Business Daily Media

Business Marketing

.

why Modi may now need to switch his economic ambitions to new businesses and small firms

  • Written by Jagannadha Pawan Tamvada, Professor, Kingston University

India looks set to return Narendra Modi[1] as prime minister for a third term. But not in the way that he might have wished – or expected.

Modi had hoped to win 400 of the 543 seats available in the Indian parliament. Yet as hundreds of millions of votes were counted, it emerged that his party would need the support of its partners in the National Democratic Alliance to lead a majority government.

This was after a multiparty political group of 36 opposition parties, the Indian National Developmental Inclusive Alliance (forming the acronym INDIA), and formed specifically to take on Modi[2], had made unexpected gains.

Remaining defiant, Modi said[3] on June 4 2024: “Today is a glorious day,” adding: “This is a victory for the world’s largest democracy.”

The results of the election surprised pollsters and experts around the world. And much is now being made of their impact on Modi’s political power and personal brand.

Yet a third term as prime minister could still be considered a remarkable success. Only one previous Indian prime minister, Jawaharlal Nehru, has achieved[4] the same electoral feat.

Much of the support Modi did receive will have been fuelled by a dramatic economic transformation[5] in India. The nation now aspires to become a developed country – one with a relatively high level of economic growth and security – by 2047[6], exactly 100 years after independence.

That economic progress is clear to see across the country. There has been significant modernisation of infrastructure[7] and an exponential increase in foreign investment[8]. The country boasts a vibrant start-up ecosystem[9] and targeted welfare schemes that are dramatically reducing poverty[10].

These changes have already pushed India into becoming the fifth largest economy[11] in the world, up from 11th[12] ten years ago. It could soon rank third[13], surpassing Japan and Germany.

India is also the fastest growing[14] in the G20 group of the world’s leading economies with a current growth rate estimated at 8.2%[15]. Inflation, too, is much lower than it used to be, and was lower than UK’s inflation rate[16] between 2021 and 2023.

There are still big problems with rising inequality[17] and unemployment[18]. And prominent Indian economists, including the former governor of the Reserve Bank of India, Professor Raghuram Rajan, have raised concerns[19] about the economy and the need for accelerated investments in human capital[20].

But overall, it seems that people have faith in the economic growth story under Modi[21] and have entrusted him with another five years in office, even though these underlying issues might have meant that his party has been denied a crucial majority.

Crowds celebrate with Modi placards.
BJP supporters celebrate. EPA-EFE/HARISH TYAGI

And that faith appears to go beyond the voters. When it emerged that Modi was in fact not on course to secure an overall majority, India’s stock market plunged[22].

Investors had been hoping for a strong, business-friendly government and stocks reached record highs[23] after weekend exit polls indicated that Modi was on track for a big win.

But India’s economic future could still be bright. To become a developed country by 2047, it has to sustain the growth momentum[24] over the next quarter century, building on the economic gains[25] of the last decade.

It also needs to ensure that inequality and unemployment are effectively tackled, perhaps through greater investments in small rural businesses[26] and developing start-ups[27] to complement the current large-scale investments in industry.

All of this will need a shift back to Modi’s claim to work[28] “sabka saath” (with everyone), “sabka vikas” (for everyone’s progress), “sabka vishwas” (with everyone’s trust) and “sabka prayas” (with everyone’s effort). That effort, trust and progress will now have to be achieved in the form of a coalition government.

And its members will have to show clear determination if the country is to achieve its aim of a “developed India”[29] by 2047.

References

  1. ^ set to return Narendra Modi (www.bbc.co.uk)
  2. ^ take on Modi (www.pbs.org)
  3. ^ said (edition.cnn.com)
  4. ^ has achieved (www.britannica.com)
  5. ^ economic transformation (www.forbes.com)
  6. ^ by 2047 (www.pwc.com)
  7. ^ modernisation of infrastructure (www.businesstoday.in)
  8. ^ increase in foreign investment (www.fdiintelligence.com)
  9. ^ vibrant start-up ecosystem (economictimes.indiatimes.com)
  10. ^ dramatically reducing poverty (www.brookings.edu)
  11. ^ fifth largest economy (www.weforum.org)
  12. ^ up from 11th (countryeconomy.com)
  13. ^ rank third (www.bbc.co.uk)
  14. ^ fastest growing (www.spglobal.com)
  15. ^ estimated at 8.2% (www.livemint.com)
  16. ^ lower than UK’s inflation rate (www.imf.org)
  17. ^ inequality (wid.world)
  18. ^ unemployment (www.reuters.com)
  19. ^ raised concerns (www.business-standard.com)
  20. ^ human capital (www.foreignaffairs.com)
  21. ^ economic growth story under Modi (www.firstpost.com)
  22. ^ stock market plunged (edition.cnn.com)
  23. ^ record highs (edition.cnn.com)
  24. ^ sustain the growth momentum (www.pwc.in)
  25. ^ economic gains (www.imf.org)
  26. ^ small rural businesses (link.springer.com)
  27. ^ developing start-ups (link.springer.com)
  28. ^ Modi’s claim to work (www.youtube.com)
  29. ^ “developed India” (www.ey.com)

Read more https://theconversation.com/indian-election-why-modi-may-now-need-to-switch-his-economic-ambitions-to-new-businesses-and-small-firms-231615

The Fast Track to Home Selling: A Comprehensive Guide to Quick Sales

The pace of the real estate market varies widely based on several factors, including location, property value, and current economic climates. For ma...

Property

ANOTHER DESIGN Is Committed To Offering Expert Stylish Brand For Real Estate Business

ANOTHER DESIGN is a rising lifestyle development group with a great reputation, widespread appeal, and high demand. They understand the busine...

Property

The age of informed action is beckoning, and it is vital for business leaders to prepare

With the embers of the pandemic still very much alight in the ANZ region, hybrid work is the norm - office hours are being reshaped and data has g...

Business Training

Money Saving Tips When Selling Your Home

Putting your house on the market can be a stressful experience, especially when you’re worried about how much it will cost. But there are several ...

Property

Strengthening information security: A vital step forward for businesses in wake of cyber attacks

In an era where cybercrime is on the rise, businesses are facing an unprecedented threat to their clients' private information. As the Australi...

Business Training

Branding: A guide to colour

Colour Psychology Bhavani Lee an Associate Creative Director at Vista Australia has shared her insights and expertise on the psychology behind co...

Business Training