Poor monsoon has added to the fear of rising inflation and there is a hike in food prices. The economic slowdown in China and many European countries means declining commodity prices, which is good for India from the perspective of oil price, but bad for exports. According to the recent figures published by the Ministry of Commerce, the country’s exports fell in December last year for the 13th straight month.
How to tackle issues in rural India and farm sector will be another major challenge. In Maharashtra alone, 3228 farmers have committed suicide in 2015. According to government data, there has been a 60 percent increase in registration for the Mahatma Gandhi National Rural Employment Guarentee Scheme (MGNREGA), because of the burgeoning unemployment in farming sector due to the continous drought.
Compared to the 15 percent increase in rural wages in 2014, last year the wages only rose by 5 percent.
In February 2015, Modi said in Parliament, “I will ensure that MGNREGA is never discontinued. It is proof of your [UPA’s] failings that after so many years in power, all you were able to deliver was for a poor man to dig ditches for a few days a month.” However, this is after Modi government reduced 45 percent funds for MGNREGA in 2014.
Following the promises made in 2014 election rallies, Modi announced many projects aimed at generating employment and growth such as Swachh Bharat Abhiyan, Skill India, Digital India and Make in India. Startup India is the latest one in the list. However, the schemes would take more than 5 years to show tangible results in employment.
The government right now is in need of instant success. Take for instance, Haryana Chief Minister Manohar Lal Khattar’s statement in December on the state’s infamously low child sex ratio.
He said that the sex ratio has improved from 834 girls to 903 for every 1000 boys, giving credit to Modi for his 2014 January scheme, Beti Bachao Beti Padhao. However, many people question the credibility of the claim, saying such an increase within a year is unbelievable and unscientific.
The government’s recent plan to merge the existing Direct Benefit Transfer (DBT) scheme started by the previous UPA government with Modi’s Pradhan Mantri Jan Dhan Yojana (PMJDY) is an effort at piggy-backing on the laurels of its predecessor.
According to some reports, under PMJDY scheme, 20.19 crore accounts were opened until mid-January while 22.74 crore accounts were opened until March 2015 under DBT scheme.
D Raja, the national secretary of Communist Party of India and Rajya Sabha MP, tells Tehelka, “In every announcement by the government we can see an element of desperation. They are losing elections one after the other and they are making offensives against others. The recent announcement of Startup India is also an example of how they undermine institutions such as the Parliament. The project was declared just ahead of the Budget session. And like many other initiatives, Startup India also favours the corporate sector”.
When the country was debating over intolerance, even the Reserve Bank Governor Raghuram Rajan warned that the situation will not help the country’s economy. With the fringe elements of Sangh Parivar trying to impose their cultural agenda on country’s polity, the biggest challenge for Modi would be to keep the social fabric intact.
But considering the growing influence of RSS on BJP affairs, it may be impossible for Modi to control it, as he is very much a part of it.
The growing unhappiness among the ranks and the dissent expressed by party veterans on Modi-Shah duo might also create hiccups for the government’s smooth functioning. Flipflop diplomacy on Pakistan and the situation in Nepal will also affect Modi’s future. His growing inclination towards Japan and the US to counter China will also be problematic. For Modi, the quest to woo his voters for a second term would be a tough one, if he doesn’t surmount the challenges in 2016.