Four years of Modi government: Narendra Modi, the three-term chief minister of Gujarat, won the biggest election in India’s history on his Gujarat model which was of development, job creation, and ease of doing business. After taking over the Prime Minister’s Office in 2014, Narendra Modi shared his vision to make India an investor-friendly destination, which would subsequently lead to job creation and development. However, despite ambitious plans like Make in India, Narendra Modi, four years later, is poised to miss some targets.
Here are four targets Narendra Modi is poised to miss:
Business Sentiments: Narendra Modi has tried to sell India as an investor-friendly destination on many global platforms such as World Economic Forum. The chorus got supported by a massive 30 rank jump in World Bank’s Ease of Doing Business and Moody’s rating upgrade. However, a Crisil report shows that there has been no decisive uptick in business sentiment in the country. Based on the business confidence indices of the RBI, NCAER, CII, and FICCI, Crisil said that business sentiment has largely been optimistic since fiscal 2015, but range-bound. “Confidence slumped on account of weak domestic and international demand, demonetisation, and GST implementation,” Crisil said.
Job Creation: Narendra Modi in one of his election rallies promised to create 10 crore jobs every year but so far it has been an “uphill job”. There is no robust way to assess the progress on this front due to the paucity of reliable statistics and often-conflicting interpretations. However, whatever data are available reflect that job creation has not been impressive. “No doubt, India’s economy is growing, but there’s little conclusive evidence to show employment, too, is growing apace. Data available actually suggests a lag,” Crisil said.
Make in India: Launched in September 2014, Make in India has been the most celebrated and ambitious pet project of Narendra Modi. The government had set a target of raising manufacturing’s share in GDP to 25% by 2022. However, so far the share has only increased 80 basis points since its launch. “Achieving 25% share is indeed an arduous task – which is made more difficult by the fact that global environment will not stay benign to grow exports in the medium-run,” Crisil said.
Private Investment: Four years after taking over the reins, and despite a plethora of facilitation and reforms, the NDA government has not been able to decisively push the investment cycle. “The investment rate did show a marginal improvement in the last two fiscals – after declining to a low of 30.3% in fiscal 2016 – but it is not yet robust and broad-based,” Crisil said in the report. So far, even a pickup in foreign direct investment hasn’t helped kickstart the private investment cycle.
Many of the repairs and reforms initiated by the Narendra Modi government continue to be “work in progress” and need relentless execution focus.