- Prime Minister Modi approaches elections next year with mixed economic results
- Growth and inflation have improved but the economic recovery remains slow
- Important finance and tax reforms have held back the economy in the short term
- Modi may turn to new welfare spending to win over the electorate
The Narendra Modi government enters the fifth and final year of its term with a mixed economic report card. When the Indian prime minister was elected in 2014, the economy was stagnant, food inflation was in double-digits and nominal interest rates were among the highest in the world. Today, Mr. Modi’s government can rightly argue that growth is on a more stable base, inflation has moderated and that major reforms have left the economy in much better health. The political question is whether this will be enough to earn Mr. Modi a second term in April’s national elections. His government knows that its reelection campaign will have less to show economically than it had hoped.