2024 Election, Economic Reforms And Modi

2024 ELECTION, ECONOMIC REFORMS AND MODI

Now that BJP has been reduced to 240 seats, what will happen to economic reforms? In a FICCI meeting in February, Finance Minister Nirmala Sitaraman had said: "In our third term, we will carry out factor market reforms - ie, land reforms and labour reforms". What will happen to them now?

One view is: "Now it is a coalition government - so forget about economic reforms". But the Vajpayee government (1998-2004) was also a coalition government. In fact, then BJP had only 182 seats - as against 240 seats today. And Prime Minister Atal Bihari Vajpayee did carry out economic reforms, including one of the toughest reforms of them all - privatisation (something which the Modi government with a clear BJP majority has not been able to do for 10 years - with the one exception of Air India).

So political will is more important than numbers. So the real question is: How strong is Narendra Modi's political will? In his first term, he carried out demonetisation and GST. In his second term, he tried to implement three agricultural reforms. Demonetisation was a mistake. GST was great - though its implementation could have been better. The three agricultural reforms were also great - but Modi underestimated the power of the Arhatiyas (middle-men) of Punjab and Haryana. All the three moves were politically very risky. So Modi is not short of courage. We can question the way he used his courage - but we cannot question the courage itself.

As for the coalition partners, the two biggest parties are Chandrababu Naidu's TDP and Nitish Kumar's JDU. Naidu has been one of India's most pro-reform Chief Ministers. Nitish may not be very pro-reform, but he is not fundamentally anti-reform either. In any case, land is a state subject and labour is a concurrent subject. So both land reforms and labour reforms will have to be carried out in partnership with the states. So a coalition government at the centre is not really an excuse for not carrying them out.

Finally the most important point is this: Narendra Modi wants to go down in history as India's greatest Prime Minister (currently this place belongs to P V Narasimha Rao - who carried out the 1991 economic reforms). And he can do that only if he carries out land reforms and labour reforms. And he knows this.

So let us cross our fingers and hope for the best . . .