Modi facing urgent economic challenges

Published
12
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

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Referendum talk
Updated 14 Nov, 2026

Referendum talk

Unless the PPP is deliberately using Sindh as a bargaining chip, it should issue a clarification with a clear, consistent position on new administrative units, not one tailored to protect its home turf.
Mineral wealth
Updated 14 Nov, 2026

Mineral wealth

Minerals should not be presented as a solution to Pakistan’s long-term economic difficulties. The aim should be to build an industrial base rather than export raw materials.
Late diagnosis
14 Nov, 2026

Late diagnosis

AS we mark World Diabetes Day today, Pakistan faces a troubling question: how many people are living with diabetes...
Climate challenges
Updated 13 Nov, 2026

Climate challenges

Pakistan cannot afford to confront its climate crises one disaster, one season and one international summit at a time.
Under fire
Updated 13 Nov, 2026

Under fire

KP police are increasingly vulnerable as they play a frontline role in ongoing operations against terrorists.
Used car imports
13 Nov, 2026

Used car imports

THE government’s effort to restrict used car imports appears to be faltering. So suggest the numbers. Despite...