Reviving India’s economy will not be easy
The BJP’s thumping victory in the Indian election was a demonstration of popular dissatisfaction across the country’s fractured polity about the regression of what was once known as “shining India”. Even more significant is that the party led by Narendra Modi will be able to govern without needing the support of other parties – the first time this has happened in 30 years.
A majority mandate gives hope of a stable government, paving the way for bold and decisive policy reforms. Unlike his predecessors, Mr Modi will not have to deal with unruly coalition partners as he implements those policies. A stable government with clear majority will also boost the confidence of industry and foreign investors.
This election was clearly a referendum on the economy. Manmohan Singh had launched reforms in 1991, when he was finance minister, that opened India’s socialist economy to the world. But his 10 years in office as prime minister was marred by corruption scandals and sluggish growth amid mounting policy paralysis.
The value of the rupee fell to a record low, while unprecedented food-price inflation took a toll on the poor and widened inequalities in an already unequal society. This explains why the desire for change was so great that even a dark chapter of communal violence that took place under Mr Modi’s watch in Gujarat, as well as his Hindu-centric politics, did not dissuade a broad swathe of voters from supporting him.
Voters saw in him a champion of economic progress. That’s because as chief minister of Gujarat, he oversaw a development boom lasting more than a decade. Gujarat’s highways are India’s fastest, its ports are among the busiest and its industry is robust.
Mr Modi has promised to do the same for India in general. But doing so involves significant challenges in a country that has a complex federal structure and a civil service that’s known for its bureaucratic controls rather than reform.
Even then, reviving an economy of India’s size and complexity will not be quick. Some reforms, once introduced, will take many years before their full benefit is realised.
Despite the prominence of voters’ economic concerns, the BJP also needs to use its majority wisely and inclusively, governing for all Indians rather than just the Hindu majority that is the party’s base. Voters have put their faith in Mr Modi and the BJP and the next five years will show if that trust is justified.
Published: May 17, 2014 04:00 AM