Modi’s tasks and challenges

Posted on: May 19, 2014


The two aren’t exactly mutually exclusive but as per former BJP leader Jaswant Singh a buzzing stock exchange is not an index of good economic health. On the day of the results, the stock market ended 216 points higher at 24,121 after earlier rallying 1470 points on BJP’s big win. Earlier this week, Reserve Bank of India governor Raghram Rajan said that contingency plans are in place to tackle market volatility. As per economist Surjit Bhalla, the stock markets around the world are moving up and the Indian market hasn’t gone ahead of itself so far.

Experts suggest that the government will have to take immediate measures to pick up the economic growth which has fallen below five per cent. Measures to boost confidence include improving the manufacturing sector, getting the investment cycle going, and fast track project clearances. “The industry is looking for top policy steps such as introduction of Goods and Services Tax (GST), easing of interest rates by 100 bps, keeping subsidies at 1.7 per cent of GDP, and restructuring of labour laws to promote mass manufacturing,” says S Shriram, president, Confederation of Indian Industry (CII).  GST is an indirect tax reform which will replace the existing state and federal levies with a uniform tax and when implemented will boost the economy, though it would need firm backing as it requires a change in constitution.

According to Bhalla, income tax compliance will be a big challenge ahead for the government. “Growth will depend on what will be done to land acquisition, how labour laws are implemented and quick decisions to be taken on pending projects,” Bhalla adds.


The previous government had presented an interim budget in February. Under the new government, the budget which is expected by July, will be a tough one and would put forward a strong statement. The industry sentiments have to be valued without affecting pro-poor reforms, say insiders. As per Sidharth Birla, president, Federation of Indian Chambers of Commerce and Industry (Ficci), the first budget should be a roadmap for fiscal and current account consolidation. “It should lead to revival of investments, so as to strengthen civic, physical and social infrastructure,” Birla says.

According to reports, plans are being devised to cut the federal fiscal deficit, which could potentially risk a ratings downgrade, if there is no economic growth. “Also, greater power must be given to states to amend/implement laws especially labour and environment. The states should be incentivised to pace up the implementation of key reforms, such as GST,” Birla says. India, which has a vulnerable emerging market, also needs a strong reform package to generate 150 million new jobs in the next 10 years.


The BJP in its manifesto said it will seek greater fiscal discipline without compromising on the availability of funds for development. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA), one of the flagship programmes of the UPA, would get an overhaul, predict insiders. The act which offers 100 days of guaranteed wage-employment in a year to a rural household may undergo tweaking in the days ahead. The ability to raise revenues for MNREGA would depend on the tax revenues collected from big businesses and profits made.


“Since the food bill was supported in the Parliament, they will be compelled to continue with the programme,” says Harsh Mander, Supreme Court Commissioner to Right to Food case. Political observer Ashok Malik says that the scheme would be linked to asset creation. The subsidies cost an estimated 2.2 per cent of India’s GDP last year and the task ahead for the NDA would be to contain it.  “The government needs to immediately disband MNREGA and replace it with cash system. Subsequently the amount of saving will increase,” Bhalla says.


 UPA’s pet project, Aadhaar, which promised to give identity to one billion plus people of India could be sidelined, if not scrapped, by the BJP government. Since the project, which had no Constitutional backing, has already been challenged in the Supreme Court,  BJP will not like to continue with the Rs 3,300 crore project anymore. Even after the court has directed the outgoing government to withdraw all orders which made Aadhaar mandatory for availing of government schemes, Aadhaar is still being considered compulsory for school admissions and marriage registration. But the new BJP government is likely to make this project invalid. There are also apprehensions that BJP will take on Nandan Nilekani, the man behind the project. Some believe that BJP would hound him and file a case against him. But there are others who think that BJP will not get into “petty” things. “BJP would have created problems for him if he had won. Now, they will let go of him,” political analyst Partho Ghosh feels.



With Mamata Banerjee’s Trimanul Congress winning 34 seats, it will definitely create a turmoil in the Parliament. Issues that Trinamul plans to raise with the BJP government are FDI in retail, price rise and inflation. The other big issue that the Trinamul will take up is the demand for a moratorium on interest payment and restructuring of its outstanding debt for Bengal. But there is no way that they will go soft with the right-wing party. Senior Trimanul leaders say that they will disrupt the Parliament exactly the way BJP did during UPA’s regime. “Having a  strong 27 per cent Muslim population in Bengal, we will never support BJP’s policies. We will prove to be destructive opposition for the BJP,”  a seniorTrinamul leader says. One has to wait and watch how tactfully Modi handlles one of his biggest oppositions!


