“India grows at night.” The popular argument, first posited by writer Gucharan Das, holds that true expansion in the country’s economy occurs while the bureaucrats in New Delhi sleep.

 

In the decades following India’s 1947 independence, the country’s economy was beholden to the “license raj,” a byzantine system of rules and regulations that made operating a private business a punishing bureaucratic exercise.

 

But an interesting trend emerged in the 1990s as new technologies seeped into the subcontinent. Entrepreneurs found a refreshing degree of operational freedom in the digital realm. The government at first did not understand the technological transition, so it could hardly regulate it. And while the bureaucrats slept, India’s new economy took root. The country’s digital rise may not have been intuitive—India is a decidedly labor-intensive country developing a specialization in a capital-intensive sector—but it has been effective, helping the country average more than seven-percent growth annually over the last ten years, right through the thick of the global economic recession.

 

Critically, as digital India expanded, the government moved away from the overregulation of the license raj. In conjunction with broader reforms to cut red tape—efforts which began in earnest in 1991—New Delhi chose to embrace digital technology by viewing it as a tool to modernize its workforce, to boost economic programs in the outer reaches of a deeply undeveloped country, and to help rein in economic corruption.

 

In a nation in which more than 30 percent of the rural population is considered illiterate and hundreds of millions lack an internet connection, the government bet heavily on the value of digital technology.

 

New Delhi would not be asleep for this ride. It would be steering the train.

 

Both India’s growth and reform momentum have accelerated since the 2014 election of Narendra Modi as Prime Minister. Mr. Modi is not your average PM – he is energetic, pursuing an intense travel schedule; he is unorthodox, with aggressive strategies like demonetization, and he has an eccentric side, for example wearing a suit with his names stitched on it over and over again when he met then-US President Barack Obama in 2015.

 

So what does the old guard think of this new approach? While working on The Crossroads India documentary, I interviewed the legendary economist Dr. Jagdish Bhagwati for his thoughts on Modi and India’s growth momentum. Simply click on the video at the top of this post to hear what he has to say.