When the BJP-led NDA stormed to power in 2014, with the BJP getting an absolute majority, not many of its supporters would have predicted the way things would turn out at the fag end of its term. The economy, though not in a shambles, is not in the strong position the Centre would have liked it to be. Though the Prime Minister at a recent Asean-India Summit in Singapore loudly proclaimed that India is the best place to invest, things on the ground are not looking so good.
The pressures on the fiscal and the trade deficit fronts are worrying. The rupee fall has clearly got the Centre rattled. Foreign portfolio investors are leaving the country in droves, though the reason for that is the winding-up of the easy money policy by the US and rising interest rates there.
Though the price of crude has been softening of late it has been rising over the last one year, making life difficult for the Centre as well as for the people.
Double whammy
Narendra Modi came to power with the slogan Sabka Saath, Sabka Vikas , which promised an inclusive development agenda. Modi also promised ‘minimum government and maximum governance’. Though the Modi government did make some efforts towards rolling out an inclusive development agenda — JAM, Mudra loans, Ayushman Bharat — its owns goal of demonetisation seems to have completely nullified those efforts. There’s little doubt now that the note ban hit small businesses and agricultural trade really hard. Given that 90 per cent of the workers are employed in the unorganised sector, demonetisation has had a devastating impact on them, and anecdotal evidence in the media certainly shows that.
The NDA’s implementation of the Goods and Services Tax was another factor that critics blame for stalling the economy, though this tax was on cards for more than a decade and a half. Though its implementation could have been better, the Centre seems to have adopted a policy of ‘learning on the job’, as shown by the constant tinkering of tax rates. And the consensus seems to be that the GST is long-term positive.
The positives
The Modi government can show the rise in FDI and the rapid rise in ‘Ease of Doing Business’ as its major achievements, as also the Insolvency and Bankruptcy Code (IBC) and hastening the resolution of corporate bankruptcies and bank NPAs. But the problem is that, though these achievements would impress economists and foreign investors, they’re unlikely to excite the median voter.
The one issue that will strike a chord with voters is jobs. Here the Centre’s record is not very good, though there are claims and counter claims on this issue. Since we’re still waiting for the government to come out with employment data, it’s hard to take the Centre’s claims seriously. In fact, some commentators have charged the Centre of deliberately delaying the release of jobs data.
The NDA government bet big on the revival of private investments by easing many norms for them, but industry has stubbornly refused to take the bait. Construction and textiles, two of the main job generating sectors, are struggling with a myriad issues. There’s also the note ban factor. The Centre’s recent moves to ease credit for the MSMEs are perhaps a belated attempt to heal the wounds dealt them by the demonetisation sledgehammer.
So, after four-and-half years, even the most objective, unbiased observer would say that the NDA government’s economic record is at best patchy — some hits, many misses. Did Modi live up to his promises or did he promise too much?
Emotive issue
With general elections due next year, the Centre’s unease with its economic record is evident in its attempt to slowly but surely ramp up that crucial emotive issue that is at the heart of the Hindutva agenda — the Ram Temple in Ayodhya.
The UP Chief Minister and other BJP leaders, some of them Cabinet Ministers, have openly started campaigning for building the temple at the disputed site. With the Supreme Court referring this case to a larger bench, which means a verdict is unlikely before the next elections, this issue is going to move to centre-stage in the coming months. How the BJP fares in the upcoming State Assembly elections will be a crucial pointer.
Curiously the Congress Party in recent times seems to playing right into the BJP’s hands, going by Congress President Rahul Gandhi’s temple-hopping spree, which started during the Gujarat elections. Both these parties are working hard to woo the same voter base. The Congress is going all out project its ‘pro-Hindu’ image and adopting a ‘soft Hindutva’ plank where even lip service to secularism and welfare of minorities are abandoned. And therein lies the BJP’s victory. Whether the BJP does well in the upcoming State elections or next year’s general elections, it will still emerge as the victor for having altered the contours of Indian politics for good.