Three and a half years of Modinomics: A hype or Reality

2 months ago SANJEET DWIVEDI 0

                                         Three and a half years of Modinomics: A hype or Reality

There was a time when our country was going through its worst phase i.e  between 2009-2014. During this period, our country has witnessed various cases of mass corruption not of lakhs or crores but of thousands of crores. 2014 elections were seen as hope that our country will get rid of Corruption someday. People were seeing this hope in Narendra Modi. Due to the credibility of Narendra Modi people of our country gave a huge mandate to BJP led NDA in 2014 elections.

Modinomics

Now, it has been three and half years since the government formed, it is the time we take the stock of the central government progress. This long period is enough for any government to prove that the reforms that have been undertaken by them are ready to give fruitful results. A term was propounded Modinomics for the economic policies undertaken by his government. But before looking into Modinomics, it is important to look into the legacy he received.  Some of them are:

  • Double Digit Inflation from 2008-09 to 2013-14
  • Increase in fiscal deficit from 4.5% to 6.5% between 2008-09 and 2013-14
  • Decline growth rate for consecutive six quarters beginning from third quarter of 2010-11
  • Increase in Current Account deficit to 4.3% in 2011-12 and 4.8% in 2012-13

Indian Economy was sliding down rapidly, no one has ever imagined that the situation will come when the Standard and Poor will have to ask in their 2012 report that “Will India Be the First BRIC Fallen Angel”?

After coming to power, Narendra Modi’s first priority was to restore macroeconomic stability and to give a push to GDP growth rate. Central Government under the leadership of Narendra Modi brought various economic policies which help to bring stability in the economy on the macroeconomic front. During three full financial years from 2014-15 to 2016-17, the GDP has grown at the average rate of 7.5%. It was the first time India has surpassed China in terms of GDP growth rate. Also, the fiscal deficit came down steadily from 4.5% in 2013-14 to 3.2% in 2017-18. The central Government has been successful in bringing down inflation from 10.1% in 2012-13 to 4.5% at present. Apart from this total Foreign Direct Investment (FDI) has risen from $36 billion in 2013-14 to $45 billion in 2014-15, $56 billion in 2015-16 and $60 billion in 2016-17.

A number of economic reforms have been undertaken to bring out the country from the clutches of monotonous growth. Some of them are:

  • Reforms in Taxation System
  • Privatization of Public Sector Enterprises
  • Reduction in Petroleum Subsidies
  • Cooperative and Competitive Federalism

Despite the progress made, Narendra Modi government has to work on various key factors which are still acting as a barrier to the overall growth of the economy. For Ex- Due to bad loans, our banks have been suffering a lot as their credit strength is reduced drastically which is why investment is not picking up with a full potential. Low investment leads to low demand, thus resources have remained unutilized. Though the government has taken various steps in this regard too, like the passing of Insolvency and Bankruptcy code Bill, the need of the hour is to implement it in an efficient manner so that it can give some strength to the banking sector of the country.

Author Mr. Abhishek Arora is a  team member of Nations Opinion. It is his well-researched article on “Three and half years of Modinomics”

 

 

 

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