With the chances of BJP’s return to power through the Lok Sabha elections brightening in the wake of the successful retaliation against the Pakistan-based Jaish-e-Mohammed which had snuffed out 40 lives in a suicide bomber’s attack on a bus loaded with CRPF personnel, speculation is rife on what a second term for the Narendra Modi government would mean for the country.
In 2014 when the BJP stormed to power routing the Congress party, Modi was a rare prime minister who was unexposed to the ways of a Central dispensation. It was the long and generally well-rated stewardship of the Gujarat government that had catapulted him to the peak in New Delhi and Modi had a task on hand to quickly adapt to the politics of Parliament.
As chief minister in Gujarat Modi had been on the other side of the fence, representing the cause of the State before a Centre that was deemed to be weak and listless under Dr Manmohan Singh who was a puppet on a string dancing to Sonia Gandhi’s tunes.
Modi was known to fight vociferously on issues that bedevilled the State and there was an uncanny spark that characterised the Modi rule. His critics, and there were many, berated him primarily on the infamous communal record of his government, especially the way the Muslims were targeted by mobs after the train burning incident which charred and choked to death many kar sewaks who were returning from Ayodhya in Uttar Pradesh. The demonetisation of high denomination currency showed up Modi’s penchant for risk-taking and dare devilry. That demonetisation was a fiasco is today a largely-accepted fact. Modi may not recognise it publicly but it is undeniable that the move was ill-conceived and poorly handled.
In his second term, Modi would indeed do well to at least recognise in his heart of hearts that demonetisation was a mistake for which he had not prepared the system to respond positively. On a positive plane, it was the result of Modi’s governance that the corruption of the erstwhile UPA regime gave way to a relatively-clean administration in which the prima donna called the shots with some positive results.
If there was one thing that Modi could be identified by, it was that he proved a strong leader both nationally and internationally. Congressmen may rant today about ‘surgical strikes’ having been undertaken by their governments too in the past, but there is no denying that Modi’s response to Pakistani excesses through terror has been muscular and decisive unlike the hamhanded Congress approach. This evidently will give the BJP the edge that it needs to storm back to power in style in a couple of months from now.
One aspect of speculation that is doing the rounds feverishly is how the Indian stockmarkets would react if the Modi government returns to power. It should cause little surprise that a renewed bull run is being predicted. A key factor would be earnings growth. When a company delivers robust growth in earnings, the stock price is destined to rise higher.
Another factor that drives stock prices higher is the expectation of higher future earnings. Stock prices rise ahead of earnings, resulting in an expansion of the valuation multiple. Most of the gains in stock prices over the last five years have come from expansion in valuations in anticipation of higher future earnings.
Another factor in driving stock prices higher is liquidity conditions. If money keeps pouring into the stock markets, stock prices are likely to trend higher. The key driver of the bull run in 2017 was a flood of domestic liquidity into the Indian stock markets.
Predictably, bolstered as he would be by five years of crucial experience as prime minister, the Modi government would move on with renewed credibility and force. It would feel bold to take steps to usher in another generation of economic reforms. This would be the opportunity to include in the new scheme of things greater talent in the Cabinet. The current Modi government has had a dearth of talent which needs to be augmented.
Domestically, Modi needs to redeem and honour his promise to effect measures to flush out black money. While demonetisation was a vehicle through which he sought to do that unsuccessfully, he should perhaps be better equipped to do that with new insights on how the Indian penchant for black money needs to be tackled.
Union Minister Nitin Gadkari is doing good work in improving physical connectivity through a network of highways and other roads. With improved infrastructure must come new industry which requires a vigorous push. Steps to boost farm productivity and cropping patterns must also get the attention they deserve. There is all-round effort required to improve the quality of public services. This is an area that is dependent on sharper accountability in all walks of life to ensure better compliance.
While it is unclear whether the NDA would manage to win a majority or it would have to depend on outside crutches, there can be little doubt that a second term for the NDA per se would entail greater stability for the country than a government of the Congress and other Opposition parties glued loosely together on the basis of hatred for the BJP without a viable alternative programme.
Kamlendra Kanwar is a political commentator and columnist. He has authored four books.
