PM Narendra Modi government not pursuing radical reform: Study

Sep 04 2014, 23:46 IST
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Narendra Modi government inherited a number of challenges, including a slowing economy and weakening energy demand growth. (PTI) Narendra Modi government inherited a number of challenges, including a slowing economy and weakening energy demand growth. (PTI)
SummaryWood Mackenzie: There are some concerns that the government is not capitalising on its mandate for change, and is instead pursuing gradual rather than radical reform.

Expressing concern over Narendra Modi government not capitalising on its mandate for change, Wood Mackenzie said the new government was pursuing gradual rather than radical reforms.

As the government completes 100 days in office, Wood Mackenzie in a note said: "There are some concerns that the government is not capitalising on its mandate for change, and is instead pursuing gradual rather than radical reform."

Progress to date suggests the government's priorities are weighted towards maintaining stability, rather than taking decisive steps in areas such as energy subsidies, it said.

Energy may not be the new government's main priority, but in a country where the working age population will swell by 200 million people over the next 15 years, population size is the key risk to India's long term energy demand, said Wood Mackenzie, a global leader in commercial intelligence for the energy, metals and mining industries.

Small changes to metrics such as electricity demand per capita could have a huge aggregate effect. "Wood Mackenzie believes that if successful reform can be delivered, an enormous upside demand impact could be the result," the note said.

The new government inherited a number of challenges, including a slowing economy and weakening energy demand growth.

"Over the first 100 days, some progress has been made. Control of India's coal, power, mining and renewables industries has been consolidated, which should help to accelerate reform," it said.

The government's aims, it said are ambitious, and if reached, would imply a dramatic upside to India's long-term energy demand.

"In his previous role as Chief Minister of Gujarat, one of Modi's key achievements was the provision of reliable electricity supply. Modi plans to deliver this for India as a whole.

"If this were achieved, the country would need 500 terrawatt hours (TWh) of additional power supply by 2030 – approximately the total electricity demand of South Korea in 2010," it said.

It said Modi inherited structural problems in the energy sector and slowing economy.

"On the campaign trail, Modi pitched a reform agenda, and promised to restore growth to India.

"In recent years, India's growth in per capita energy demand has stagnated – a disappointing trend in a country where a sizeable proportion of the population has limited access to anything but traditional fuels," it added.

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