The first test
This week will bring the first of several tests the Narendra Modi government will face in 2018. The prime minister has stated in the run-up to the Union budget, which is to be presented on Thursday, that it will not be populist in nature—that the common man wants honest governance, not freebies and sops.
It is an admirable sentiment, but parlaying it into policy is another matter. The Bharatiya Janata Party (BJP) may have won the Gujarat state polls last month, but the distribution of votes made it clear that rural distress ought to be a concern for the government going into eight state polls this year and the general election in 2019.
Addressing this will mean dealing with an impossible trinity of fiscal goals, as this newspaper has noted before—simultaneously keeping farm prices high, retail food prices low and the fiscal deficit under control.
The fact that growth continues to remain below potential and private investment weak adds further pressure. Finance minister Arun Jaitley will not have an easy time walking the Modi line.