Second term blues
Being re-elected as PM means that Modi will be acutely aware that he has to hit the ground running
The electoral exercise is over, as epoch-creating as the results that gifted a huge win to Narendra Modi and an unprecedented second majority for the Bharatiya Janata Party (BJP) and its allies. But the re-elected Prime Minister knows quite well that he will have no honeymoon period this time and even first-time ministers in his Council will have their work cut out from Day 1.
This newspaper has highlighted several of the challenges that face this nation and the new government but thankfully Modi’s first administration did much of the groundwork for its second term. Some of it were the much-needed repairs in the public banking sector which was devastated by the rampant crony-capitalism of the UPA2 government. This means that India should be poised for the high levels of economic growth that it needs for creating the tens of millions of new jobs that will be expected in the coming five years. Then there is the issue of ameliorating farm distress and reshaping the contours of the agricultural economy. In fact, agrarian reforms could very well present Modi his next stand-out opportunity. Scalable and realistic growth targets should be the focus than what is predicted or expected and infrastructural push should now focus on last-mile completions. However, Modi will be aware that India will face challenges not of its own making on the economic front with Donald Trump and his administration playing a huge spoiler. While India could potentially benefit from the US-China trade war and move beyond a nation of screwdriver operators to proper manufacturing, which will also aid India’s burgeoning trade deficit with China, Trump’s gaze could easily shift towards India as well. He has already stated that the terms of trade between India and the US must change, so much so that he sent his Commerce Secretary to India in the middle of the general elections. That said, Wilbur Ross, the American trade czar, is at least a believer in the India story. Trump’s issues with Iran too will have an adverse impact on the price of oil for India. The potential of a war with Iran, which cannot be ruled out, will give both North and South Block palpitations. Then there is that eternal question for Indian Prime Ministers, ‘What to do with Pakistan?’ Modi changed the game with the Balakot strikes but what now? What role will China play as it becomes Pakistan’s economic overlord? The India-Pakistan equation gets more complex every passing year and Modi will have to deal with it, whether he or his Cabinet likes it or not. And for the time being, the “no terror” clause for talks is at least compelling a change in status quo. Modi fought and won a hard election but he knows that was the easy part, running the country again and leading it towards economic prosperity and peace is the tough job.