Modi’s Second Term Presents Opportunities For Momentous Economic Progress
India’s newly re-elected prime minister, Narendra Modi, has now decisively won two general elections on the promise of growing economic opportunities for the men and women he represents. He has a mandate to move decisively and imaginatively to strengthen his nation’s economy and assure better lives for all Indians. One of the most important ways he can do so—as we and many other independent analysts have observed—is by tackling the many barriers to foreign investment that continue to impede efforts to put more Indians to work.
One of these experts, Rick Rossow of the Center for Strategic and International Studies (CSIS), suggests that Mr. Modi use his mandate to focus on areas such as:
- Stabilizing the regulatory system. Today, foreign companies think twice before pouring money into the country and hiring workers because, at any time, basic rules governing investment might see yet another seismic shift. By adopting the regulatory procedures American companies take for granted, especially a cost-benefit analysis and a 30-day notice and comment period, Modi can make it easier for Indian and foreign companies alike to serve the India market.
- Improving the investment environment. Foreign equity limits are still in effect for many sectors and the government still owns stakes in numerous companies. These barriers directly hinder Modi’s ambition of making India a major investment destination, and cut India off from some of the world’s best products and technologies. By easing/eliminating these limits and privatizing more public companies, thereby leveling the playing field between foreign and domestic companies, Modi can encourage the very type of growth that will lift more Indians up.
- Committing India to elimination or simplification of rules and regulations. India is famous for its massively complex regulatory rulebook, the so-called “License Raj,” that makes it hard for nearly any business to reach its full potential. Politicians like Modi have said for many years that this system must be tackled and simplified in order to X—and now, after securing yet another large parliamentary mandate to back him—he has the perfect opportunity to do so.
This is an important moment for India. The opportunities for its citizens and the opportunities for companies in the United States are numerous—and they are linked. By using his renewed mandate to enact the types of reforms that will encourage more outside companies to invest their talents and resources in India, Modi can fulfill the promise of his twin victories because it is the Indian people are those who stand to benefit most.