Reforms for a New India: How to steer transformative economic change in Modi’s second term
Transformational reforms had acquired great momentum, when in 2004 Lok Sabha elections the government of Prime Minister Atal Bihari Vajpayee unexpectedly lost mandate. Under the United Progressive Alliance (UPA), which came to the helm, reforms came to a sudden stop. Then, during its second term, the UPA introduced several anti-growth policies reminiscent of the Indira Gandhi era.
After Prime Minister Narendra Modi came to office in 2014, India saw a return to reforms with three important and politically difficult reforms introduced: Insolvency and Bankruptcy Code, Goods and Services Tax, and Direct Benefit Transfers. Infrastructure building received a boost as well. That helped the economy shift to the average annual growth rate of 7.5% during the past five years from 5.9% during the last two years of UPA.
India has now returned Modi with the same overwhelming mandate it gave him in 2014. Encumbered by wishful thinking, media pundits had used caste, religion and region-based calculations to predict a fractured mandate, even a hung Parliament this time around. But Indians thought differently: discarding all these considerations, they put their faith in Modi and placed their fate in his hands.