As Narendra Modi completes his first year in office as the Prime Minister of India, he seems to have scored decently on a few aspects, while the major roadblocks faced by the economy still remain. One of them is his popularity among the non-resident Indian (NRI) community as well as the Indian population. Other aspect in which Modi’s governance seems to have done well is the image building exercise to make the Indian economy appear stable to attract foreign investment. The improvement in India’s outlook by rating agency Moody from ‘stable’ to ‘positive’ is being considered a welcome trend. It shows that the economic parameters in India related to tax policies have improved. However, Moody continued to maintain India’s credit rating at ‘Baa3’ for investments, which is just above junk grade.
Modi praised the proactive, and policy-driven governance of his administration in an open letter. He wrote that at the time when he assumed office as Prime Minister of India, the image and confidence in the economy was declining. He claims that the previous government was under policy paralysis due to indecisiveness, and was plagued by rampant corruption and scams. He wrote that the continuous rise in economic insecurity and inflation had left common people of India completely helpless.
Modi’s letter was published on a website which listed his political party’s achievements after being in the office for one year. His letter went on to suggest that the moment he took charge at the top office, the out of control prices because of the double-digit food inflation was curbed effectively. Modi explained in his letter, how his administration addressed these challenges systematically. He also gave a detailed explanation about how he is working with his group of ministers to build a stable, and rejuvenated Indian economy.
Most of the market indicators show that it has been a good year for the Indian economy so far. As India imports most of the oil, a drop in prices has helped Modi government reduce oil subsidies, and cut down fiscal deficit to 4 percent of the GDP. According to the Governor of the Reserve Bank of India, Raghuram Rajan, the present government has worked towards improving the economic environment of the country. This has helped attract foreign and domestic investment. Since Modi took office, the Bombay Stock Exchange Index has jumped close to 12 percent.
Modi still enjoys a massive approval rating in India. However, there seems to be a major difference in metros, and the non-metropolitan and rural areas of the country. As Modi completes his first year in office as the Prime Minister of India, he seems to have scored decently on certain aspects, while the major roadblocks faced by the economy still remain. The popular belief among the Indian masses about Modi’s governance seems to be fractured as many are now citing it as anti-poor. At another level, he is being praised for boosting foreign investment, and cutting down the amount of red tape along with taking action against the infamous bureaucracy lethargy in the country.
Many critics have accused Modi government of failing to work on a long-term economic policy, and merely indulging in hyperbole. They are saying that the present Indian government talks about introducing big policy reforms for dealing with issues like black money, fund availability to major banks, and farmers as well as poor sections of the society. However, there has been no actual change in reality. Adding to that feeling of disenchantment, is the much controversial and criticized land acquisition bill, which has been branded as a symbol of crony capitalism in the country. Modi has tried to clear his government’s stand, and commitment to the marginalized sections of the population as his letter talks about schemes for farmers and laborers. Thus, as Modi completes his first year in office as the Prime Minister of India, he seems to have scored decently on a few aspects, while the major roadblocks faced by the economy still remain.
By Ankur Sinha
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