Beyond 2024: What Modi's Third Term Could Mean For India's Future
Yes, the BJP failed to win an absolute majority on its own but it is still by far the single largest party
Coinciding with a scorching summer, this year’s two month long Lok Sabha elections finally ended on 4 June. Despite all the setbacks that his party received, Prime Minister Modi re-emerged as head of the NDA, a coalition that has ruled India for the last ten years and will continue to do so for the for the next five.
The real unsung hero of the elections though was the Election Commission of India. Very few of us fully appreciate the complexity involved in the exercise which it undertook. Elections took place across 28 states and eight union territories. Out of 990 million registered voters, 642 million voters actually voted in 10.5 million polling booths. The Commission took the help of 15 million Central and state government officials.
That it was able to conduct this vast exercise seamlessly is a solid tribute to its organisational abilities. As someone who has assisted the Commission as an observer on a number of occasions and knows how it works, I am sad that people continue to cast all kinds of aspersions upon its functioning without a shred of evidence.
Now that the dust has settled, we can objectively assess the results of the elections. Yes, the BJP failed to win an absolute majority on its own but it is still by far the single largest party. Its final tally of 240 seats is greater than that of the alliance ranged against it and also two and half times that of its nearest rival. Even so, there is much for it to introspect about. At the end of the day it failed to meet its own high standards.
What can we expect from Modi 3.0? On the positive side, since the earlier ruling coalition has returned back to power, we will see continuity of policy and stable governance for the next five years. Ridham Desai of Morgan Stanley thinks that with reduced numbers to support him, Prime Minister Modi will press the accelerator on supply side reforms - mainly measures designed to promote ease of doing business, bureaucratic efficiency and further rationalisation of GST and income tax. The government will go all out to increase public outlays on capital expenditure so as to crowd in private investment. It would also aim at increasing, as early as possible, the share of the manufacturing sector of the economy from its current level of 17 per cent to 25 per cent (the level ordinarily expected from an economy of India’s size).
Overall the plan appears to be to increase investment, industrial capacity and production to create more jobs - especially for coping with the influx of migrants from rural to urban areas. This is necessary because agriculture appears to be stagnating; on account of poor rains last year, it increased by only 0.1 per cent, even as GDP for the economy as a whole grew by 8.2 per cent. Stagnation in agricultural output has created pockets of rural distress. This has proved costly for the party. The new government’s immediate challenge is twofold: the first is to make this sector more productive. It intends to achieve this objective inter alia through farmer producer organisations (FPOs). Secondly, it wants to facilitate smooth movement of population from agriculture to the more productive industrial and services sectors of the economy.
Therefore, expect more employment generation during the next five years in the latter two sectors of the economy. Most of the new jobs, however, would not be nine to five permanent jobs with guaranteed lifelong employment and assured pension. Instead expect more opportunities for gig workers and contract employees, with many people opting for self-employment and entrepreneurship.
The Government will continue to support the poor and the vulnerable through its social policies. Its first act was to announce the construction of 30 million additional houses for the poor during the next five years under its Pradhan Mantri Awas Yojana Scheme (PMAY).
By the end of FY28, the government would like India to emerge as the third largest economy in the world with a GDP of USD five trillion, a consistent annual growth rate of seven to eight per cent, an inflation rate of about four to six per cent, and continuous consolidation of the fiscal deficit along a declining slide path. Hopefully, if it is allowed to, it would also attempt to build a consensus across the aisle on foreign policy, security and defence.
These are ambitious objectives. But if the past is any indicator, expect the new government to put its best foot forward and obtain full support from its ally, TDP head Chandrababu Naidu - a reformer with impeccable credentials.
(The writer was Chief Commissioner of Income-tax and is the author of the Moral Compass- Finding Balance and Purpose in an Imperfect World, Harper Collins India, 2022)
