Breaking Views: What Are Economic Challenges For Modi Govt 2.0?
Video Editor: Vivek Gupta
Voters have expressed their confidence in the Modi government again. All eyes now turn to the new government's economic agenda. In the next six months, the government will have to present the Budget. Before the elections, there were many issues and realities which got somewhat lost in the poll noise.
Now, the government will have to include these in their agenda and start working on these issues as soon as possible. Some of these are:
- Slowdown of Economic Growth
- Income Inequality
- Farmer Distress
The government was able to somewhat retain control on the NPA crisis in banks, but IL&FS's mistake made the cash-strapped crisis of the NBFCs more evident.
The government will have to devise a strategy to tackle the liquidity crisis in the markets. It will have to restart the cycle of manufacturing and sales. The US-China trade war is a window of opportunity for India. If the government makes India a manufacturing hub, it will lead to creation of jobs also.
The BJP needs to understand that this massive victory doesn't mean all of India's problems have disappeared. Farmer distress is one that hasn’t been. The new government's first priority should be to listen to the farmers and make amends.
It is more important because agrarian states, such as Maharashtra and Haryana, are going to Assembly polls in the next six months or so.
The government needs to increase the partnership of farmers in the market by eliminating middlemen. Farming should be turned into profitable employment.
Apart from this, the government needs to work on the labour and land sectors, and open up the construction sector. The government needs a balance between populism and pragmatism. A drastic increase is also needed in private investment. For all this, the government needs a lot of money.
It will be desperately waiting the report of the Vimal Jalan Committee, hoping that it will recommend RBI to release money to the government.
All eyes will now turn to the new government's economic agenda. A lot depends on who Modi will appoint as the next finance minister.