The President Macron visit to India background is the signing in 1998 of a “Strategic Partnership” between the two countries. The issues with such a giant are numerous and cannot be reduced to business deals. Geopolitical aspects are becoming increasingly important as the world becomes more volatile and China’s rise a concern for everybody and not only India. But we must recognize that economic issues are still the magnet of the relationship.

A simple reason for this is that India is already the third largest economy in the world if one measures its National Income not at the current market exchange rate but at purchasing power parity, i. e. According to the level of its domestic prices. Moreover, its growth rate has accelerated steadily since the liberal turn of the 1980s. But is it right to base this relationship on the paradigm of Indian hypergrowth?

The myth of double-digit growth

It must be said that the founding fathers of the economy provided for an iron law of stationary growth constrained by population growth (Malthus), or because of diminishing returns on capital (Ricardo). Then, in the 19th century, the ideology of unlimited productive forces arose on the condition of overcoming the « capitalism’s contradictions » either through revolution (Marx) or innovation (Schumpeter). But none could have imagined this extraordinary expansion of the world economy as experienced after the Second World War at a rate of 4 to 5% per year. And even less so the explosion of growth in emerging countries at the turn of the last century with growth rates approaching 10%, as in China.

So much so that India itself began to dream of a “double digit growth rate” after achieving 8% annual growth during its 10th Five-Year Plan between 2002 and 2007. It is the same economic myth that has served as an electoral slogan for the current Prime Minister Narendra Modi to conquer the power after decades of rules by the Congress Party, which failed to keep this promise with its social-democratic recipes. The Modi’s agenda was clear: A voluntarism of leadership, an India “cleared” of corruption and bureaucracy, and energized by the prospect of a “Hindu India” (Hindutva), relying on the animal spirits of the large merchant communities such as the Marwari or Gujarati.

Slower growth, weak job creation and a deteriorated environment

The least we can say is that the demonetizing operation in November 2017, followed by the chaotic introduction of the GST (Indian VAT), has rather stopped the cycle of recovery of the Indian economy, which has been hesitating for the last few months between 6% and 7% of growth and is marked by a jobless growth and environmental damages such that some experts doubt the future of the Indian economy. Especially since the ideological war launched against religious minorities or the secularist camp seems to reflect the shift from an economic agenda towards a political identity agenda that look very dangerous for the stability of Indian democracy.

So how can we sketch India’s economic future today? Financial markets and the IMF are still buying (or rather selling) the prospect of continued strong growth in the coming decades, around 8-10% per year. This kind of linear scenario leaves me doubtful. Far from being a “pessimist” on the economic future of the Indian world, I think it might be time to understand that the religion of growth is perhaps not the unbreakable horizon of humanity. Not to mention that we now know to what extent the GDP indicator’s measure of wealth, or rather of development, is increasingly misleading and dangerous. Two factors play a major role in any foresight exercise on the future of the Indian economy:

The religion of growth may not be the unbreakable horizon of humanity.
First of all, the humanity’s entry into the anthropocene era and the total un-sustainability of quantitative growth as we appreciate or measure it today. This is true for the planet as a whole, as the appeal of the 15364 WSA scientists published in Biosciences magazines in November 2017 has just forcefully pointed out. This is even more true in India, whose biocapacity is severely limited because of its high population density with, for example, catastrophic air pollution in the whole Ganges valley on the very day of the WSA call.

It is true that any crisis can be salutary or providential and create a real turning point in our growth models. This is partly true for India, whose model of democratic governance reacts always under pressure from constraints rather than China, which prides itself on being able to anticipate challenges in advance thanks to an omniscient dictator.

A good example is the adoption of the first Green Revolution in the 1970s, which effectively realigned agricultural production to population growth. Or the extraordinary rise of solar energy in recent years. The capacity for innovation, especially Jugaad or frugal Indians, is also legendary. But so are the ecological and social disasters of the Green Revolution, particularly in Punjab where there is an explosion of cancers; or the foreseeable ones of a speculative and non-decentralized  power plants with solar energy  increasingly encroaching on rare earths. All these examples show that technical solutions are not THE solution to find an Indian way of sustainable development.

Authoritarian solutions have never produced sustainable development in the long run

The second point is more political. India is threatened by the ATAKTA BHARAT scenario, that of a deeply divided India, as the team of experts gathered by the Davos Forum in 2002 in New Delhi put it well, including the actual Vice Chairman of the former Planning Commission, Rajiv Kumar. The arrival to power in 2014 of the Prime Minister Narendra Modi with the massive support of the RSS hardliners is just one manifestation of this.

Beyond the caste system or the regional or religious communities that make up the Multilayer India, the impossibility of finding a consensual path is based on economic ideologies that are highly incompatible and that only a certain tradition of tolerance had allowed to coexist after Independence. The authoritarian temptation of Narendra Modi, and in particular the dangerous play of intolerance towards so-called religious and regional minorities, as shown by the growing schism between the Hindi speaking north and the south, can only reinforce the fear of the Atakta scenario. And it seems totally excluded that the Indians would succumb to the temptation of a fascist authoritarian path led by a charismatic leader, as shown by the strong resistance to Prime Minister Modi.

Looking for an Indian synthesis of “good development”?
The co-existing economic ideologies range in India from the old model of Arthashastra dates from the Maurya Empire, a kind of benevolent enlightened despotism, to the Gandhian model that can be assimilated to the current theories of de-growth, and in the middle various capitalist paths either ultra-liberal and predatory or paternalistic.

Who will be able to rewrite an Indian synthesis today, much like Jawaharlal Nehru did just after Independence when the ecological challenges and mass poverty are back in the spotlight? This is the true question the Indian economy is facing and which will determine its future in the medium term, especially with the job creation challenge to benefit from the huge potential demographic dividend that will be spread over two more decades. Failing this, these masses of unproductive and impatient young people will become dead weight and undoubtedly dangerous for the stability of an explosive subcontinent.

One thing is certain, the myth of double-digit growth is a thing of the past and the indicators to be followed are ultimately what the Nobel prize winning economist Amartya Sen has spent his life elaborating: development as the fulfillment of people’s freedoms. From this point of view, India is still at a crossroads. If she were able to implement a sustainable transition to a post-industrial and ecological society, it could be ahead of the rest of the world.

The Mass is far from being said, but from this point of view, India’s future is also France future and the two countries should work together more on a real sustainable agenda than some coup like the Rafale or the nuclear EPR. The formal Solar Alliance launch in New Delhi March 11, 2018 is a good step forward. Much more can be achieved.