India | Is The Bloom Off The Rose For Narendra Modi?

Modi was swept into office with a resounding mandate, a response to the sheer despondency brought about by a decade of national policy paralysis. But his popularity is ebbing. Some say he hasn’t delivered; others believe expectations were unreasonable, and that real change takes time.

In a survey in May for the English-language newspaper Times of India, Paris-based market research agency Ipsos noted a decline in the Modi government’s popular approval rating. But a national business group, the Associated Chamber of Commerce and Industry (Assocham), has given the regime a solid seven on a scale of 10 for its handling of the economy thus far.

Assocham praises Modi’s pursuit of growth through strategies including implementing financial inclusion measures; reforming the subsidy structure for oil, food and farm products; supporting investment—particularly foreign investment in the defense and insurance sectors; reforming the Goods and Services Tax (GST); and enhancing transparency in bandwidth auctions.

Critics point to few new jobs created, a widespread agrarian crisis, slow progress on the planned $1 trillion investment in large infrastructure projects, and little headway on tax reform. In May, the opposition Congress Party succeeded in delaying the GST reform measure in Parliament, forcing the review process to start again.

But Rana Kapoor, founder and CEO of Yes Bank, India’s fifth-largest private-sector bank, said it’s too soon to judge. “The industry must realize that an (Indian) economy of two trillion dollars, well integrated with the world, cannot be catapulted into high growth just with the change of government.”

Kapoor sees it taking at least 24 to 30 months before Modi’s policy tweaks and legislative changes lead to an uptick in consumer demand.”

India’s Finance minister, Arun Jaitley, insists the government is “on the right track.” Key stakeholders are keeping their fingers crossed.