Scoring the First 100 Day Agenda of Modi’s Second Term

On September 8, Indian Home Minister Amit Shah tweeted that “Within 100 days of Modi 2.0, PM Narendra Modi has taken several historic decisions, for which every Indian had been waiting since 70 years.” Not only did government officials outline specific decisions to be made early in the government’s tenure, the prime minister himself held a meeting with all of his secretaries, or the top bureaucrats, and asked them to prepare to at least one “impactful decision… for which approvals will be taken within 100 days.” 

However, given the promises made, the government’s record in its first 100 days has been mixed. 

Promises Made

While the government made no single list of promises to achieve within the first 100 days, statements by government officials and members of the ruling Bharatiya Janata Party (BJP) gave some insights into what the returning government’s immediate priorities were. Rajiv Kumar, the head of the National Institute for the Transformation of India (NITI Aayog), the government’s in-house think tank, stated that the first 100 days would see progress on a number of long-pending “big bang” reforms. These included “changes in labor laws, privatization moves, and creation of land banks for new industrial development.” Among specific measures outlined by Kumar were measures to simplify India’s labor laws from the current 44 laws into four codes, as well the privatization or closure of 42 state-owned companies, including Air India.

The prime minister had also hinted before the elections that he would expand his flagship scheme for farmers, the Pradhan Mantri Kisan Samman Nidhi, or PM-KISAN, particularly given the distress faced by farmers in the lead-up to the 2019 general elections. In further promised reforms, the new minister for telecommunications under Modi 2.0, Ravi Shankar Prasad, also promised that India would begin 5G trials within the government’s first 100 days. Further planned reforms announced by the government included reducing the corporate tax rate, further liberalizing India’s foreign investment regime, announcing a new education policy, creating progress on infrastructure projects, and releasing a new industrial policy.

Successes and Promises Kept

Facing such an ambitious agenda, the Modi government commendably did move quickly to achieve some of the promised reforms. As part of the first meeting of the Union Cabinet under Prime Minister Modi’s second term, the government announced that it would expand the PM-KISAN scheme, offering a $83.95 (Rs. 6,000) direct benefit, to all 145 million farmers in India. Previously, the scheme was restricted to farmers holding land up to two hectares. Another key promise that the government fulfilled in its second term’s first 100 days was announcing in its first full budget that they would reduce the corporate tax rate from 35 percent to 25 percent.

The government also announced a slew of foreign direct investment (FDI) changes, including allowing 100 percent FDI under the automatic route for contract manufacturing, coal operations, and insurance intermediaries. The government also relaxed local sourcing rules for single-brand manufacturing, and allowed 26 percent FDI in digital media news. In addition, the government released the National Education Policy 2019 and opened it up to public comment. This long-standing promise by the Modi government, first made in the lead up to the 2014 election, updated India’s National Education Policy for the first time since 1992. Therefore, the government made measurable progress on the number of promises it had made for its first 100 days in office. 

Setbacks and Promises Left Unfulfilled

Despite this progress, however, the government also left its fair share of promises unfulfilled and policies reversed within its first 100 days. Among the earlier promises made by government officials in Prime Minister Modi’s second term was Kumar of NITI Aayog’s promise of “big bang” reforms within the first 100 days. The prospect of these reforms, while exciting, never really materialized. Of the 49 bills considered and 28 bills passed in the Budget Session from June 17 to July 26, 2019, only one bill on labor reforms – related to wages – was passed, but it was not signed into law. The remaining three codes remain either in draft status or were introduced but not passed by either house of Parliament. Moreover, no new law on the creation of land banks for new industrial development seems to have been introduced in Parliament during the government’s first 100 days.

On privatization, as well, the government only took modest steps. While the finance minister did announce the merger of 10 public sector banks into four large banks, this development falls well short of the privatization of 42 companies, including Air India, promised by Kumar. Furthermore, the lack of progress is notable given that NITI Aayog was tasked with outlining which companies the government should disinvest from in 2016, and that it has prepared five lists of companies which have all been ignored by the government. In addition to “big bang” reforms, the government had also promised that it would begin 5G trials within the first 100 days of the government. However, as of writing, no announcement has been made by the Ministry of Telecommunications that 5G trials have begun, and what companies have been invited.

Beyond the lack of progress on promised reforms, the government also had several setbacks in its first 100 days. The release of the official estimates of India’s GDP growth from April-June 2019 showed that the country’s GDP grew only at 5.0 percent, the lowest growth since the first quarter of 2012-2013. Moreover, the government’s announcement, and subsequent withdrawal, of a set of policies put forth in its first budget suggested a lack of consistency in the government’s approach to the slowdown. Indeed, the finance minister, in the government’s first budget, announced that the government would levy an additional surcharge on capital gains from domestic and foreign portfolio investors, as well as levy a new angel tax on start-ups. However, in a press conference held on August 23 to address the economic slowdown in India, the minister withdrew both of these policies. These setbacks and unfulfilled promises show how the government’s record on its promises was mixed at best.

To mark the completion of the first 100 days in his second term in office, Prime Minister Modi said that the “country has seen only [a] trailer in last 100 days while the whole picture remains to be seen.” However, the government’s performance on the promises it made shows that it had a mixed record and has yet to make progress on the “big bang” reforms. While the government did indeed make a number of major decisions, it should reflect on the decisions it couldn’t make progress on to ensure the “whole picture” beyond the first 100 days builds upon, and outperforms, the trailer.