Prime Minister Modi and his government inherited an economy that was weak at its core. The pace of progress was slow, and the confidence of investors was dwindling day by day. India had accumulated nearly a dozen trillion rupees in debt, leading to loans of billions of rupees from the country's banks, with no progress made in repayment.
At the beginning of the current year, thousands of people gathered at Delhi's Red Fort in the severe cold of January to listen to Prime Minister Narendra Modi's speech. Prime Minister Modi, in this large gathering, delivered the message of "Developed India 2047" or "Prosperous India 2047", promising to make the country prosperous and developed by 2047.
Prime Minister Modi has repeatedly emphasized during his speeches a new term. Although "Developed India" is a term that has been discussed in various ways, Narendra Modi, who came to power a decade ago, has repeatedly talked about laying the foundation for rapid economic progress over the past 10 years.
Prime Minister Modi and his government inherited an economy that was weak at its core. The pace of progress was slow, and the confidence of investors was dwindling day by day. India had accumulated nearly a dozen trillion rupees in debt, leading to loans of billions of rupees from the country's banks, with no progress made in repayment. Due to these obligatory loans, banks' ability to lend to traders was greatly reduced.
Now, a decade later, India's pace of progress is visibly accelerating compared to other major economies in the world. India's banks are now in a strong economic position, and despite the challenges of the Corona pandemic, India's government treasury is stable. Last year, India surpassed Britain to become the world's fifth-largest economy. According to analysts at Morgan Stanley, by 2027, India is set to overtake Japan and Germany to become the world's third-largest economy.
There is no doubt that after Prime Minister Modi's policies, a new hope has arisen in India. One of India's many successes was hosting the G20 summit. The country has become the first in the world to land on the southern pole of the moon, and over the past decade, dozens of companies have emerged in India that own assets worth more than a billion dollars.
With every rising sun in India, the country's stock market is reaching new heights, and the middle class in India has also begun to feel the cool breeze of the country's stable economy. When it comes to ground realities in India, "Modinomics," meaning the economic viewpoint of the ruling Bharatiya Janata Party (BJP), is seen to be working.
However, when you delve deeper into this whole situation, an interesting picture emerges. In this vast country of 1.4 billion people, there are still millions of people who have to work hard to earn their daily bread. For such classes, India's stable and robust economy has not yet done anything special. The golden age of progress is still to come for them.
So, who has benefited from Modi's economic policy, and who has suffered?
Digital Revolution
Attention given by Narendra Modi towards digital governance is bringing changes in the lives of poor people in India. Today, even people living in remote areas of India can obtain their daily necessities without cash. Today, many people in the country can scan a QR code to pay a nominal amount like 10 or 20 rupees to buy a packet of bread or biscuits.
At three levels, under this digital system, every citizen of the country has an identity card, digital payment, and a column of data, which provides important personal information like tax returns to people in a moment. Connecting millions of bank accounts through this "digital system" has significantly reduced irregularities.
According to estimates, the implementation of digital governance has saved India's GDP equivalent of 1.1 percent by March 2021. Through this, the government becomes able to directly deposit various social subsidies and financial assistance into their accounts, in addition to helping the government to spend on basic infrastructure without incurring heavy financial losses. Construction works are going on in every part of the country.
If you go anywhere in India, you will see cranes and JCB machines running everywhere. All these are busy in creating a new and bright picture of India's extremely damaged basic infrastructure. For example, you can see India's first underwater metro line being built in Kolkata.
There is no doubt that India's situation is now changing rapidly. The construction of new roads, airports, ports, and metro lines has been the focus of Narendra Modi's economic policy. For the past three years, his government has been spending $100 billion annually on the development of basic infrastructure. Between 2014 and 2024, nearly 54,000 kilometers (33,553 miles) of national highways were built in India, which is double compared to the last ten years.
The Modi government has also changed the attitude of the bureaucracy. Previously, the bureaucracy was considered the most terrifying aspect of India's economy. However, Modi did not succeed in meeting everyone's expectations. A strict and painful lockdown was imposed during the pandemic. The impact of the currency note ban in 2016 is still visible on India's economy. Reforms of the direct tax system, i.e., Goods and Services Tax (GST), were introduced, but there were many flaws in its implementation. All this resulted in far-reaching consequences for India's economic infrastructure.
India's most disorganized small trader class, which serves as the backbone of the country's economy, has still not been able to overcome the effects of these decisions. Now, in such a situation, the private sector in the country is showing reluctance to make heavy investments. According to GDP ratios, private investment remained at only 19.6 percent in 2020-21, whereas it was 27.5 percent of GDP in 2007-08.
Issue of Employment
In January of this year, thousands of young people gathered at recruitment centers in the capital of Uttar Pradesh, Lucknow. They all had dreams of employment in Israel's construction industry and had come here hoping to fulfill them. BBC's Archana Shukla spoke to many people there.
The disappointment of these workers indicates how severe the employment crisis in India really is. This crisis is choking hope in every corner of the country.
23-year-old Rukia Bepari says, "I am the first member of my family to have a post-graduation degree. But where I live, there is no employment, so now I tutor children. I do earn money from this work, but it's not enough.
