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India à la Modi
Economic Troubles Pressure Modi

India’s Prime Minister Narendra Modi has been struggling to pass economic reforms since he took office in 2014. Yet, despite his troubles, he continued to poll well. Pew found that 87 percent of Indians liked Modi a year ago, even after his reform agenda had stalled.

But last fall, Modi’s Bharatiya Janata Party lost big in regional elections, and India watchers began wondering if his star power was waning. Now, Reuters reports that economic problems are adding their own pressure:

Education costs have risen 13 percent, housing 10 percent, healthcare 14 percent and electricity 8 percent since Modi took charge in May 2014, time series data on CPI inflation collected by the Ministry of Statistics showed.

That puts a disproportionate strain on middle class incomes, with education costs accounting for 7 percent of urban households’ monthly spend compared with 3.5 percent of rural households, data showed.

Food and beverage prices, meanwhile, which account for more than a half of the CPI basket, fell 10.5 percent since Modi’s election victory, although there, too, items like milk and eggs favored by middle income Indians have actually risen.

Owners of motorcycles and cars are further upset that the government took away some windfall gains from falling oil prices in the form of taxes, and people across the country are cutting back on discretionary spending as expenses outstrip earnings.

Although the increases look somewhat better after accounting for inflation, these are bad signs. The article quotes several Indians who say their patience for Modi is starting to run out. We think it’s better to wait for some polls, at least, before drawing any conclusions and there are a couple regional elections in the fall which will be worth watching. But until then, we’d be keeping an eye on the fight between BJP nationalists and liberal secularists. That seems to be where the action is these days—and it can give us a sense of how restless Indians might be getting.

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  • Anthony

    “…we’d be keeping an eye on the fight between BJP nationalists and liberal secularists.”

    There are not just economic troubles for Narendra Modi: “what I want to say is that Narendra Modi (BJP) has moved away from the promises made in the election. The Modi regime is creating a false debate in this country.” Like other places in the world, India ( Modi/BJP) faces challenges. thediplomat.com/2016/03/interview-kanhaiya-kumar-on-indias-challenges-under-narendra-modi/

  • Andrew Allison
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