*MUMBAI: *Indian Prime Minister Narendra Modi swept to power five years agoon a business-friendly manifesto that promised to shake up Asia’sthird-largest economy and boost employment.
As Modi, 68, seeks a second term in India’s almost six-week mega-electionbeginning on Thursday, *AFP* looks at how he has delivered on his maineconomic pledges.
Young people voted for Modi in droves in 2014 after he said he would create10 million jobs a year.
Many, however, have been left disappointed — and jobless.
A newspaper recently published what it called an official report buried byModi’s government showing unemployment at its highest since the 1970s.
Last year a staggering 19 million people applied for 63,000 positions atIndian Railways.
The opposition has used unemployment as one of its main lines of attack inthe campaign, with Congress chief Rahul Gandhi attacking Modi for creatinga “national disaster”.
Analysts say that the economy has failed to expand at the rate required toemploy the one million Indians who enter the workforce every month.
In 2014, Modi projected himself as an anti-corruption crusader who woulderadicate graft and so-called “black money”.
While Modi has been widely credited with ending a culture of cronycapitalism throughout government his overall record on corruption is mixed.
He has been lauded for toughening anti-corruption laws, including oneoutlawing ‘benami’ property, where owners purchase real estate throughthird parties to hide money.
India has risen three places to 78th in Transparency International’sCorruption Perception Index under his watch, five places behind SouthAfrica but nine ahead of China.
However, Modi’s first term will perhaps most be remembered for a shock cashban that rendered 86 percent of the high-currency bank notes void overnightand hit growth.
Modi said ‘demonetisation’ would root out illegal money but almost allnotes returned to the banking system, while the move caused untoldsuffering to millions of poor who operate outside of India’s formal economy.
Modi promised to boost foreign investment by making it easier for companiesabroad to do business in India.
To a large extent he has succeeded. The government has relaxed stringentforeign direct investment rules in many sectors including ininfrastructure, aviation and single-brand retail.
Foreign capital inflows into India have increased as a result. FDI in Indiarose to nearly $62 billion for 2017-18 and the government hopes it canregister $100 billion annually within two years.
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One of the most high-profile investments was US retail giant Walmart’spurchase of a 77-per cent stake in Indian e-commerce behemoth Flipkart lastyear for $16 billion.
Investors have expressed concern about recent protectionist measures ine-commerce though. The government announced surprise restrictions inDecember that would limit how companies like Amazon and Walmart couldoperate.
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Analysts are in general agreement that Modi’s much-trumpeted “Make inIndia” initiative failed to turn the Asian giant into a manufacturing hub,despite an advertising blitzkrieg.
Modi delivered on one promise that previous governments had said they wouldachieve but never did — pushing through a single national goods andservices tax (GST) designed to make conducting business in India easier.
The tax, which came into effect on 1 July 2017, was designed to replacemore than a dozen state and national levies and transform India’s $2trillion economy into a single market for the first time.
First proposed in 2006, it got the backing of most economists as being longoverdue and was hailed as the biggest tax reform since independence.
It has been credited with helping India soar up the World Bank’s “ease ofdoing business ranking”, with the institution saying India had jumped 23places to 77th position between 2017 and 2018.
The government has been forced to announce several changes to the GSThowever, after small-scale businesses complained they were being unfairlyhit by high tax rates.
Indian banks are saddled with some of the highest levels of bad debtanywhere in the world and Modi made tackling them a key priority.
The government has given the central bank greater powers to intervene incases of bad loans and in 2017 approved a $32 billion recapitalisation planto help state-owned banks clean up their books.
Analysts say progress is being made but the difficulty of recovering duesfrom alleged offenders, such as fugitives Vijay Mallya and Nirav Modi, showthat there is still a long way to go.
In 2016 Modi’s government overhauled archaic bankruptcy laws by passing theInsolvency and Bankruptcy Code which sought to make it easier to wind downcompanies and help banks recover soured loans.
The law set a 180-day deadline to resolve bankruptcy cases, whichpreviously took over four years on average. However, the Supreme Courtissued a verdict this week which could again delay some insolvencyproceedings. -APP/AFP