For the past two years, Rukia and her brother have had no permanent employment. They are not alone in facing this situation in India.
According to the latest figures from the International Labor Organization, in 2000, the percentage of educated youth in the country was 54.2%, which has now increased to 65.7% in 2022.
According to renowned economist Jean Dreze's compiled data, there has been no significant increase in wages or salaries in India since 2014.
Creating job opportunities has remained a major challenge for India, which Narendra Modi has failed to address.
Has India adopted the form of a world industry?
Immediately after his successful election in 2014, Prime Minister Modi launched a vigorous campaign called 'Make in India'.
The aim of this campaign was to transform India into a major industry for the world.
In 2020, his government provided $25 billion in assistance to companies from semiconductor to mobile electronics manufacturers to enhance the country's manufacturing capabilities.
However, success has not come their way.
Yes, companies like Foxconn, which make iPhones for Apple, are coming to India to diversify under their global policy 'China Plus One'.
Other major international companies like Micron and Samsung are also enthusiastic about investing in India, but these numbers are not yet significant.
Despite all these efforts, the manufacturing sector has not changed significantly over the past decade.
Increase in revenues
Revenue growth was also better during the tenure of the current Prime Minister Modi's predecessors.
Professor Vidya Mahambare of the Great Lakes Institute of Management says, "If the growth rate of India's manufacturing sector is 8 percent annually until 2050 and China remains stuck at the 2022 level, India's manufacturing sector will still not be able to compete with China's level of 2022 by 2050.
Due to the scarcity of large-scale industries, half of India's population still relies on agriculture for their livelihoods, which is becoming more of a liability than an asset day by day.
The direct result of all this is that the budget of the average person's household in India is shrinking, and their worries and burdens are increasing.
After all these situations, the burden of loans on ordinary people in India has reached its record level, but on the other hand, those people who used to succeed in saving some money earlier are now unable to do so.
Many economists believe that India's economic progress has been uneven after the pandemic. While the rich are getting richer day by day, the poor are sinking deeper into troubles.
Although India has become the fifth largest economy in the world in terms of GDP, it is still at 140th position in terms of per capita income.
Inequality persists.
The latest research from the 'World Inequality Database' reveals that inequality in India has reached its highest level in 100 years.
It's no wonder that discussions surrounding electoral campaigns these days revolve around wealth distribution and inheritance taxes.
Recently, during the three-day festivities preceding the wedding of the son of India's billionaire business personality Mukesh Ambani, glimpses of this 'golden era' of India were witnessed.
The ceremony was attended by big names like Mark Zuckerberg, Bill Gates, and Ivanka Trump.
Rihanna danced alongside Bollywood's big stars.
Arnab Mitra, who researches Indian consumer brands at Goldman Sachs, says that luxury brands' businesses in India, including car manufacturers, watchmakers, and expensive liquor companies, are growing rapidly compared to companies catering to the needs of ordinary people.
Viril Acharya, a professor at New York University's Stern School of Business, says that large business families are prospering by "riding on the earnings of thousands of small companies.
Acharya says that heavy tax cuts for large capitalists and policies aimed at creating a 'national champion' have benefited them. Under this policy, valuable government assets like ports and airports have been handed over to a few selected companies to build or operate.
After the release of electoral bond statistics, it is evident that many companies are ahead in donating to the ruling Bharatiya Janata Party.
Is this really India's era?
Overall, all these things present a contradictory picture of India's economy. However, experts say that despite many challenges, India is progressing towards its goals today.
Analysts at Morgan Stanley have written in an article that India's next decade could be like China's (one of the rapidly growing economies) from 2007 to 2012.
These analysts say that India has an advantage in many respects. India has a large population of young people.
Giving emphasis on the development of basic infrastructure is another aspect that yields long-term results. Indian economic expert D.K. Joshi asserts that India is establishing conditions conducive to the growth of the manufacturing sector by enhancing infrastructure such as roads, ports, electricity supply, and ship loading facilities.
Former Governor of the Reserve Bank of India, Raghuram Rajan, says that alongside focusing on 'physical capital,' Narendra Modi also needs to pay attention to 'human capital.' (That is, attention should also be given to solving the problems of their people alongside development.)
Today, educational standards and facilities for children in India are not like those needed to face the world of artificial intelligence.
According to a report published by the Pratham Foundation, a quarter of children aged 14 to 18 in India cannot even read a simple sentence properly.
The COVID pandemic had caused a major setback to students' education as they could not go to school for almost two years. But despite this situation, the government did not increase investment in the education and health sectors.
It seems that in Modi's first decade in power, economic policies have only benefited a few select individuals.
Along with this, it seems that for the majority of the country's population, the dream is still incomplete.
How are Modi's policies guaranteeing India's rise to become the world's third-largest economy in his third term in office?
How much truth is there in the claims of becoming a bigger economy than Britain for India?
Extraordinary speed in the economy before the general elections, number juggling, or India actually on the path to becoming the world's third-largest economy
'Rampant poverty' in India's rapid development: 'Why does the person who cleans the gutter always end up dying?'
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