Education is one area where BJP is likely to focus upon. One of the first things that BJP would like to do is change the national curriculum. UPA-I did it when it came to power in 2004. A new national curriculum framework was set up to under the chairmanship of National Council Educational Research Training (NCERT) director Krishna Kumar, who is known to be an intellectual with Left leanings. Experts say that BJP would make an attempt to saffronise textbooks just the way they did it during NDA’s previous regime ( 1999-2004) when Murli Manohar Joshi was the human resources development minister. There will be attempts to “deliberate omissions and additions, use of certain words, using matters out of context and tweaking of facts” to colour the curriculum saffron. Some experts, half in jest, says that ‘Bal Narendra- Childhood Stories of Narendra Modi’ showcasing bravery tales of Modi’s childhood could be introduced in textbooks of primary classes too. Plus, the BJP would also retrustructure the University Grants Commission (UGC) and fill the post of member secretary, which has been lying vacant for an year. The academia is looking for a “free and fair” process of appointment to be followed in the 15 new central universities too. The other important task of BJP is to clean up the “deemed university” mess created by the former Congress human resources development minister Arjun Singh during UPA-I.  So, BJP has its handsful as far as education reforms are concerned.


The rift between the Chief Election Commissioner V.S. Sampath and the BJP is all out in the open . Speculation loom large that the BJP will try to make some changes in the composition of the EC by expanding the three-member panel to a five member one. But thankfully, BJP will not have to deal with Sampath for long as his tenure ends on January 15, 2015. It is H.S. Brahma, who will take over the top post of the EC once Sampath is gone. But BJP is not likely to have any problems with Brahma, who has recently criticised the UP state poll panel for its delayed response to the request of Narendra Modi who wanted to organise a rally in Varanasi’s Muslim populated Benia Bagh. Hailing from the Bodoland, Brahma even supports BJP’s crusade against Bangladeshi immigrants.



The NDA government will have to give a clear signal that this is not a hostile government. “They will have to tell people that it is not a government to be run by Narendra Modi and Amit Shah,” says Sanjay Kumar of Centre for the Study of Developing Societies. Even though the election has been won on the Modi wave, the government has to be run with team effort. “Modi has to send out a signal that he has the capacity to accommodate and listen to everyone,” Kumar says.

So the voices of dissent which originated from the three senior leaders LK Advani, Murli Manohar Joshi and Sushma Swaraj, will have to be suitably pacified. Party insiders say there would be plum cabinet positions for Joshi and Swaraj. “Advani won’t be happy with the Lok Sabha speaker’s position as is being widely speculated. He would look for some executive position which holds power within the party like being the chairman of NDA,” says an insider.

According to political observers, the other possible voices of dissent that could create trouble in the future for Modi include SS Ahluwalia who defeated TMC’s Bhaichung Bhutia, Ananth Kumar who emerged victorious against Congress candidate Nandan Nilekani and Shatrughan Sinha.  “There won’t be any camps. A difference of opinion doesn’t necessarily translate to camps. When Modi became the chief minister of Gujarat there were voices of dissent yet he had three successful terms. Modi knows how to withstand opposition,” says Sheshadri Chari, member, national executive, BJP.




Now that Telangana has been formed, it’s time for political parties in Seemandhra to make noise. One of the major tasks of the BJP will be to deal with stiff opposition that Seemandhra leaders will pose in shaping up of Telangana.  Political observers say that more violence and unrest are likely to happen in the Seemandhra region as leaders of the region. Plus, the BJP might have to deal with the demand to keep Hyderabad as the joint capital of both Telanagana and Seemanshra even beyond the stipulated period of 10 years.  There could be demand to make Hyderabad an Union Territory as it has been in the case of Chandigarh, which serves as a joint capital of both Haryana and Chandigarh.  In nutsehll, it was Telangana which haunted the UPA, it will be Seemandhra which will keep the BJP busy.


(Compiled by Smitha Verma and Sonia Sarkar)


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