A Decade of Modi-nomics

26 May 2014. 

Results of the 2014 Lok Sabha elections were announced on and Bhartiya Janta Party-led coalition NDA achieved a landslide victory with Bhartiya Janta Party alone attaining the absolute majority. With this election came the end of the Congress rule and India had their new face, Prime Minister Narendra Modi. After more than a decade now, Modi is still the Prime Minister of India and the Indian economy has gone through some serious twists and turns during his regime. 

When Modi came to power, India’s economic growth was sluggish. A series of high-profile corruption cases led to a loss of investor confidence in the Indian economy but between 2014-2022, India’s gross domestic product (GDP) per capita rose 40% in 8 years. However, the Demonetisation, an ill-advised attempt to take 500 and 1000 rupees out of the economy led to cash shortages and slowed down the economic growth. According to the International Monetary Fund, the Indian economy is projected to grow at 6.5% faster.  

After the ‘Make in India’ programme, the Indian export increased from $375 Billion in 2011 to a whopping $770 Billion in 2023. This scheme also made India self-reliant (Atmanirbhar Bharat) turning India from a consumer-only economy to a global manufacturing hub. 

The ‘Digital India’ initiative played a vital role in transforming India into a digitally powered economy. One of the most significant outcomes was the launch of the Unified Payment Interface (UPI) which reshaped the way Indians transact. Not just UPI, from banking issues to toll collections everything was reduced to our pocket. In a country where a significant portion of the population is illiterate, it is commendable on the part of the government to transform the economy digitally. 

Startups are the flag bearer of a successful economy. Countries like South Africa, China, and Japan have all turned out to be successful economies because of the start-up culture. The start-up India initiative played a pivotal role in fostering the startup culture in India. It created more than 15 lakh direct jobs which is a blessing for a country like India. It is a testament to how innovation, backed by the right policies can drive economic development while solving pressing challenges. 

India was hit hard by the COVID-19 pandemic. It suffered a sharp drop in GDP. The financial year 2020/21 was the worst in terms of economic contradiction in the country’s history. Talking about unemployment rates, India performed relatively poorly and has still not recovered particularly from the unemployment issue. As the pandemic restrictions were lifted, the Indian economy geared up for the recovery mode and has made significant growth since then. 

As the Modi government continues its 3rd term in office, generating employment and eradicating income inequality continue to be a key challenge in the economy which the government needs to find a solution for in their current term.