In many ways, 2025 can be called a watershed year. Several long-held orthodoxies have collapsed. A rule-based global order — governing trade, war, alliances, and policy predictability — has weakened sharply. In its place has emerged a world driven by naked military and economic power: Transactional, narrowly self-interested, and fundamentally zero-sum in outlook.
This shift has been rapid. It is unfolding alongside dramatic advances in artificial intelligence and technology, intensifying sustainability challenges, and accelerating demographic change. These forces together compel all countries to reassess their economic strategies, institutional frameworks, and global alliances. India is no exception.
I ask that we revisit four old but powerful ideas — not ideological novelties, but pragmatic reforms rooted in efficiency, governance, and basic morality. These are: Converting all subsidies into direct benefit transfers (DBT), consolidating public sector ownership under a government holding company, decisively fixing power distribution companies, and ensuring the pending cases in our judiciary are cleared rapidly.
Convert all subsidies into DBT: India operates a maze of inefficient and distortionary subsidies. These include fertilizer subsidies, minimum support prices (MSP), free power, free water, and various forms of job guarantees. Officially, subsidies account for around 3.5% of GDP. But if we did honest accounting the true cost probably approaches 7% of GDP.
The fertiliser, or rather urea subsidy, has encouraged urea overuse and degraded soil quality. Free power and water for agriculture have contributed to severe groundwater depletion. Together with MSP, this has held back improvements in agricultural productivity, highlighted often by economist Ashok Gulati. These subsidies are not only fiscally expensive but also environmentally destructive.
If subsidies amount to roughly 7% of GDP in a $4.1 trillion economy, this translates to nearly $300 billion annually. Instead of distributing this money inefficiently, imagine transferring it directly to households. Think 150 million Indian households — about half of all households — could each receive roughly $2,000 per year, or about 1.8 lakh.
This approach would dramatically reduce leakage, eliminate distortions, and allow households to decide the best use of their income. To make this credible, it must be backed by an enforceable, all-party agreement prohibiting any individual voter from receiving subsidies or freebies outside the DBT framework. Without such political discipline, reform will fail.
PSU consolidation under a government holding company: Industrial policy has returned globally, and India should learn from countries that have implemented it effectively. Singapore’s Temasek offers a compelling model: A government-owned holding company that manages commercial assets independently, professionally, and at arm’s length from political ministries.
India should consider creating a similar government holding company and transferring ownership of all central public sector enterprises (CPSEs) into it. This would improve governance by separating ownership from regulation. Today, ministries both regulate sectors and own firms within them — an obvious conflict of interest. Think steel ministry, coal ministry, petroleum ministry, among others. This structure undermines competition, accountability, and efficiency.
A holding company would enable a serious national debate on strategic sectors. In which industries does India need a domestic manufacturing presence to avoid long-term vulnerability? For example, defence, capital machinery, and green technologies.
The government’s role should be to incubate, take early risks, and build capabilities where private capital is hesitant — without micromanaging operations. Equally important are clear exit principles: When should the State withdraw, how much should it divest, and through what mechanisms? Listing norms, oversight structures, and sunset clauses must be defined upfront.
This model would be far superior to the current fragmented and politicised ownership structure.
fix discoms: If AI is the defining technology of the future, then power and compute capacity are its true foundations. Algorithms attract attention, but electricity enables everything.
The US has an installed power capacity of about 1,230 GW, China around 3,350 GW, and India roughly 462 GW. Renewable energy (excluding hydro) accounts for 24% in the US, 42% in China, and 35% in India. Including hydro pushes China and India above 50%. Having plentiful power capacity will become a strategic necessity. Already, in the US, data centers consume about 5% of total electricity — a share that will inevitably rise, as will it in India too.
Against this backdrop, India’s distribution companies are facing a crippling weakness. Their cumulative losses amount to nearly 7 lakh crore, or around $80 billion. Without fixing discoms, India cannot power its AI ambitions.
There are workable solutions. The Odisha model demonstrates the potential of public-private partnerships with majority private ownership. Mumbai shows how multiple suppliers can operate over common distribution lines. Cost-reflective tariffs, timely orders from state regulators, elimination of cross-subsidisation, and provision of subsidies only through a transparent DBT is essential. We need also to invest and start experimenting with nuclear fusion like the USA and China — cheaper and much less radioactive waste than fission. India’s future competitiveness depends on reliable, financially viable power distribution.
Speed of judicial redress:For a properly functioning market, contract enforcement is essential. Currently, our courts do not provide this. The axiom justice delayed is justice denied is the norm in India. Most civil cases last long years. The most egregious failure of our justice system is in respect of our prisons. Out of approximately 573,000 prisoners in India, over 70% — around 430,000 — are undertrials. Many have spent more than 18 months in jail. Some have already served the maximum sentence they would have received if convicted. This is a profound moral failure. Detention without timely trial erodes faith in the rule of law and violates the spirit of our Constitution. More broadly the need for a faster functioning judiciary needs to be the pillar of a modern India. It gets little actionable focus.
These four ideas are not new. They are old but evergreen ideas. Together, they offer a practical roadmap for a stronger, fairer, and more resilient India in an uncertain world.
Janmejaya Sinha is chairman, BCG India. The views expressed are personal
