India, as a nation, embraces and exemplifies its inherent diversity in every aspect, seamlessly integrating it into its national identity to promote unity in diversity. This diversity spans religions, ethnicities and social structures across a population of 1.4 billion, reflecting its pluralist approach since its inception, contributing to the diversity dividend.

Being the world’s largest democracy and a young country by demographics, diversity stands as a pivotal asset in India’s favour. It adds a qualitative layer crucial to propel India’s development and ascent in global significance. It enhances the quality of life in India by embracing a variety of perspectives, beliefs, and fundamental tolerance towards others, fostering inclusivity.

India utilises its potential to mobilise its people around a shared national vision that incorporates its cultural, religious and economic diversity. This leads to a significant competitive advantage over less diverse competitors in the long term globally, fostering flexibility and creativity. This way, India maximises the value of its demographic dividend and leverages its democracy.

Moreover, it enables the government to promote mass inclusion, strengthen social cohesion, and garner international goodwill, thereby enhancing its soft power and attracting investment flows that elevate its global standing.

Significance of diversity

Diverse sectors and private players drive economic growth by offering consumers choices and compelling companies to enhance goods and services. Competition leads to cost reduction and increased affordability for consumers. Private sector involvement, especially by entrepreneurs, significantly contributes to job creation, reducing unemployment and stimulating economic activity.

India’s nominal GDP is forecast to rise from $3.5 trillion in 2022 to $7 trillion by 2030. S&P Global has projected that India will become the third-largest economy in the world by 2030. Efficient resource allocation in a competitive environment fosters overall economic growth, enhancing a country’s global competitiveness.

More quality employment opportunities with respectable wages and incomes, especially for women and youth, are needed for Viksit Bharat by 2047.

The competition encourages entrepreneurship, innovation and growth of small businesses, bringing diversity and dynamism to the market. Private players continuously improve products and services, benefiting consumers and maintaining adaptability to market changes. Economic growth from private sector participation boosts government tax revenues for reinvestment in public services.

India’s focus includes harnessing its youthful population, improving the business environment, and aligning with global trends for sustainable economic development. Initiatives such as reducing trade barriers, promoting sectoral growth, and subsidy reform are crucial for India’s economic progress and global integration.

A focus on sustainable growth, inclusivity, and resilience will be essential to realising India’s vision of becoming a $7-trillion economy and fostering prosperity for all its citizens.

The significance of diversity and inclusion is evident and compelling for the nation’s growth and development. India’s national unity grounded in economic and political freedom is a fundamental prerequisite for achieving both economic objectives and wider political benefits. The government must focus on these key factors to leverage diversity for sustained growth:

Key factors

Social stability leading to sustained economic growth: India’s historical trajectory underscores the necessity of embracing its diverse religious and cultural identities for development. Periodic clashes and tensions between religious and ethnic communities have disrupted economic progress for decades. The liberalisation of India’s economy in the 1990s played a pivotal role in mitigating the nation’s struggle against identity politics. With a renewed focus on unlocking economic potential, the government facilitated a phase of relative social stability, propelling India into a period of rapid progress.

Embracing goodwill and political capital: Social stability is essential for executing major structural reforms like land reform, privatisation, and FDI liberalisation. Prolonged anti-government protests pose a distraction for the government, diverting attention and depleting political capital that could otherwise be directed towards reform efforts. In a hyper-polarised political climate with protests in the streets, engaging entrenched interest groups becomes more challenging. In such an environment, the perceived intentions behind reforms are often viewed through the lens of identity and power politics, amplifying divisions and undermining the successful implementation of reforms.

India’s soft power: This plays a pivotal role in its global positioning. Its inclusive, democratic, and progressively liberal capitalist model serves as a cornerstone of its soft power, fostering strong ties with key global powers such as the US, Europe, and beyond. However, internal conflicts and policies perceived as illiberal by the international community can undermine India’s soft power. Such situations may lead to perceptions of diverging values and diminish India’s soft power. Therefore, mitigating internal conflicts is paramount to fully leverage this advantageous position and enhance India’s global influence and reputation.

Benefits of demographic dividend: Inclusion is pivotal for sustaining India’s robust entrepreneurial ecosystem, enabling entrepreneurs from diverse backgrounds to establish globally competitive businesses. India’s entrepreneurs have thrived and contributed to harnessing the demographic dividend largely due to their ability to access capital and merit-based hiring practices, transcending religious or communal affiliations. Therefore, maintaining an inclusive entrepreneurial ecosystem is imperative to retain and attract entrepreneurial talent, ensuring India’s sustained economic growth and competitiveness.

Addressing these factors is paramount for India’s continued economic growth and global positioning enhancing the quality of life of its citizens. Embracing diversity and fostering inclusion are not only ethical imperatives but also strategic necessities for India’s qualitative progress and prosperity.

Vipin is Chairman, National Board for Quality Promotion, and Shivani is Analyst Policy Unit, Quality Council of India