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Modi, India reformists face major test with budget unveiling

India's manufacturing sector has been targeted for support by Prime Minister Narendra Modi. Modi unveils his government's first full-year budget plan on Feb. 28, and believes manufacturing will provide jobs and stability for India's growing-while-fragile economy. Photo: Reuters via bbc.com

India’s manufacturing sector has been targeted for expansion by Prime Minister Narendra Modi. Modi unveils his government’s first full-year budget plan on Feb. 28, and believes manufacturing will provide jobs and stability for India’s growing-while-fragile economy. Photo: Reuters via bbc.com

Tired of corruption and stagnation, India voted the reform-minded Bharatiya Janata Party (BJP) into power in May 2014. Its leader and current prime minister Narendra Modi has promised sweeping economic policy changes to prolong growth and create jobs for India’s burgeoning population of about 1.25 billion (almost half of whom are under 25, and 2/3 of whom live on $1.50 a day or less).

On Feb. 28 Modi is set to release details about his first full-year budget. Many view this announcement, and how it is received, as a vital litmus test for Modi’s leadership and just how far removed from traditional economic structure he is willing to go.

Modi has been pushing development of India’s manufacturing industry, though critics claim so far he has done a lot of talking but instituted little real change. Taking on India’s restrictive labor laws, upgrading the country’s faltering infrastructure, or privatizing large government-owned operations such as Coal India would be bold moves, but likely have meaningful results.

But BJP has made some steps in the right direction. It has proposed changes to national taxes and making land acquisition easier for businesses, despite stiff opposition. Although it is unclear if parliament will sign off to put new laws in place.

While India has been able to maintain growth while its peers — Brazil, Russia and China — have stumbled, its ability to keep it going is questionable. But perhaps Modi’s break-with-the-past approach is what’s called for. India’s government would be wise to seriously consider BJP’s ideas, even if they face significant opposition. Anything that has the potential to reduce the debilitating poverty faced by the majority of India’s population needs to be looked at. Giving credence to a new or different perspective may foster a solution these people desperately need. After all, for them it’s hard to imagine how things could get much worse.

 

Author

Scott Bleiweis
Scott Bleiweis

Scott Bleiweis writes on international relations topics for FPA. He has a M.A. in democracy studies and conflict resolution from the University of Denver, and a B.A. in Politics/International Studies from Brandeis University. Scott was formerly a Fulbright education scholar in Bulgaria (views in this blog are his own, and do not represent those of the Fulbright organization or U.S. government).

Scott supports Winston Churchill's characterization of the complex form of government known as democracy: “Many forms of Government have been tried and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.”

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