Economic Distress Amidst Political Success: India’s Economic Policy Under Modi, 2014-2019

Narendra Modi came to power in 2014 promising robust economic management and more employment. The campaign promise of “maximum governance, minimum government,” created hope that Modi would transform India’s economy by removing obstacles to growth and job creation. We assess the Modi government’s economic policies from 2014-2019 focusing on salient initiatives like demonetisation, bankruptcy law, GST reforms, and “Make in India.” We argue that Modi’s economic policies must be understood, first and foremost, as a political strategy to build political support and ensure the BJP’s hegemony through the next decade. In addition, we show that Modi’s success in building his personal image as a decisive leader perversely triggered institutional changes such as centralization of decision-making and political management of information that diminished India’s state capacity and led to policies that failed to address, and in many cases exacerbated, India’s economic problems.