Economic development will remain India’s focus regardless of election outcome

By Tian Guangqiang Source:Global Times Published: 2019/2/25 21:44:02

Illustration: Xia Qing/GT



As India's lower house Lok Sabha elections approach, Devendra Fadnavis, chief minister of Maharashtra, said that if the Bharatiya Janata Party (BJP) loses, India will regress at least 50 years. Of course, Fadnavis was obviously over exaggerating. 

India's current Prime Minister Narendra Modi, a BJP leader, has broad experience in economic development. His reelection could be good news for India and seen as a continued push through current reforms that have sparked economic rejuvenation. 

However, even without Modi, moving the Indian economy forward has been a consensus among the parties and states of the entire country. No matter whether Modi is elected or not, the Indian economy is not affected much.  

The Modi administration has been the most powerful government in several decades since India adopted the multiparty system. With his popularity and competence, Modi has been at the helm of many key national issues. BJP dissenters and opposition from the Indian National Congress (INC) have had a hard time keeping Modi checked and balanced. 

India has a federal system, but with diverse cultures. States have more freedom to decide affairs within their jurisdictions and are less contained by the central government. Local governments have greater say on local matters. Indians care about local business and support local politicians. 

The Indian economy once stood on the edge of crisis around 2012 and 2013 - GDP growth slowed to 5.5 percent in 2012 and 6.4 percent in 2013. Currency depreciation, inflation, and a stock market slump pushed the economy to its most challenging period since 2008. India's fiscal and current account deficits also challenged the government at the time. 

The disappointment was widespread during former Prime Minister Manmohan Singh's tenure amid the economic downturn. To make matters worse, a telecommunications corruption scandal during Singh's term made India desperate for change. 

Since Modi took office, he has pushed through sweeping economic reforms, based on the growth story of Gujarat, his home state. Reform measures implemented by the Modi administration have created a sound environment for the country's economic progress and pushed the country toward rapid development. As a result, India has since become one of the fastest-growing countries in today's global arena. 

However, India's political regime makes it difficult for a stable government, led by Modi, to push ahead reform measures at the local level. Meanwhile, a few problems that have long obstructed India's economic growth, such as backward infrastructure, a low-quality labor force, a cumbersome legal system and a lack of innovative spirit weigh on the pace of Modi's economic reforms.

Unlike previous expectations, optimism on BJP's future at the upcoming 2019 Indian elections is fading. At the beginning of 2018, support for Modi was high, but it has since been in decline. State elections outcomes revealed that mofussil areas, where roughly two-thirds of the voting population resides, are prone to disfavor the BJP. 

According to a Reuters report that cited an India Today poll in January, Modi's chief rival Rahul Gandhi, president of the opposition Indian National Congress party, "has seen his ratings rise from a low of 10 percent two years ago to his all-time high of 34 percent." The report indicates the main challenger's approval ratings are merely 12 percentage points shy of Modi.

This development is closely connected to the Indian people's political psychology. Although they hope the economy will grow at a fast pace, they don't want a government that's too powerful, which might disable the system of checks and balances. Presently, the public might seek the rise of the Indian National Congress to limit the power of Modi's party.

Though there is a strong chance that Modi might clinch an election victory and continue to advance current economic reforms, it is likely the prime minister will not secure a complete success, but will instead be subject to a more balanced system when factoring in the rise of the Congressional party and other opposing parties. Under such circumstances, the Modi administration's economic reform efforts could continue, albeit at a slower pace. 

It doesn't matter if Modi will remain India's prime minister as economic growth should remain the top priority of India's government, which is already the consensus within society. 

Other political parties are likely to tweak Modi's economic policies, but the general direction is expected to remain unchanged. In a word, the election results should not affect India's resolution on pushing for rapid economic growth and moving toward deeper economic reforms. 

The author is an assistant research fellow with the National Institute of International Strategy at the Chinese Academy of Social Sciences. bizopinion@globaltimes.com.cn



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