As you all know, PM Modi is going to take oath as the Prime Minister of India for the third consecutive time and this is going to happen for the second time in the history of India after 60 years. Earlier it was Jawahar Lal Nehru who had taken oath as the Prime Minister of India three times in a row.
Well, as Modi 3.0 begins let’s see how it will impact the economy and the foreign policy of the nation as this will be coalition government.
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Where does the Economy Stands as Modi 3.0 begins?
Narendra Modi is all set to become the PM for the third consecutive term when a full-strength team comprising all NDA partners will take oath along with Modi at the swearing-in ceremony in the presence of leaders of South Asia.
PM Modi is starting his third term on strong footing when the economic growth is rising, inflation is relatively down and there is optimism all around about India’s future as a manufacturing power even as there are concerns over jobs and rural demand ( Rural demand refers to the consumption of goods and services by the people who lives in rural areas like villages). As India’s most of the population lives in rural areas, it’s important to increase rural demand for the economy to grow faster.
Economic Growth
The provisional estimates of National Statistical Office (NSO) placed India’s real gross domestic product (GDP) growth at 8.2% in 2023-24. During 2024-25 so far, domestic economic activity has maintained resilience. The increasing level of domestic demand is driving the growth of manufacturing activities.
The eight core industries (Cement, Coal, Crude Oil, Electricity, Fertilizers, Natural Gas, Refinery Products and Steel) posted healthy growth in April 2024. Purchasing manager’s index (PMI) in manufacturing continued to exhibit strength in May 2024 and is the highest in the world.
Rural Demand
The demand under Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) declined by 14.3% in May 2024, reflecting continued improvement in farm sector employment.
Tractor sales decreased from 22.9% in Q4 2023–2024 to 3% in April 2024 which reflects that rural population is looking for other types of employment besides farming. FMCG volume growth which was lagging the urban demand has picked up since Q2 of 2023-24 and overtook it in Q4 2023-24.
Investment
Investment activities continues to gain traction on the back of ongoing expansion of non-food bank credit (Non-food bank credit refers to the credit extended by banks to sectors other than the agricultural sector and the food industry).
Construction sector activity posted a robust growth of 8.7% in Q4 2023-24. Steel consumption expanded by 11.3% in May and cement production rose by 0.3% in April. These data shows that people are investing in India. They are constructing factories and homes which eventually contributes to India’s economy.
The government led infrastructure development, continued support under the Production Linked Incentive Scheme and other make-in-India initiatives are supporting public investments.
Inflation
Retail inflation softened during March-April this year, though persisting food inflation pressures offset the gains of disinflation in core and deflation in the fuel groups. Despite some moderation, pulses and vegetables inflation remained firmly in double digits. Vegetable prices are experiencing a summer uptick.
What Are The Main Challenges In Foreign Policy for Modi 3.0?
After 2014, India’s foreign policy style has been more assertive and it gave a sense of aggressive diplomacy when Dr. S Jaishankar became the Foreign Affair Minister, perhaps, the best Foreign Minister in the world right now. The way India stands with it’s national interest in the last 10 years is remarkable as the world order is very dynamic. Let’s see what are the challenges India’s foreign policy have to face.
China and Pakistan
China is currently the biggest threat and enemy of India as it possess a lot of challenges for India.
- It has done a huge deployment of its soldiers near LAC since 2020 in response to which India has also deployed its troops near LAC.
- Many MNCs slowly ditching China for manufacturing and started to settle in India which is not easy for China to digest.
- Sri Lanka was caught in China’s debt trap and lost it’s Hambantota Port to China which possess a huge threat to India’s security. China’s increasing presence in the Indian Ocean is not in the interest of India’s national security.
- Pakistan on the other hand always try to destabilise Kashmir especially after the abrogation of Article 370. Pakistan always helps its terrorist to infiltrate into Kashmir with the help of ISI for heinous terror attacks.
- There is also an outrage in PoK for independence and merger with India because the Pakistani establishment has done a lot of discrimination with the PoK residents. So it will be interesting to see how the foreign policy of India tackle this problem along its border.
Read more about “We will absolutely take PoK back, it belongs to us”-Amit Shah in a rally.