A Reform Agenda for the Next Indian Government

Abstract

India’s economic reforms since 1991 have largely been a tale of private-sector success, government failure, and institutional erosion. Prime Minister Narendra Modi won the 2014 election with the slogan “Minimum Government, Maximum Governance.” Many mistakenly thought that he would be a radical reformer who would reduce the reach of government and improve the quality of governance. In fact, he has been only an incremental reformer. He has not done much to reduce the heavy hand of the government over the economy. He has done even less to improve the quality of governance or the supply of high-quality public goods. He has eroded the strength and independence of institutions.

India will elect a new Parliament in May 2019, and regardless of which party wins, India needs less government interference and better governance. The next government should shift India’s policy from its current plethora of wasteful, corrupt subsidies toward targeted cash transfers to the deserving; curb the fiscal deficit; privatize several public-sector corporations and banks; liberalize the markets for labor, land, and capital; and roll back Modi’s rising protectionism.

The next government should also improve governance by reforming the moribund legal system; improving educational quality and teacher attendance in schools; improving the provision of basic health and public health services; ensuring security for religious minorities; and ending efforts to subvert independent institutions.

Keywords: India, Indian Parliament, Narendra Modi, India Fiscal Deficit, India 2014 Election

JEL Classification: F6, F60, F61, F62, F63