In delving the report card of Narendra Modi, who has already crossed the half way mark of his tenure, the lackluster performance in the economic and financial sector seems to be the reality. It has been estimated that mere 18 percent of the promises made by BJP in the election manifesto could be achieved by Modi. However, efforts are on with works in progress towards fulfilling 52 percent of the manifesto checklist. One can argue that Modi, despite his unkempt promises, still saw overwhelming victory in India’s biggest state, Uttar Pradesh. The factors that contributed to such victory were the reduced corruption levels, especially compared to the previous regime; and the demonetization, a move that was an instant hit with the middle classes despite some significant pitfalls.
Under Modi, India’s economic performance has experienced major setback due to demonetization move and then nose diving manufacturing and IT majors. The demonetization has left the poor people of India in a tizzy that led to lesser amount of the economic activity. This has shown to be the catalyst of decreasing growth rate and lower and plunging financial market. The major stock markets of India including the BSE and NSE have dipped by many miles. The manufacturing sector was also affected because of the demonetization move. The Manufacturing PMI of the Nikkei India fell from 54.4 in October 2016 to 52.3 in November 2016. Moreover, Modi’s dream of ‘make in India’ never quite took off. In 2017, till date the manufacturing growth rate has been hovering around minus 2.1 percent. Modi tried to replicate the Chinese model that fell flat on its face. The manufacturing major Larsen & Toubro have lain off 14,000 employees recently, which the management of the company described as a strategic decision.
Equally worrying situation is the mass scale lay off of the IT majors across the country. India has often boasted its IT sector as one of the best in the world. The Cognizant, Wipro, Capgemini, and TCS – all are laying off in massive scale. The French IT major, Capgamini have retrenched 9,000 employees, the Cognizant have fired or likely to fire 6,000-10,000, Tech Mahindra laid off 1,500 employees, Dell Technologies are firing the overlapping positions on a massive scale… the list goes on unabated. The reason for such massive retrenchment can be attributed to the Donald Trump’s catastrophic policies, although this not the only reason. The lack of domestic demand on the IT services have contributed too, for such as situation. The lacking demand for IT services can to a large extent be due to the lack of growth in the manufacturing sector as this sector can generate large scale demand for such services. And off course, Trump’s protectionist rhetoric.
With two major economic sectors of India in doldrums, the growth in the job market is hard to come by. Although, BJP won the UP election on emotive issues such as protection of cows, caste equations, corruptions and Pakistan, the financial conditions of most remains as it is. Modi’s ‘achhe din’ remains as elusive as ever while Modi’s score card does not look very bright either. Some paradigm shifts in the policies of the incumbent government is needed for sustainable development of India.