Challenges Ahead: PM Modi's Political Capital and Future Reforms

Switzerland's UBS Securities cautioned that Prime Minister Narendra Modi's reduced political capital may hinder significant reforms. While potential growth could exceed 7.5%, critical reforms in areas like land and farming might be delayed. Despite these challenges, the government aims to boost manufacturing and skill development to sustain economic momentum.

PTI | Mumbai | Updated: 10-06-2024 18:19 IST | Created: 10-06-2024 18:19 IST
Challenges Ahead: PM Modi's Political Capital and Future Reforms
Narendra Modi
  • Country:
  • India

In a recent report, UBS Securities highlighted Prime Minister Narendra Modi's diminished political capital as a key obstacle to implementing tough reforms essential for India's economic growth. The brokerage suggested that significant measures in land, farming, and governance might face delays.

Tanvee Gupta Jain, Chief India Economist at UBS Securities, emphasized potential growth rates exceeding 7.5% contingent on these reforms. However, the reliance on National Democratic Alliance partners may prolong the reform process, she noted. The government's focus will remain on boosting manufacturing and skill development to create blue-collar jobs.

Jain also pointed out the importance of the upcoming Union Budget in determining future policy directions. Despite fiscal constraints, continued fiscal consolidation and increased social sector spending are anticipated, leveraging the Reserve Bank of India's dividends. The economy, currently robust, may see nominal rate cuts by 2025 as inflation declines.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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