Narendra Modi may turn populist, shun major reforms till polls: Report

On the macro front, he is unlikely to attempt any new ambitious legislative reforms until H1 of 2019 and is likely to focus on improving the delivery of government services and ease of business, Barclays India chief economist Siddhartha Sanyal says.

By: PTI | Mumbai | Updated: August 13, 2017 4:54 pm
narndra modi news, economy news, business news, indian express news “Rather than look to conquer new ground in the run-up to the 2019 hustings, we expect Prime Minister Narendra Modi to focus on cementing the success of his reforms and infrastructure projects already started,” said Sanyal. (Source: Express Photo)

The Modi government is unlikely to undertake any major reform in the remainder of its term but may channel its energy to publicise achievements and emerge more people-friendly with lower taxes, says a report. “Rather than look to conquer new ground in the run-up to the 2019 hustings, we expect Prime Minister Narendra Modi to focus on cementing the success of his reforms and infrastructure projects already started. More focus will be on administrative initiatives and not new legislative reforms on the macroeconomic front,” Barclays India chief economist Siddhartha Sanyal said in a weekend note.

“Notwithstanding his aggressive reforms since 2014, we believe Modi will be selective in picking his battles and deploying his political capital ahead of the 2019 polls. A likely absence of near-term benefits will likely remain a constraining factor against launching new reforms in the run-up to the polls.

“Closer to the polls, Modi might consider deploying his political capital more to boost BJP’s ‘nationalist’ credentials rather than its ‘reformist’ image”, argues Sanyal.

If at all he does indeed accelerate reforms over the next 18 months, those will purely be based on the success or failure of such initiatives over the medium term, he notes. At best, he may attempt to complete the aborted reforms like land and labour laws amendment, but will not push it hard, given the limited immediate benefits likely from them.

“Therefore, ahead of the 2019 hustings, we expect Modi’s policy initiatives to evolve around three ‘C’s — combating corruption; completing existing policy priorities (resolving NPAs, fine-tuning GST, completing infra projects etc; and communication to highlight how his various initiatives are helping the common man, especially in rural areas,” Saynal says.

A communication blitzkrieg may focus on the benefits of the government policies for the common man (low inflation, anti-corruption efforts, direct benefit transfer, stronger infrastructure like electricity, roads, irrigation etc).

Having achieved some success on the anti-graft drive (over Rs 4,313 crore black money have been unearthed since May 2014), Modi may play up this again, says the report.

“Strong anti-corruption rhetoric is likely to stay at the core of Modi’s policy framework, especially given the rich political dividend the BJP has enjoyed from the banknotes ban. There is a possibility of stricter political funding rules, a crackdown on benami properties and progress towards greater disclosure of overseas assets of citizens,” Sanyal says.

“Modi will keep the rhetoric against corruption, including stricter norms of funding political parties, high-pitched ahead of the polls,” says the report.

On the macro front, he is unlikely to attempt any new ambitious legislative reforms until H1 of 2019 and is likely to focus on improving the delivery of government services and ease of business, he says.

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  1. M
    madhu
    Aug 13, 2017 at 11:40 pm
    The corruption increased "note Ban" from RBI side too. Home container goes to TTD, how notes were exchanged from pawn shop located close to RBI. If people has seen no action these noticed on Media. How many other back things happened god only knows. No accountability from RBI? How people trust system
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      madhu
      Aug 13, 2017 at 11:36 pm
      Please stop hype. Do achieve one thing you can not eliminate reduce poverty and corruption. Increase Edcation. it is only two years left if you focus and achieve something in all three of them public appreciate.
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        Balasubramanya
        Aug 13, 2017 at 10:48 pm
        It is very much required to keep the corrupt opposition from gaining power during 2019 even though the chances are very remote. Hungry Congis are waiting for the pray just like a wolf and will ruin India permanently.
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          JKG
          Aug 13, 2017 at 10:08 pm
          NaMo to create job opportunity for young generation by 2018
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            mark
            Aug 13, 2017 at 10:02 pm
            The only noteworthy reform of Modi's government is demonetisation. What we know is that close to 120 people died standing in queues. Industries after industries, specially the unorganised sector, wilted. People lost jobs in large numbers. And all the black money came back in the system. RBI has not released the numbers because it would prove the entire effort of demonetisation was a mamoth failure. It also made life difficult for ordinary, tax paying Indians. ATM's ran out of cash almost every days.
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              Socrates
              Aug 13, 2017 at 9:49 pm
              And that people, IS really the TRAGEDY OF REALITY in India! All politicians and political parties want to survive in power if they want to bring positive improvements to the overall situations in a nation. These politicians are forced - at some point - to resort to populist, losing propositions due to the sheer short-sighted, uneducated and free-loading masses looking to milk the system. The opportunist and shameless opposition does the rest of propaganda and pointless criticism to force things. If PM Modi is forced to choose populist agenda, so in order to win next election and carry on the reforms early in the next innings, so be it. Thankfully, he is pragmatic enough to recognize that it is more important to retain power to bring about any change, than to implement much-required hard measures in one go and lose next elections. He must not repeat the mistake of Shri AB Vajpayee government and will be able to strike a balance between reformist and populist measures.
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                ami g
                Aug 13, 2017 at 8:26 pm
                What is the basis of this conclusion? Is there any method to arrive at such conclusions? No. Why do newspapers give a platform to these good for nothing people? Any body with a gift of gab can give this sort of prediction.
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                  Ramesh Nittoor
                  Aug 13, 2017 at 8:34 pm
                  Ami, these reports are given by each MNC bank to their investors. So it is almost certain that they do have credible insight into decision making process in India. Unlike us, who are looking it from the rim. The reform risks to the government is quite real. Demonetisation is still not credible in the liberal academic world, but most of us, the commonsensical types, are convinced it is the right move. To many liberal folks, who distrust this so called Hindu Nationlist government, it was a brazen, populist move at the expense of economic growth. That worldview dominates financial sector.
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                    Ramesh Nittoor
                    Aug 13, 2017 at 8:46 pm
                    Party and election funding, which Hon Finance Minister has announced is next on agenda, is the most difficult one. The MNC banks rationally consider it is next to impossible. They got to remember the Intel wisdom, only paranoid succeed😀. This reform requires political consensus. Getting Congress party, particularly Sonia-Rahul duo to commit to this reform is most important. JDU and left would be committed anyway. This enabler reform paves way for open economic architecture with entry of MNC Banking, including investment banking. This capacity to take greater political risk, by bringing transparency in political funding, is a necessary precaution to reduce neocolonial influence risks of banking reforms.
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                  Ramesh Nittoor
                  Aug 13, 2017 at 8:16 pm
                  Barclays analysts do not get the गंभीरता, PM Modi brings forth to the transformation process. He has said earlier, that reform process is not driven by electoral conditions, but need to make India a developed nation. Besides, the fact is in this world of informed population, opinion leaders in vernacular India, and these folks are a fair bit discerning ones, can spread the good word, if real works gets done. So good governance is a winning way in politics. This has been amply demonstrated in Gujarat. With new NITI Chief in place, expect further improvements and detailing of the policy exercise, and commitment to keep the momentum going. Next reform FM Jaitley has announced is in Party and election funding. Political integrity of a kind, which was evident only in Nehru cabinet is in saddle now. अश्वरोही भारतीय reform process shall move at a faster clip now. The imagery is to convey horse sense to focus on practical, real changes for masses, and do those with greater power and speed.
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                    Ramesh Nittoor
                    Aug 13, 2017 at 8:17 pm
                    He has said earlier, that reform process is not driven by electoral considerations.
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