Skip to content
Search

Latest Stories

Did prime minister Modi fulfil his economic promises?

Indian prime minister Narendra Modi swept to power five years ago on a business-friendly manifesto that promised to shake up Asia's third-largest economy and boost employment.

As Modi, 68, seeks a second term in India's almost six-week mega-election beginning on Thursday, we looks at how he has delivered on his main economic pledges.


- Jobs, jobs, and more jobs -

Young people voted for Modi in droves in 2014 after he said he would create 10 million jobs a year.

Many, however, have been left disappointed -- and jobless.

A newspaper recently published what it called an official report buried by Modi's government showing unemployment at its highest since the 1970s.

Last year a staggering 19 million people applied for 63,000 positions at Indian Railways.

The opposition has used unemployment as one of its main lines of attack in the campaign, with Congress chief Rahul Gandhi attacking Modi for creating a "national disaster".

Analysts say that the economy has failed to expand at the rate required to employ the one million Indians who enter the workforce every month.

- Corruption crackdown -

In 2014, Modi projected himself as an anti-corruption crusader who would eradicate graft and so-called "black money".

While Modi has been widely credited with ending a culture of crony capitalism throughout government his overall record on corruption is mixed.

He has been lauded for toughening anti-corruption laws, including one outlawing "benami" property, where owners purchase real estate through third parties to hide money.

India has risen three places to 78th in Transparency International's Corruption Perception Index under his watch, five places behind South Africa but nine ahead of China.

However, Modi's first term will perhaps most be remembered for a shock cash ban that rendered 86 percent of the high-currency bank notes void overnight and hit growth.

Modi said "demonetisation" would root out illegal money but almost all notes returned to the banking system, while the move caused untold suffering to millions of poor who operate outside of India's formal economy.

- 'Make in India?' -

Modi promised to boost foreign investment by making it easier for companies abroad to do business in India.

To a large extent he has succeeded. The government has relaxed stringent foreign direct investment rules in many sectors including in infrastructure, aviation and single-brand retail.

Foreign capital inflows into India have increased as a result. FDI in India rose to nearly $62 billion for 2017-18 and the government hopes it can register $100 billion annually within two years.

One of the most high-profile investments was US retail giant Walmart's purchase of a 77-percent stake in Indian e-commerce behemoth Flipkart last year for $16 billion.

Investors have expressed concern about recent protectionist measures in e-commerce though. The government announced surprise restrictions in December that would limit how companies like Amazon and Walmart could operate.

Analysts are in general agreement that Modi's much-trumpeted "Make in India" initiative failed to turn the Asian giant into a manufacturing hub, despite an advertising blitzkrieg.

- Taxing -

Modi delivered on one promise that previous governments had said they would achieve but never did -- pushing through a single national goods and services tax (GST) designed to make conducting business in India easier.

The tax, which came into effect on 1 July 2017, was designed to replace more than a dozen state and national levies and transform India's $2 trillion economy into a single market for the first time.

First proposed in 2006, it got the backing of most economists as being long overdue and was hailed as the biggest tax reform since independence.

It has been credited with helping India soar up the World Bank's "ease of doing business ranking", with the institution saying India had jumped 23 places to 77th position between 2017 and 2018.

The government has been forced to announce several changes to the GST however, after small-scale businesses complained they were being unfairly hit by high tax rates.

- Bad debt -

Indian banks are saddled with some of the highest levels of bad debt anywhere in the world and Modi made tackling them a key priority.

The government has given the central bank greater powers to intervene in cases of bad loans and in 2017 approved a $32 billion recapitalisation plan to help state-owned banks clean up their books.

Analysts say progress is being made but the difficulty of recovering dues from alleged offenders, such as fugitives Vijay Mallya and Nirav Modi, show that there is still a long way to go.

In 2016 Modi's government overhauled archaic bankruptcy laws by passing the Insolvency and Bankruptcy Code which sought to make it easier to wind down companies and help banks recover soured loans.

The law set a 180-day deadline to resolve bankruptcy cases, which previously took over four years on average. However, the Supreme Court issued a verdict this week which could again delay some insolvency proceedings.

More For You

JLR-Tata-Getty

JLR had initially planned to manufacture more than 70,000 electric vehicles at the facility. (Photo: Getty Images)

JLR halts plan to build EVs at Tata’s India plant: Report

JAGUAR LAND ROVER (JLR) has put on hold plans to manufacture electric vehicles at Tata Motors’ upcoming £775 million factory in southern India, according to a news report.

The decision was influenced by challenges in balancing price and quality for locally sourced EV components, three of the sources said. They added that slowing demand for electric vehicles was also a factor.

Keep ReadingShow less
Leicester drug supplier Sarju Khushal jailed for 11 years over £2m operation

Sarju Khushal

Leicester drug supplier Sarju Khushal jailed for 11 years over £2m operation

A MAN who supplied controlled drugs on a ‘wholesale’ scale across Leicestershire has been sentenced to 11 years in prison. Sarju Khushal, 30, was arrested in 2022 after investigations revealed he had been transporting drugs from Lancashire into the area.

Khushal, formerly of Hazeldene Road, Leicester, pleaded guilty to several charges, including the supply and conspiracy to supply class A drugs. He was sentenced at Leicester crown court last Thursday (6).

Keep ReadingShow less
Tamil Nadu Education

Tamil, one of the oldest living languages in the world, is a source of pride for the state’s people

Getty images

Education or imposition? Tamil Nadu battles India government over Hindi in schools

A war of words has erupted between Tamil Nadu’s Chief Minister MK Stalin and the federal government over the National Education Policy (NEP) 2020, which recommends a three-language formula in schools, with two of the three being native to India. Stalin has voiced strong objections, claiming that the policy could lead to the imposition of Hindi, a northern Indian language, in non-Hindi-speaking states like Tamil Nadu. The issue has reignited old tensions between southern states and the central government over the privileging of Hindi.

Historical resistance to Hindi

Tamil Nadu has a deep-rooted history of opposing the promotion of Hindi, dating back to the 1960s. Protests broke out in the state when the federal government attempted to make Hindi the sole official language, leading to a compromise that allowed the continued use of English. Language in Tamil Nadu is not merely a means of communication but a powerful symbol of cultural identity. Tamil, one of the oldest living languages in the world, is a source of pride for the state’s people. As a result, any perceived threat to its prominence is met with strong resistance.

Keep ReadingShow less
Former Bristol MP Thangam Debbonaire enters House of Lords as Baroness

Thangam Debbonaire

Former Bristol MP Thangam Debbonaire enters House of Lords as Baroness

FORMER Bristol MP Thangam Debbonaire has taken her seat in the House of Lords after being awarded a life peerage last month.

The 58-year-old, who represented Bristol West for Labour from 2015 until July’s general election, wore the traditional scarlet robes during her introductory ceremony. She will now be known as Baroness Debbonaire of De Beauvoir Town in the London Borough of Hackney.

Keep ReadingShow less