being decked up for the world.
As Qatar just found out, inviting the world over is a great opportunity to showcase your country but it also brings greater global scrutiny. And in India’s case, the bar is much higher, given we are the world’s largest democracy.
The global media will see the G20 summit, coming as it does just a year before the 2024 general election, as a good peg to have a closer look at us. The stories may often not be flattering, and how we handle this criticism will be a test of how mature we are after 75 years of freedom. The world will be watching.
2. China, China, China
The elephant in the room is the dragon. India’s border tensions with China will be under spotlight.
Modi government will have to manage the situation like a tightrope amid proximity with the West, war in Ukraine, the G20 summit and a looming national election.
3. A global recession?
There’s never a good time for a global recession, but just a year before India’s 2024 election, an economic downturn will hit us harder. Regaining the fastest-growing economy tag is not good enough for India. Given the widening economic inequality, India needs much higher growth, and a transformative increase in exports.
A global recession makes that unlikely for India. Coupled with a slowdown in China, global headwinds will be a challenge India will have to grapple with in 2023. The plans to make good use of diversification of global supply chains will get a reality check as well.
4. Unemployment fears
In the absence of at least 6% economic growth, we are unlikely to see the return of high capital expenditure by private industry. Youth unemployment in India is unsustainably high.
This could reflect itself in elections and protests, a headache for the government with the G20 summit around. With the general election due in 2024, the BJP government will need to be more creative than just pumping in money in big infrastructure to create jobs.
5. Higher oil prices
The lowest forecasts for crude oil prices are around $90 a barrel. That’s bad enough for India. The worst-case scenarios predict up to $200 a barrel. Inflation in India may not be as bad as in many other countries, and we are used to at least 4-6% inflation anyway.
Yet the crude oil prices are a big risk for India in 2023, given that inflation is already above the tolerance level of 6%. Crude oil prices in a volatile world are a big risk to inflationary pressures and to the strength of the economy as a whole.
6. Climate change and air pollution
Government data shows the number of extreme weather events experienced by India increased drastically in 2022. Who knows what 2023 will bring?
While we work to shift to renewable energy to reduce climate change, we need to work harder to make our homes, roads and croplands climate-resilient. Heatwaves, lightning strikes, sudden bursts of rainfall flooding our cities — we have experienced all of this in 2022.
Are our responses normal? 907 people dying of lightning strikes in just a year is not normal, for example. The devastating floods in Pakistan next door are an example of how much worse it can get. Meanwhile, air pollution is no longer just a Delhi problem.
Cities like Mumbai, until recently considered to be breathable, are no longer free of smog. The environment is increasingly unfit for 1.4 billion people. This needs to be a greater priority in 2023.
7. Cricket World Cup
Cricket, the Indian sport accidentally discovered in England, will have its World Cup in 2023 in India. Indian cricket has suffered by playing too much. India won the last World Cup held in India in 2011. Not winning this World Cup on home turf is not an option.
Here’s hoping India turns its challenges into opportunities in 2023.
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