Technology boom may help Modi turn 2015 into India's year

Ravi Agrawal is hopeful the mobile revolution will change people's lives

PUBLISHED : Monday, 12 January, 2015, 5:00am
UPDATED : Monday, 12 January, 2015, 7:21am

If there was an annual prize for the "World's Most Hopeful Economy", it would probably go to India. After years of disappointing returns, the world's largest democracy rediscovered vigour in 2014. Stocks rose by a third; foreign investment grew; the economy at one stage expanded at its fastest pace in two years. And the public mood seemed to lift with new hope for a young, tech-savvy India.

One man dominated the headlines, peddling optimism: new Prime Minister Narendra Modi. And, yet, 2015 marks the end of Modi's honeymoon. After all, hope can only go so far.

Modi will need to transition from speechmaker to doer. That suggests 2015 will be a defining year for India. Let's start with economics. Cheaper oil is proving a boon to India's economy: the deficit has shrunk, inflation has fallen, and perhaps most crucially, the government has ended decades of subsidies and deregulated diesel. New taxes on oil look set to generate billions of dollars in excess revenue every year.

India's government will look to use that money well. Can it deliver clean water and power to all Indians? Can it improve the broken infrastructure? Can it begin to fulfil its promise to put a toilet in every home? Or has too much been promised?

India needs more money and investment, likely from abroad. And Modi will need another important currency: cooperation from lawmakers.

Foreign policy has come easily to Modi so far. He will begin 2015 basking in the glow of receiving US President Barack Obama at India's Republic Day on January 26. Good foreign policy means good business. Modi will look to strike deals not only with Obama, but with many other world leaders in 2015 - on energy, on trade, defence, and on infrastructure partnerships.

The great unknown is how he will respond to a major foreign policy crisis. How will he react to a major skirmish with Pakistan? How will he balance his desire to boost Chinese trade with fears about Beijing's growing assertiveness in the region? And what will he do if, in a big global crisis, he is pushed to choose sides between any of Russia, China and the US?

On domestic issues, a year ago, Modi was known outside India mostly for his inability - or worse, apathy - in stopping one of the worst religious riots in modern Indian history, when up to 2,000 Muslims were killed in Gujarat, the state he ran. Modi's perceived role led to his US visa being revoked. Last September, New York received Modi as if he were a rock star. But recent events are cause for renewed worry. Reports of Hindu groups forcing Christians and Muslims to "convert" to Hinduism threaten the very basis of the Indian secular state. Modi will need to not only be a voice of reason; he will also have to rein in the radical fringe elements of his Hindu support base.

The safety of women will remain a major issue of concern. India has let down its women for centuries: they rank 134th in the world for economic opportunities, 126th for education, and 141st for health. How can that be good enough for a country that aspires to be a major world power?

I am hopeful about India's future. My optimism is based less on politics or economics, and more on a larger trend: the country's technology boom. While the West has evolved in its internet use, India has jumped straight to a mobile revolution. The pace of technology adoption, coupled with faster, cheaper hardware, will transform India in ways we are only starting to comprehend.

There will be real changes in peoples' lives and their economies with the help of e-commerce and apps for health, education, banking and transport. Beyond oil, politics or demographics, the biggest headwind for India lies in its adoption of technology. This will be India's real revolution, and it is already under way.

Ravi Agrawal is CNN's India bureau chief. Follow him on Twitter @RaviAgrawalCNN