NEW DELHI: 2017 may well be the defining year of Prime Minister Narendra Modi’s five-year term that began with a spectacular national election victory in May 2014.
Most pundit and popular attention is focussed on his December 31 address to the nation and the success of ‘remonetisation’ efforts in the beginning of 2017. But reasons the next year may define the PM’s term run deeper and wider.
The next 12 months will see whether the economy picks up sharply, whether Bharatiya Janata Party has political momentum, whether it can choose a head of state, and whether India can negotiate with Donald Trump’s America.
ET spoke to a number of top government officials and senior BJP leaders for this report. They participated on the condition they not be identified.
Assuming that the cash crunch eases considerably early into the New Year, the PM’s big move on demonetisation will be judged, by experts and voters alike, by his government’s ability to, first, deliver direct benefits to low and middle income groups and, second, make a visible difference to growth prospects over the next three years.
Officials said the December 31 address and the February 1 Budget will offer a feel-good message to low and middle income classes and that the PM will point to these as direct benefits of demonetisation. The first crucial step therefore will be people’s buy-in for these measures.
For the PM and for BJP, this buy-in will be critical, senior BJP leaders said, since it will determine whether the goodwill generated by the PM’s war on black money will yield political dividends.
Beyond that, officials said, the PM will need to get his government to pump prime the economy while keeping fiscal constraints in mind. They said the scope for more high-stake political economic moves like demonetisation is now limited, and therefore the challenge will be to generate brisk economic activity.
Officials identified big spends on infrastructure and rural economy as the likely key policy choices on this. The PM’s image for honesty has been burnished, they said, but his image as a progrowth reformer now needs augmenting. By end-2017, we will have a fair idea of the answer.
We will also come to know if Modi-led BJP acquires massive political momentum, party leaders said. If BJP wins the Uttar Pradesh polls early in the year and Gujarat elections later, 2017 may see Modi’s political reputation scale heights not reached even in 2014. It will also give him more elbow room for reforms in the last two years of his term.
But leaders also said that any reversal in these state polls will not offer Modi the same luxury that Congress had when it lost many state elections in the 2004-09 term but still won the general election. That’s because, party heavyweights said, the Manmohan Singh government, which was not in effect led by Singh, didn’t heavily depend on prime ministerial political prestige. A loss of momentum for the rest of Modi’s term is therefore possible.
ELECTIONS FOR PRESIDENT, VICE-PRESIDENT
The results of assembly elections will also partly determine whether the PM gets a President and Vice-President of his choice. BJP has enough votes in the two Houses to get a V-P of its liking and that would be crucial since the V-P presides over the Rajya Sabha, where BJP will be in a minority in the foreseeable future.
If a Modi-led BJP wins UP, the chances of the PM ensuring his pick wins the presidential contest will be bright. If UP doesn’t go BJP’s way, all will not be lost for the party’s presidential nominee, but the Opposition will smell a chance. 2017 will therefore determine whether the PM has the clout to pick winners for high state offices.
The man America has picked for its highest office may get tough on China next year as no US president has been in recent times. If Donald Trump makes the great pivot on Beijing, the 2017 diplomatic test for Modi will be whether India can pick up some dividends.
This won’t be easy, senior diplomats say, as there are great imponderables, including how China interacts with Pakistan under US pressure. And if skilled labour migration does come down hugely under Trump, Modi will have a really tough diplomatic challenge. As he will if Trump’s Make America Great Again clashes with some US companies’ ‘Make in India’ plans. 2017, starting immediately from January 1 as people parse Narendra Modi’s December 31 address, may be the year that permanently marks his prime ministership.