Governing India is an unbelievably tough challenge to any government, what to speak of a coalition. This is a critical time in our history when almost the whole world is watching us while hailing us as a successful democracy. The stakes for quality governance are very high. For the first time in a decade, the Bharatiya Janata Party has missed the majority mark.
While a coalition government will have implications for India’s domestic policies, on the foreign policy front there will be continuity. S Jaishankar, at the helm of the foreign ministry, has a set goal to make India a “leading power”. This aligns with the BJP’s projection of India as Vishvabandhu — a friend of the world, but one to whom the nation comes first.
The challenges for the new government are as follows:
As a new government takes office in New Delhi, the biggest challenge it will face in the food and agriculture sector is managing food inflation, which has worsened due to supply-side pressures in 2023. Rural distress, manifested by a decline in job prospects and slow growth in the non-farm sector, is also a major challenge to be addressed. The government could look at creating a favourable policy environment for the agrochemical sector that would facilitate an increase in agrochemical exports, positioning India as an attractive destination for foreign investments, and safeguard the interests of small and regional players operating in the industry.
Unemployment in India has also been one of the main issues in the campaigning of Congress accusing the Modi government of doing little to provide jobs for the country’s youth. The unemployment rate in India rose to 8.1% in April from 7.4% in March, according to the private think-tank Centre for Monitoring Indian Economy. Government estimates for the latest January-March quarter show that the urban unemployment rate in the 15-29 age group ticked higher to 17% from 16.5% in the prior quarter. India’s rising world stature and assertive foreign policy have been touted as major recent achievements by Modi’s administration.
A key diplomatic strain, however, remains with China which was spurred by a 2020 border clash that left 20 Indian and four Chinese soldiers dead. Modi said last month the countries should address the “prolonged situation” on their border.
Modi’s government has been trying to attract foreign companies to diversify supply chains beyond China. Coming to shifts, India’s global conversation has to transition from the political to the economic. Delhi has made many commitments to investors, and the biggest is that India can be a trusted +1 alternative to China. Expect a greater effort on the Make in India initiative and the expansion and professionalisation of supply chains and attendant infrastructure. Corporate India will be encouraged to increase investments in manufacturing. India’s economy is expected to have grown by about 8% in the last fiscal year, one of the fastest rates among major economies, but voters have pointed to disparities on the ground, with growth more visible in cities than in the vast hinterland.
The economy has jumped five places to be the fifth-largest in the world in the past decade under Modi and he has said he will lift it to the third position if elected. But the country’s per-capita income still remains the lowest among G20 nations.
All the bright spots have faded, and there is no sight of new ones. That does not mean there will be none. But someone will have to seek them out; someone will have to invest in them; someone will have to take the risky road. The road waits for daredevil riders.
No matter who forms the Government but the problems in all the sectors have barely been solved. The citizens of India has no hopes left but wants only a little relief from all these problems.