On May 26, 2017, the Narendra Modi-led National Democratic Alliance (NDA) will complete the third and most eventful year so far of its five-year term. The good part is, this hasn’t been a two-steps-forward, one-step-back kind of government. The mammoth is on the move, as it were, warts and all. But for it to charge ahead, relentless implementation would be crucial because most of the repairs and reforms remain work in progress.
Overall, we maintain that the steps taken by the Modi government do not create an immediate and strong upside to growth, but they do improve India’s ability to achieve faster and, importantly, sustainable growth over the medium term.
In our report card last year, we had pointed out that while the Modi government had avoided populism and focussed on steps to raise India’s potential growth rate, there was a risk that it could change course when the political cycle kicked in. So far, there is no evidence of that. Which also means the gains made on the fiscal and monetary fronts over the past three years are unlikely to be reversed.
That also means the gains made on the fiscal and monetary fronts over the past three years are unlikely to be reversed.
Looking ahead, the fourth year of the Modi government has to majorly be about efficient implementation, because the next order of gains will flow from that.
In this report we cover aspects like:
- Taking stock of reforms
- The big picture
- Over to the states now
- Legislative math augurs well for NDA