A humbled Modi returns to power — What lies ahead
A HUMBLED MODI RETURNS TO POWER — WHAT LIES AHEAD
WRITTEN BY DR MANALI KUMAR AND CHETAN RANA
21 June 2024
After the unexpectedly sobering election results, Narendra Modi has assumed his third consecutive term in office, only the second person to earn this distinction after Jawaharlal Nehru, the founding prime minister of India.
The recently announced Cabinet signals continuity on most major policy issues. The Union Ministers for Home, Commerce, Finance, Transport & Highways, Railways, Defense, and External Affairs have all retained their portfolios, indicating that the new government will continue its focus on expanding infrastructure and enhancing India’s international status. However, the BJP could be far more constrained in its third term given its dependence on allies Telugu Desam Party (TDP) and Janata Dal (United) (JDU).
Although both parties are long-term members of the ruling National Democratic Alliance (NDA) and have thrown their support behind the BJP, both have also left the alliance in pursuit of their political interests in the past. Given their criticism of some of the BJP’s policies in recent years and the importance of minorities for their electoral success at the state level, their continued support is not guaranteed.
The stability of the coalition government, and indeed, the BJP’s political fortunes, will depend not only on its ability to offer ambitious policy solutions to some of the most critical challenges facing India but also on Modi’s ability to work with and satisfy key allies.
India’s persistent Achilles heels
Modi’s rise to power in 2014 was based on strong anti-incumbency against the Congress-led UPA government, a popular anti-corruption movement, and his narrative of effective and clean government. Ten years on, with two successive terms of majority governments, Modi was confident of securing over 400 seats in the lower house this year, yet, the voters’ mood has proven hard to predict.
Although the BJP emerged as the biggest party with 240 seats, it crucially missed achieving the 272-seat majority mark and has been forced to form a coalition government. Meanwhile, the opposition alliance, INDIA, has secured a moral victory by winning 234 seats, gaining over 100 seats on their tally in 2019. What explains the BJP’s poor performance?
The fastest-growing major economy, India is also the world’s fifth-largest economy and home to 200 billionaires, up from 101 in 2017. However, although inequality has been increasing since the 1980s, wealth concentration has increased at a higher rate since 2014, with only 10 per cent of Indians owning 77 per cent of all wealth. Meanwhile, wages for the workforce have increased by less than 1 per cent from 2014-15 to 2021-22. Although the government claims to have brought 250 million people out of poverty over the last decade, the fact that nearly 60 per cent of the population depends on subsidised grains for their daily consumption, and the country reportedly has the world’s third highest prevalence of zero-food children, are a testament to the economic hardships faced by the masses.
After a decade of sliding towards authoritarianism, a return to coalition politics promises a path to redemocratisation. Without a clear majority, the BJP can no longer bypass parliamentary scrutiny.
Despite strong GDP growth, India's welfare expenditure over the past 10 years has remained low and stagnant, exceeding 3 per cent of GDP only during the COVID-19 years. The previous Congress-led government’s schemes, protected by law, faced budgetary neglect under the BJP. Programs like Mid-Day Meals and Integrated Child Development Services’ real-term funding has declined by 40 per cent since 2014-15. The BJP’s welfare spending never surpassed 1 per cent of GDP, leading to only modest achievements in ‘private goods’ like LPG usage, open defecation reduction, and housing improvements. Meanwhile, spending on ‘public goods’ such as health and education has taken a backseat.
Although gross school enrollment has been increasing, the quality of infrastructure, teacher-to-student ratio, and learning outcomes remain concerning, particularly in rural areas where literacy and maths skills are alarmingly poor. Despite promising in 2014 to increase education spending to 6 per cent of GDP, the BJP government allocated an average of merely 0.44 per cent from 2014 to 2024, lower than the Congress-led government’s allocation of 0.61 per cent from 2004-2014. The government's approval of the National Education Policy 2020, the first since 1992, faced significant criticism for promoting privatisation, digital classrooms lacking basic facilities, and options that might encourage dropouts, while failing to include marginalised communities. Changes to school textbooks since 2017, including the removal of content on the Mughal era, the caste system, and Darwin’s theory of evolution, have been seen as aligning education with the Hindutva worldview.
The Modi government has been prioritising infrastructure spending with over USD 130 billion allocated this year (up 11 per cent) to help maintain around 7 per cent GDP growth. This is helping to create jobs — the workforce involved in construction increased from 10.6 per cent in 2011-12 to 13 per cent in 2022-23, with over 70 million Indians currently employed and expected to exceed 100 million by 2030. However, most of these jobs are low-quality and underpaid, with over 83 per cent being casual labour and 11 per cent self-employed. Growth in farmers’ incomes has also slowed over the last decade. Unfortunately, despite the ‘Make in India’ (2014) and ‘Atmanirbhar Bharat’ (2020) initiatives launched to boost manufacturing, not only has the sector failed to expand its share of GDP but jobs in the sector have also been decreasing since 2016. Foreign direct investment is at a two-decade low, private sector investment has been declining as a proportion of GDP, and the economy is largely driven by government investment.
