Four Years: A Missed Opportunity

India’s economy is back on track after the twin hits of demonetisation and GST, but soaring crude oil prices threaten to push it off the rails again.

- Debabrata Das

When the Bhartiya Janata Party (BJP) and its allies swept to power with a massive majority a little over four years ago, expectations were sky-high. After years of corruption scandals, people expected the new government to reverse the previous administration’s policy paralysis and move economic growth into high gear. “The key thing for the government in 2014 was to appear to be doing something,” says Amir Ullah Khan, professor of economics at the Hyderabad-based Maulana Azad National Urdu University and visiting faculty at the Indian School of Business.

The new government certainly hit the ground running. At the first cabinet meeting chaired by Prime Minister Narendra Modi, the Centre constituted a special investigative team to unearth black money. Months later, the Supreme Court cancelled more than 200 coal licences that it ruled were allocated arbitrarily. Big companies such as the Aditya Birla Group, Jindal Steel & Power, and Essar Power had investment plans linked to these licences. The government’s swift decision to come out with a framework to auction coal blocks, as well as a ramp-up in Coal India’s production, prevented what could have been India’s largest energy crisis. “Before 2014, business sentiment was suffering because there was a sense of policy paralysis. Certainly, the BJP-led government managed to change the sentiment through its policy actions,” says Sunil Sinha, principal economist at India Ratings and Research.