This editorial from Bloomberg sums up the opportunity pretty well. Prime Minister Narandra Modi ran on economic reform, has been working to turn the tide against corruption in government, has won a large number of seats in Parliament in recent election, is poised to win his own reelection next time around, giving him an extraordinary opportunity to implement real economic reforms. India is the world's most populous democracy with relatively youthful demographics and need to create one million jobs per month
. This is not a table set for splitting up a fixed size pie. Like us, they need to grow their economy, big time. And if they do, what and important development that would be for the world economy and geo-politics and US foreign policy. For another post, India is a natural ally of the US IMO but that relationship keeps getting distracted and deterred by other rivalries and forces.
"The only way to do so at the pace and scale required -- with nearly a million new job-seekers entering the market every month -- is to get private investment flowing again and to crack open Indiaís ossified land, labor and other factor markets."
Private investment is the key to widespread employment growth. Who knew?
Modi's Chance to Reshape India's Economy, Bloomberg editors, MARCH 13, 2017
After his partyís triumph in the state of Uttar Pradesh, Indiaís largest and most politically important, Prime Minister Narendra Modi now wields greater power than any Indian leader in a generation. He will need it if he wants to continue to reshape Indiaís economy.
True, the results donít drastically alter the math in the upper house of Parliament in New Delhi, where previous reform efforts have stalled, and the polls themselves were hardly a referendum on market liberalization. Yet Modiís popularity is also inseparable from the pledge that won him office in 2014: to deliver the jobs Indiaís burgeoning population desperately needs (and thus far, isnít getting). The only way to do so at the pace and scale required -- with nearly a million new job-seekers entering the market every month -- is to get private investment flowing again and to crack open Indiaís ossified land, labor and other factor markets.
Some of this should now be more possible at the national level. Modi could, for instance, begin cleaning up and selling off inefficient state-run banks in order to unclog the investment pipeline. The opposition Congress Party could perhaps afford to be obstructionist when swathes of the electorate had real doubts about Modiís agenda. Facing a clear consensus in favor of good governance and faster economic development, and lacking any credible leader to rival Modi, the party will have a harder time blocking reforms.
More important, Modiís Bharatiya Janata Party now controls territories comprising more than 60 percent of Indiaís population. That grouping presents an ideal testing ground for difficult land and labor reforms. While some measures have been attempted thus far, they havenít been as far-reaching or as coordinated as they could be. Modi can change that by pressing state leaders to combine their efforts and resources into a more ambitious liberalizing agenda.
None of this is to say that Modiís recent focus on cleaning up politics and the economy isnít worthwhile, or that smaller reforms -- opening up more sectors to foreign direct investment, say -- arenít welcome. Itís critical that the rollout of an already approved nationwide goods-and-services tax proceed swiftly and smoothly. Modi will have to be careful, too, to keep a check on more extreme voices in the BJP, who may take the partyís electoral success as license to promote a more hard-line religious agenda.
But with this victory, and facing the great likelihood of a second term in 2019, Modi has a renewed chance to give India the future its young and eager population deserves. He needs to seize it.