Business & economy: Events that will determine India's progress in 2024

Significant developments in technology, finance and commerce could upend the world

PTI12_11_2023_000154A On a roll: Stock markets scaled new heights in 2023; the new year could be way better | PTI

Swag. It was not a traditional Indian attitude. But from Salman Khan’s Tiger who sang ‘Swag se karenge (Will do it with confidence)’ to the alpha male heroes of the recent movies, swag has very much been appropriated by Bharat. Even as the world braces itself for a round of uncertainty about the wars, the narrative on desi streets―high, low and Dalal―couldn’t be more different. Indians are flush with swag and swagger leaping into 2024.

The mood of the nation will be determined not just by the incoming government’s policies, but by some major, far-reaching developments on the economy side of affairs.
India’s space odyssey will hit a pivotal point in 2024 with the unmanned test flight of Gaganyaan.

Prime Minister Narendra Modi referred to the zeitgeist on New Year’s Eve. “India is brimming with self-confidence,” he said. “We have to maintain the same spirit and momentum in 2024 as well.”

While political India’s eyes will be pinned on the Lok Sabha elections in the summer, the mood of the nation will be determined not just by the incoming government’s policies, but by some major, far-reaching developments on the economy side of affairs, some of which are already under way.

The most talked-about, of course, is the hyperbole of how India is all set to become a $5-trillion economy in 2024-2025, if not the calendar year itself. While that has more milestone value than anything else, many significant developments across the technology, finance and commerce spaces could upend the world around us as we know it.

I, Robot

The good news? We’ve only scraped the surface of what artificial intelligence can do. The bad news? We’ve only scraped the surface of what artificial intelligence can do.

While we were mighty impressed by what generative AI programmes like ChatGPT could churn out, 2024 could unfold the true extent of what AI is capable of. Tata Sons chair N.Chandrasekaran told his employees to “proactively pursue the benefits of AI―economically, operationally and socially”. As the year progresses, we will see increasing adoption of AI across India Inc, stretching right up to factory floors.

Of course, Chandra added a caveat: “We must be prepared for more disruption and volatility.” These disruptions may not be pretty to those working in jobs like cashiers, customer care executives, secretaries and administrative assistants, going by a US Bureau of Labor Statistics prediction on jobs that are shrinking the quickest. Or to fresh-in-the-job-market youngsters who find their qualifications already outdated by technology.

Then, there is the threat of misuse. “As the Lok Sabha elections approach, the intricate interplay of AI and deepfakes adds a layer of complexity to the overall system,” warned Ibrahim H. Khatri, CEO and Founder of Privezi Solutions, a Mumbai-based corporate data security and management firm. “Though AI can be a driving force behind effective campaigning and educated voter participation, the improper use of deepfakes can jeopardise the democratic process by increasing the spread of misinformation and manipulation.”

Updating legislation will be crucial, but important legal frameworks in this effort―the Digital India Act and the Data Protection Act―are yet to be fully implemented. The government seems content on passing on the onus to tech companies and social media platforms.

Swipe right

India is on a courtship spree, trying to sew up free trade agreements left, right and centre. The one with the UK, negotiations for which are on its last leg, is crucial for both and could see fruition before the elections are announced. For the UK, it will go a long way in making up for its Brexit misadventure; while for India, it will not just be a nice poll point (many Indians hope it means cheaper Johnnie Walker scotch!), but part of its larger gameplay to counterbalance China’s Regional Comprehensive Economic Partnership (RCEP), which India had refused to join.

However, the UK FTA is just one of the many agreements New Delhi is negotiating. Other ongoing talks include the long-pending ones with the US and the EU, as well as those close to completion like the one with Oman and the four-nation bloc comprising Iceland, Liechtenstein, Norway and Switzerland.

“India aspires for fair, transparent and mutually beneficial agreements that make our businesses competitive, opening new markets for them,” said Piyush Goyal, minister of commerce and industry. “FTAs expand trade and commerce, and accelerate economic growth, thus creating jobs and business opportunities.”

The ground beneath our feet

Through the last one-and-a-half decade, India’s real estate sector was stuttering, wreaked by the global financial meltdown in 2008-2009, demonetisation and RERA. But over the past year or so, the sun has been shining on realty, with some of the biggest value increases since the boom of the early 2000s. And what more, ticket prices are firmly up, with homebuyers with a penchant for premium housing sniffing around for good picks. “We expect projects in the premium and luxury segments (Rs2 crore and above) to continue experiencing healthy growth,” said Anshuman Magazine, chairman & CEO of the real estate consultancy CBRE India, pointing out how sales of high-end flats and villas grew 75 per cent last year. “Affordability is no longer the sole decisive factor for homebuyers, as health and safety, community living, sustainability, and integration of smart home technologies emerge as key factors in home purchase decisions.”

