BJP poll win seenas an endorsement of Modi’s policies

Nearly three years after storming into to power with the largest majority in 30 years, Indian Prime Minister Narendra Modi’s Bharatiya Janata Party has won an overwhelming majority in Uttar Pradesh in the country’s most decisive state election after 15 years in opposition.As the Modi juggernaut thunders on, the election win allows the premier to aggressively push his economic reform agenda, while positioning the BJP for a second term in 2019.The significance of Uttar Pradesh in Indian politics can never be understated. With a population of 204mn – about the size of Brazil – Uttar Pradesh sends more lawmakers than any other state to both houses of parliament; the state has also produced eight of India’s 15 prime ministers. The BJP’s gains, with the party faring decisively well in other state polls conducted almost simultaneously, could now be seen as an endorsement of Modi’s policies, not least his hard-hitting decision last November to remove high-value currency – representing 86% of the cash then in use – from circulation. “Modi represents that national-level figure that we’ve not seen since Indira Gandhi,” said Sandeep Shastri, a political scientist and pro-vice chancellor of Bengaluru’s Jain University, referring to the prime minister.Investors could now show renewed confidence in Modi’s reforms and the country’s economy (still one of the world’s fastest growing), a stable currency and slowing inflation. For Uttar Pradesh, pro-business reforms, such as digitising land records and making permit applications easier, are seen on track. At the federal level, Modi could tackle non-performing bank loans to revive lending and continue to pursue policies aimed at pushing India’s vast informal economy into more formal channels. The optimism resulting from continuity of reforms could also boost equity markets.More than halfway through his term, Modi has got mixed reviews. He’s opened millions of bank accounts for the poor, cleared the path for a national sales tax that would transform India into a single market and attracted more foreign direct investment. India has also eclipsed China as the world’s fastest-growing major economy. But economists have questioned the motives for an unprecedented clampdown on cash, designed to tackle black money. His critics say he takes measures that increase safeguards for India’s tycoons and fails to move against religious factions of his party, which oppose reforms and want to erode the country’s secular foundations.Make no mistake, India’s $2tn-plus, consumer-driven economy offers tantalising prospects for investors. With 1.3bn people, who speak more than 700 languages uniting under one roof, India’s democracy, the world’s most populous, is a marvel of the modern age. But it has traditionally divided spoils along the lines of religion and caste.India, for sure, can dream big. But the country’s policymakers need to learn from mistakes committed in the past. The shallow, short-term economic thinking should give way to a sustainable long-term growth vision to lift millions out of poverty and ensure social inclusion for the marginalised sections of the country.