Despite boasting one of the world’s youngest populations, India is yet to benefit from its demographic dividend. The country faces an endemic unemployment problem primarily among educated youth, with graduates experiencing a jobless rate of 29.1 per cent, compared to 3.4 per cent for the illiterate, while unemployment among youth with secondary education or higher doubled from 2000 to 2022, reaching 65.7 per cent. This mismatch between labour force skills and market demands highlights issues in India's education system and the economy's inability to create sufficient non-farm jobs. Women in urban areas are particularly affected, with educated women facing higher unemployment rates. The rise of gig jobs adds to the challenges, as temporary, low-paying employment grows, impacting workers' well-being and working conditions.
Towards coalition pragmatism?
How coalition politics might influence, and whether it may constrain, the BJP’s Hindu nationalist agenda will be one of the most important trends to observe in the coming months. This year’s election campaign was particularly vicious, with Modi and other candidates engaging in hate speech against Muslims and fear-mongering by pushing fake narratives about policies the opposition may implement if elected. Since both TDP and JDU have usually garnered considerable support from Muslim voters, supporting the BJP may put them in an uncomfortable position. TDP members recently reiterated the party’s continued support for Muslim reservations in the southern state of Andhra Pradesh following Modi’s comments about not extending reservations to Muslims while on the campaign trail. Muslim groups in the state had also launched a social media campaign warning against voting for TDP given its alliance with the BJP.
Despite the early murmurs of NDA allies seeking key portfolios in the Cabinet, the final allocation signals that TDP and JDU have agreed to take a backseat at the union level in exchange for potential favours at the state level. However, coalitions in India are arrangements of convenience rather than conviction. Although the TDP has been a regular member of the NDA, it called for Modi's resignation after the 2002 riots and exited the NDA after the 2004 election defeat. The TDP left the NDA again in 2018 due to the BJP's failure to grant special status to Andhra Pradesh, a key TDP demand that may gain traction in the coming months.
Ahead of the 2025 Bihar assembly elections, Modi has inducted eight members of parliament from Bihar into his council of ministers, focusing on balancing caste equations to boost the NDA's prospects. The JDU, currently the third-largest party in Bihar, has been given two Union Minister positions. Despite being seen as a minor BJP partner in the Lok Sabha elections, the JDU outperformed expectations, and Nitish Kumar is likely to seek another term as Chief Minister, making the caste considerations crucial for the NDA. JDU may push the BJP to agree to conduct a nationwide caste census and demand special status so it can have greater access to central funds for welfare schemes.
Both allies are likely to continue supporting the Modi government’s push for building infrastructure and ‘new welfarism’ approach of subsidising essential goods and services typically provided by the private sector, rather than prioritising traditional public goods like health and education. For example, the TDP’s manifesto promised a range of benefits, including free travel for women in RTC buses, three free gas cylinders per year, and USD 240 annual investment support for farmers among others. However, other BJP policies may face resistance. The JDU has raised concerns about the Agniveer scheme, a short-term defence personnel induction program aimed at reducing the personnel expenditure and age profile of the armed services, and has called for a detailed discussion to address public concerns about the scheme's shortcomings. The allies also have different opinions on introducing a nationwide Uniform Civil Code — one of the BJP’s few remaining core agenda items.
From rhetoric to reality
India today finds itself at a pivotal juncture. Modi and the BJP have been trying to establish a stronger national identity for India’s Hindu majority, but their strategy — based on promoting a narrative of victimhood — is inherently divisive. Although Modi was successfully re-elected this year, his vote share dipped to 54.2 per cent compared to 63.6 per cent in 2019. Nehru, the only other Indian politician to be re-elected for a third consecutive term in office did so with a vote share of 58.9 per cent in 1962, up from 38.6 per cent in 1957. Given the sole focus on Modi and his leadership in the BJP’s electoral campaign — indeed every single campaign promise in the party’s election manifesto was presented as ‘Modi’s guarantee’ — the outcome indicates a loss of favour and faith in the prime minister’s abilities to deliver on his promises.
The NDA government has built a reputation as a big welfare spender by renaming and taking credit for existing programs, while simultaneously cutting funds to pre-existing welfare structures without providing adequate replacements. However, persistent unemployment, stagnant wages, a sluggish manufacturing sector, and revelations of corruption have contributed to rising popular discontent. Indeed, Modi’s second term saw the lowest GDP growth since liberalisation in the early 1990s, and per capita income growth has been half that of the previous decade under former Prime Minister Dr. Manmohan Singh. Beyond maintaining positive sentiment about the country and its international status, mitigating these challenges will be crucial for the BJP, especially as it prepares for state assembly elections.
After a decade of sliding towards authoritarianism, a return to coalition politics promises a path to redemocratisation. Without a clear majority, the BJP can no longer bypass parliamentary scrutiny, and with an emboldened opposition, it will be harder to avoid debate and consensus building. India has for decades been a country with much potential; despite many promises and some progress over the past ten years, the country is yet to take off. Whether this time will prove to be different remains to be seen.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biographies
Dr Manali Kumar is the Editor-in-Chief of 9DASHLINE, and a Postdoctoral Associate with the Institute of Political Science at the University of St Gallen. Her research explores India’s national identities and interests as a rising power.
Chetan Rana is a PhD candidate at the Centre for International Politics, Organisation, and Disarmament (CIPOD) at Jawaharlal Nehru University, New Delhi and Associate Editor at 9DASHLINE. He also holds a master's degree in Politics with specialisation in International Studies from the School of International Studies, Jawaharlal Nehru University. He writes on issues concerning the Indo-Pacific, populism, Indian foreign policy, and Myanmar. Imade credit: Wikimedia/Prime Minister Office GODL-India.