Home >Politics >Policy >As Narendra Modi govt enters its fourth year, here’s what it needs to focus on

New Delhi: If his party’s recent showing in state elections, especially in India’s most populous state, Uttar Pradesh, is any indication, Prime Minister Narendra Modi is as popular, if not more, than he was when the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) swept parliamentary polls in 2014 with a clear majority.

The BJP, as MintAsia pointed out in March, is now the dominant force in national politics, with 25.4% of all elected lawmakers, the first time the party’s share has overtaken the Congress’s.

For the record, given India’s size and diversity, parties other than the BJP and Congress still account for a little over half of all elected lawmakers.

And if Modi’s ability to sell even hard ideas such as demonetisation—the exact and immediate economic benefits of scrapping all old high-value denomination notes in one swoop are still unclear—is any indication, Modi has the political capital and communication skills to effect the kind of radical change he has consistently maintained he wants to.

In mid-May, at a key meeting of finance ministers (of the states and the Union), India cleared the decks for the implementation of a Goods and Services Tax (GST) from 1 July.

The new indirect tax regime, while not as simple and uniform as it was expected to be when first conceived by a previous government, will still unify a country with multiple tax rates into one market and, according to several estimates doing the rounds, boost the economy by anything between 1 and 2 percentage points. Exports are up, the government’s much-vaunted Make in India programme that seeks to encourage local manufacturing is beginning to take off (MintAsia pointed out last week that “the number and value of industrial projects being set up in the country, foreign direct investment, and merchandise exports" are all up), and the country’s macro-economic indicators look good.

Despite doubts about the numbers, India remains the fastest growing large economy in the world.

India now has a bankruptcy code, a new law to deal with the problem of bad loans that is plaguing its banking system, and has embarked on a drive to create affordable housing that could “unleash a $1.3 trillion wave of investment in housing over the next seven years", according to a Bloomberg report based on research by CLSA India Pvt. Ltd.

The cascading benefits of a construction boom are well known. Indeed, one of the contributing factors of the sharp economic expansion India saw in the mid-2000s was growth in the real estate and construction sector.

The stock markets are at record highs, and stocks of companies that operate in the so-called consumer economy are the most expensive they have ever been, reflecting a revival in consumption (and, consequently, that part of the whole India story).

Finally, the BJP-led government has, at least so far, avoided getting entangled in corruption controversies of the sort that effectively crippled the previous United Progressive Alliance (UPA) government.

Three years on, that’s a bit, and if I were to hazard a prediction on the 2019 parliamentary elections on the basis of the above, there would seem to be no alternative to the BJP and, within the party, to Modi. That’s the good part.

India’s biggest problem, especially given its demographic profile, is jobs, rather the lack of them. It’s clear that the country’s economic growth hasn’t managed to create jobs for everyone entering the workforce (estimates range from 12 million to 18 million).

The government is keenly aware of this.

Mint recently reported that the government was creating a group to improve the quality and availability of jobs data (there’s little reliable data on jobs), but, at a time when automation and Artificial Intelligence (AI) threaten to shrink the number of jobs in several sectors (information technology services, where this has already started happening, is a case in point, although there are other reasons why jobs are being lost in that business), creating jobs, especially in the volume that India needs, will not be easy.

Based on its performance over the past three years, the government has not displayed the kind of progressive thinking it has shown in its economic policies in important areas such as education and health. Both are critical to India’s growth and ability to realize its true potential.

The government has also displayed a tendency to micro-manage things, and that isn’t in keeping with an administration that promised “minimum government, maximum governance".

The BJP’s dominance of national politics also seems to have encouraged a wave of majoritarianism that has no place in India’s pluralistic society.

Nor does it have any place in a society that believes in modernity and scientific thought.

The government hasn’t always sent out a clear message on this, emboldening what it claims are “fringe elements".

And while no one can argue with efforts to regulate civil society groups and non-governmental organizations that are violating laws, the government’s crackdown on them does come across as too sweeping at times.

I have previously written—in fact, more than once—that India is a complex country that has to deal with first-generation (sanitation and health, for instance), second-generation (infrastructure and industry), and third- generation (renewables, environment, data protection and privacy) problems at the same time. Many of these are issues that require expert inputs and merit debate.

That isn’t possible in an environment where every issue becomes polarized along pro- and anti-Modi lines—and both the supporters and critics of the Prime Minister are responsible for this.

All governments would do well to listen to their critics. As it begins the fourth year of its term, and with its return to power in 2019 all but certain, the NDA would, too.

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