Modi’s new budget faces jobs crisis test in India

On Tuesday, India’s Prime Minister Narendra Modi’s coalition government will present its first federal budget following a narrow election victory.

A weakened Mr Modi, reliant for the first time on coalition partners, is widely expected to usher in a reset in his spending policies, while maintaining fiscal prudence.

Analysts suggest the new government may need to focus more sharply on the rural majority, who have not benefitted as much as the wealthy from the country’s rapidly growing GDP.The fact that this is Mr Modi’s third term will preoccupy him with thoughts of leaving a lasting legacy and may “tempt” him to do something about economic prosperity for the masses, says Rathin Roy, a former member of the prime minister’s Economic Advisory Council.

“It is the one area where his legacy will say he has conspicuously failed in the past.”

In the 10 years that he’s been in power, Mr Modi has poured billions of dollars into state funded infrastructure, building sea bridges and expressways. He’s also undertaken tax cuts for big corporations and launched subsidy schemes to incentivise exports-focused manufacturing.

India’s shaky macro economy has stabilised and its stock markets have soared.

But so have inequality and rural distress. (Foreign Agencies)

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