Given PM Narendra Modi's mixed track record on economy, it's unclear whether his party will be able to replicate in 2019 the landmark electoral success it achieved in 2014. A setback at the polls remains a possibility.
Five years ago, when Narendra Modi took over as prime minister, he promised to usher in "a new era" in India and "good days ahead" for India's people.
Expectations ran high after Modi's Bharatiya Janata Party (BJP) scored a remarkable electoral victory. For the first time in three decades, a single party managed to win a parliamentary majority in the vast South Asian country, home to the world's second-largest population. Modi and BJP supporters declared that it marked the dawn of a "new India."
During his 2014 election campaign, the BJP repeatedly trumpeted Modi's track record in the economic development of his native state of Gujarat — where he had served as chief minister from 2001 to 2014 — promising to repeat the performance nationwide, if voted to power.
Modi pledged to create millions of new jobs and tame persistently high inflation. The election outcome gave him a strong mandate to govern, and high hopes were pinned on his administration to turn around the nation's economic fortunes and deliver on his twin promises of development and good governance.
Modi's administration inherited an economy that was growing at the slowest pace in a decade, with GDP expansion plummeting to around 4-5% from the near double-digit growth rates several years ago.
Given its strong mandate, many hoped the Modi administration would be able to implement the much-needed, yet difficult, economic reforms, including overhauling the labor market and streamlining land acquisition policies.
Boosting those hopes further was Modi's record as chief minister of Gujarat. While governing the state, Modi cultivated his image as a business-friendly administrator, cutting bureaucratic red tape, cracking down on corruption and offering land to the private sector at concessional rates.
At the national level, though, his economic record appears mixed. Under Modi's leadership, India emerged as the fastest-growing major economy in the world, with its economic output expanding by 7% plus annually.
The ease of doing business in India has also improved significantly over the past several years, with Modi's government rolling out a series of major reforms that made it easier for firms to get construction permits, pay taxes and trade across borders. In fact, India has risen 65 places in the World Bank's rankings of the ease of doing business since 2014.
Modi's government also managed to end some fuel subsidies and passed a new insolvency and bankruptcy code for firms, which replaced a web of archaic laws. Furthermore, it raised caps on foreign investment in sectors like defense and insurance, and tried to court foreign direct investment.
But Modi, critics say, has shied away from reforming India's onerous labor laws or privatizing troubled public enterprises. The government has also not succeeded in resolving the banking system's bad loans problem.
The Modi administration's crowning economic achievement was to implement a nationwide value-added tax, the Goods and Services Tax (GST), which the previous Congress-led government had proposed. Although the GST was a landmark legislation that overhauled and streamlined India's indirect tax regime, it has been burdened by a complex infrastructure and criticized by both individuals and businesses for pushing up prices.
Modi also sought to make India's economy cashless. His decision in 2016 to abruptly withdraw all high-denomination banknotes from circulation was a shocking move that disrupted the Indian economy. The aim of this move, which came to be known as "demonetization," was to wipe out "black money," piles of ill-gotten cash stashed outside the banking system.
But some economists criticize demonetization as a "colossal policy failure." And the country's central bank revealed that nearly all demonetized currency had returned to the system, which meant that either there was no significant black money, or hoarders found a way to legitimize most of their ill-gotten cash.
Jobs are scarce
The GST and demonetization were expected to be game-changers that would restructure the Indian economy, but they caused widespread disruption and dented growth.
Critics also claim that the Modi government's policies have failed to generate enough jobs for the millions of young people entering India's labor force each year. They say the government's ambitious Make in India project has failed to take off. It was intended to transform India into a manufacturing hub and increase the share of domestic manufacturing from 17% of gross domestic product to about 25%.
Other big economic projects like Digital India, Skill India and Smart Cities still haven't received the policy support promised, say analysts. "Most people in India are unemployed, or perhaps misemployed, and employment guarantee is still a distant dream," Jean Dreze, a development economist and activist, told DW in February.
This view is shared by Shailendra Kumar Rai, a finance professor at the Management Development Institute Gurugram. "India's economic growth rate has been impressive, but this growth is without employment," Rai told DW. "India is a country where over 60% of the population is under 35 years of age, and every year 10-12 million people are entering the workforce," he explained. The government has failed to train the youth and make them employable, Rai said, adding: "We have not been able to use our demographic dividend."
Furthermore, India has witnessed outbreaks of rural discontent over the past several years, with millions of the country's mostly small-scale farmers squeezed by falling prices for their crops and the rising transportation and storage costs.
Farmers have repeatedly staged large demonstrations, accusing the authorities of failing to support their livelihood and demanding government assistance, including better prices for their crops and farm loan waivers. Agrarian distress poses a challenge to PM Modi, who promised to double farm incomes by 2022.
A criticism leveled by opponents against the Modi government is that it has emphasized GDP growth at the expense of human development.
But in 2018, Modi's government launched the world's largest publicly funded health insurance scheme, which it said would benefit some 500 million poor people. The program promised health cover worth 500,000 rupees ($6,900, €6,146) to every poor family to treat serious ailments.
Though the government touted this as the world's largest free healthcare scheme, critics have questioned the decision to rely on an insurance-based system for providing healthcare to the nation's poor.
Additional reporting by Mahesh Jha.