A Hard Slog Ahead

What should be the government’s economic agenda for the first 100 days?

- Ashish Gupta

“ALL POLITICIANS SHOULD have three hats— one for throwing into the ring, one for talking through, and one for pulling rabbits out of it if elected.”

American writer Carl August Sandburg’s famous lines could well have been written for Indian Prime Minister Narendra Modi as he gears up for another five years of government. Now that the Bharatiya Janata Party leader has been elected for a second time, he will need to wear his third hat to pull out all the rabbits he can to fix the country’s economic problems.

Sure, Modi has won by a bigger margin this time: His party has 303 of 543 elected members in the Lok Sabha, more than the 282 in 2014. Stock markets were delighted with his win, but the real slog begins now because the country’s economic woes have not only multiplied but become more complex in these five years. GDP growth has fallen to 6.8% in FY19 from 8.2% in FY17 because of a consumption slowdown amid an agricultural crisis and a shortage of jobs. To add to these problems is a liquidity problem that threatens to derail many non-banking financial companies (NBFCs) and housing finance companies following the IL&FS crisis.