The unprecedented sweep in recent elections by National Democratic Alliance (NDA) propelled by BJP under the leadership of Prime Minister Modi was clearly a manifestation of growing discontent of voters with the performance of UPA-2 government in the last three years of its rule. The economic growth plummeted to around 4.5% per annum compared to 8 to 9 % that the country achieved over the past several years; inflation soared to double digits; unemployment turned rampant and the country was beset with news of scams which seemed to uncover with embarrassing frequency.

Not surprisingly, people’s expectations swelled in the aftermath of elections. They believed that Prime Minister Modi would wave his magic wand and set things right before long. His track record in Gujarat added grist to the mill. Thus, even though Mr. Modi’s government has barely completed five months of rule, people are sitting on judgement on whether Mr. Modi has performed to their expectations or not.

To be fair to Mr. Modi, India’s problems cannot be solved in a hurry. They are manifold. The challenge is not just reviving growth and containing prices, but more importantly, improving the quality of life of its vast majority of people. India, for example, ranks 135 among 187 countries in the world in the UN Human Development Index where, among others, such basic social variables like adult literacy rate, life expectancy at birth are considered. Government of India’s own data shows that more than one-fifth of India’s population lives below poverty line; only 43.5% of India’s households have access to drinking water and about 47% to latrine facility. And this, after 67 years of gaining independence.

At a very broad level, two sets of problems seem to be ailing India. The first relates to ease of doing business which includes elements like the time it takes to set up a business, archaic laws, regulatory hurdles, lack of transparency on natural resource allocation or environmental clearance, infrastructural bottlenecks, regressive tax structure and so on. In the latest World Bank rankings of countries with respect to ease of doing business, for example, India ranks a poor 134 out of 189 countries. The second pertains to implementation issues. For example, was the outcome commensurate with the money that was spent on an activity? Were there cost and time overruns? Did the benefit accrue to the target group? Did a mechanism to monitor, evaluate and take corrective action exist? On all these parameters, India lags behind.

While the two sets of factors mentioned above are not mutually exclusive, the former has a direct bearing on our ability to kick-start and sustain growth and the latter has a relationship to

our capacity to address social issues. Ironically, both have something to do with effective governance. Needless to say, Mr. Modi’s performance will have to be judged not on how he has been able to tinker with the economy here and there, but on his capability to create systems and institutions which will address the twin problems of growth and social justice on a long term basis.

The problems faced by successive governments in effectively addressing the issues can be traced to three reasons. First, it is true that some changes, like streamlining the government departments for better efficiency, allowing petroleum prices to be determined in the market place to attract more investment in the sector, reducing the size of subsidies to release more money for growth, tweaking the tax rates to make those more business friendly, recasting welfare programmes to make them more target oriented, disinvestment in Public sector undertakings and so on, can be effected through an executive order. But, since the political costs of such measures can be high, governments with fragile coalition and vested interests have shied away from carrying those out. A second set of changes requires legislative approval. These relate to modifying the tax structure, opening up certain sectors for foreign investment, land use legislation etc. Here too, frail majority and weak coalition of ruling parties came in the way of passing important bills in the parliament. The third and perhaps the most important reason for the hitherto tardy performance of our numerous programmes is that our federal structure stipulates that while the policy formation is the domain of central government, implementation rests with state governments. And, state governments have not always extended support if political equations failed to match.

NDA, on the other hand, is uniquely comfortably placed on all the three counts above. The government is already active on the executive front by announcing a spate of reforms ranging from restructuring the government to financial inclusion to improving health and sanitation and streamlining the subsidy schemes. With the majority it enjoys in the Lok Sabha, it should now be able get some important bills passed. Finally, the party seems to be sweeping one state election after another thereby creating a climate of more active support from the state governments on implementation of projects and programmes. In fact the party is so favourably poised to make a positive difference, that any other finish will be unacceptable.

Only, Mr. Modi will need to be alert on three fronts which, otherwise, can mar his initiatives. First, he has to nip in the bud any attempt by any overenthusiastic party member from making statements which can damage the social fabric of the nation. Second, while digitization and other technological improvements are essential for greater efficiency, they must go in tandem with skill up-gradation. Finally, he should prepare the economy for possibility of external shocks which will crop up from time to time as long as we are a part of an interdependent world.

A realistic assessment of Mr. Modi’s performance will have to await these outcomes.