Modi facing urgent economic challenges

Published May 25, 2019
Modi made big promises during the campaign for the weeks-long vote. — AFP/File
Modi made big promises during the campaign for the weeks-long vote. — AFP/File

NEW DELHI: Dissatisfaction with lagging economy didn’t deter Indian voters from handing Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) a landslide parliamentary election victory.

Now, they’ll be expecting something in return: faster, bolder action on long-promised reforms to transform the economy and improve the lives of 1.3 billion people.

Modi made big promises during the campaign for the weeks-long vote, viewed by many as a referendum on his first five-year term, which began in 2014. His election manifesto included a pledge to double farmers’ incomes and provide lavish aid to rural areas.

He also vowed to make India the world’s third-largest economy by 2030 and to spend more than $1.4 trillion to quadruple the country’s annual budget on improved infrastructure.

Such promises rang hollow for many unhappy with the country’s 6.1 per cent unemployment rate, the highest in decades; slow progress on modernising railways and other infrastructure; streamlining India’s byzantine bureaucracy and other initiatives that helped him win office in the first place.

But voters gave him the benefit of the doubt. With most of the estimated 600 million votes counted by early Friday, Election Commission data showed Modi’s BJP winning 287 out of the 525 seats in the Lok Sabha, India’s lower house of Parliament, well beyond the simple majority to form a government.

The economy may well get at least a short-term boost from the incumbent alliance’s strong showing in the election. The benchmark Sensex index surged briefly to a record high, over 40,000.

That infusion of confidence could help drive increases in foreign and domestic investment, Priyanka Kishore of Oxford Economics said in a post-election analysis.

However, she said, “from a long-run perspective, the focus is likely to shift back to Modi’s economic and reform agenda, once the euphoria gives way to more pragmatic assessments of India’s economic situation.”

While campaigning, Modi countered opposition criticism over suicides among farmers hit hard by low crop prices by focusing on wooing members of the Hindu majority with a nationalist pitch and playing up his strong stance toward India’s nuclear-armed archrival, neighboring Pakistan.

“My sense is that the BJP was effective in keeping macro issues about the economy, such as unemployment or growth rates, outside the narrative of this election campaign. It was partly able to do so by leaning on emotive issues such as national security and Hindu nationalism,” said Assistant Professor at the University of Notre Dame Nikhil Menon.

In the meantime, Modi’s party could point to highly visible initiatives such as his Clean India program, a massive effort to build toilets in towns and villages to help stop open-air defecation.

Ajay Batt, a businessman in Delhi, said he was convinced.

“This slow-down can be a temporary thing, but people think about the country’s security. Country is first. I am sure he (Modi) will improve the economy in the next five years,” said Batt, who said he voted for Modi.

Published in Dawn, May 25th, 2019


Police & prosecution
16 Jan 2021

Police & prosecution

Yasin Malik’s case is a revealing example of Modi’s political vendetta.
Changes in privacy policy
16 Jan 2021

Changes in privacy policy

It is indeed a blunder by WhatsApp to move towards a model that is less private than before.
A national dialogue?
15 Jan 2021

A national dialogue?

Fundamental reforms are needed to change the ‘system of spoils’, not save it.


16 Jan 2021

Gas liberalisation

AFTER drawing much criticism from both consumers and the opposition over its mismanagement of the energy sector that...
16 Jan 2021

Osama Satti inquiry

THE findings of the judicial inquiry into the Jan 2 killing of 21-year-old Osama Satti in Islamabad merely confirms...
Updated 16 Jan 2021

British MP on IHK

DESPITE sustained efforts by New Delhi’s rulers to remove India-held Kashmir from the global discourse, people of...
Updated 15 Jan 2021

Trump’s impeachment

The impeachment move may well remain symbolic in nature; even then, the symbolism itself is a potent one.
15 Jan 2021

Economic growth

MOODY’S Investors Service expects Pakistan’s economy to grow by a modest 1.5pc in FY2021, much higher than the...
15 Jan 2021

Madressah students

GETTING students of madressahs involved in politics is a bad idea, primarily because seminarians should be...