Pie from the sky

India’s space odyssey will hit a pivotal point in 2024 with the unmanned test flight of Gaganyaan. While that will, science willing, be an illustrious high point, the nation’s space progress, especially in the area of space business and startups, notches up way higher than such marquee moments. While XpoSat is already successful and Aditya L1 is set to reach its designated orbit, other high profile rollouts slated for 2024 include the earth observation satellite NISAR, a Venus mission and the second Mars mission.

PTI01_01_2024_000070B New frontiers: ISRO’s PSLV-C58 carrying an X-ray polarimeter satellite and 10 other satellites lifts off from the spaceport of Sriharikota | PTI

Another landmark would be when Airtel’s OneWeb starts its broadband internet from space service. It will be expensive in the beginning, but will help rural and remote areas get access to high-speed communication. Elon Musk’s Starlink and Jeff Bezos’s Project Kuiper are also waiting in the wings to launch similar services in India. “Broadband services will improve further and telecommunication will connect all remote areas, which will further improve mobile telephone, video and data management,” said G. Narahari Dutta, former ISRO deputy director and professor at NITTE Meenakshi Institute of Technology, Bengaluru.

But the proof of the pie will be the fledgling Indian space startups showing use cases and profits. “Early-stage startups continue to make strides and augment their capabilities across upstream and downstream,” said Apurwa Masook, founder & CEO, SpaceFields, a space startup. “India is well positioned with increased cooperation and global partnerships in space amid escalating geopolitical tensions in various regions.”

New year, new energy

Despite COP-28 and the debate over fossil fuels, the fact that a good chunk of India’s energy still comes from coal is unlikely to change in 2024, or in the near future. But that does not mean there isn’t a whiff of change in the air. Last year saw momentum in the adoption of electric vehicles, and that is set to accelerate this year as well. “Despite the reduction in FAME subsidy, India’s EV market has recovered and electric two-wheeler sales are 5 per cent of total two-wheeler sales, with an year-on year growth of 11.5 per cent,” said Anirudh Ravi Narayanan, CEO of BNC Motors, a clean energy two-wheeler startup. “This is an important step because the crutches are coming off the industry. What can help now from the policy side is to provide stability and a long-term view so that the industry can plan accordingly.” Also on his wish list? Enabling battery swapping in the country.

Big brothers

Is a hyper-consolidated business good or bad? 2024 could well point the way for Indian media and Big Tech. For all the television channels, newspapers and magazines and their legacy, two Big Tech entities Alphabet (YouTube and Google) and Meta (Instagram, Facebook and WhatsApp) have a grapple hold of our online lives, and they earned a neat revenue of Rs43,000 crore last year. The will-they-won’t-they merger of Zee with Sony, as well as Disney Star with Reliance (Jio, TV18, Colors, etc), could create two formidable players with heft. What does it mean for the average media & entertainment consumer? The writing’s on the airwaves.

Phoenix rising?

After the nightmare that was 2023, Gautam Adani would be hoping the only way is up in 2024. Hindenburg revelations’ specific casualty was his flagship company’s much-touted follow-on public offer (FPO), through which it was hoping to mop up Rs20,000 crore for its expansion. It had to be called off, as the company faced months of bad press.

That done and the company slowly clawing back up, it seems the good days are back―Adani is reported to be holding a series of roadshows for investors, and with the current bull run, it wouldn’t be a surprise if it decides to revive the FPO. The billion dollar question will be―before or after the polls?

Slumdog trillionaire

Indian economy may or may not hit $5 trillion this year, or surpass Germany and Japan to become the world’s third richest nation, but all agree that it is on a roll, and it is not just the stock markets. Financial year 2024-2025 could see India easily attaining an above 7 per cent GDP growth, reinforcing its position as the fastest growing major economy in the world.

“That is a big positive, particularly in view of the global headwinds,” said Sanjay Kumar, partner, Deloitte India. “Oft-understood reason for this strong sentiment on growth is robust capital investments with widening crowding in of private capital expenditure in related areas. Systemic financial risks are also seen to be declining.”

Kumar does throw in a cautionary note, though: “This, however, needs continued policy support, vigilant supervision and liberal framework to manage emerging vulnerabilities.”

Markets believe the likely return of Modi, for a third term, will be lucky for the economy, with a push for further market-friendly economic reforms likely in the ‘actual’ budget to follow in the summer. Yet, more work is to be done, as Kumar points out: “We need policies focused on promoting high quality job-rich growth, with continued reform in areas of education, health, land, agriculture, and labour markets, including improving equity and inclusion in labour force participation.”