The Big Story: Back to development

The economy took a severe beating in 2017, primarily due to the chaotic implementation of two important policy decisions: demonetisation in November 2016 and the Goods and Services Tax in July 2017.

Many economic indicators went up and down through the year, but more down. Between January and March, the gross domestic product went down to 6.1%. It further dipped in the first quarter of the 2017-2018 financial year to 5.7% before going up again to 6.3% for the quarter ending September.

Industrial production index stood at 2.2% in October, compared to 4.1% in September. Consumer inflation is up from 1.4% in June to 4.8% in November. Agriculture growth, on the other hand, decelerated from 2.3% in June quarter to 1.7% at the end of September. Even public expenditure, which saw a healthy growth of 9.5% in the April-June period, came down to 6% by September.

If this wasn’t bad enough, jobs have clearly become scarce. The Information Technology sector alone laid off 56,000 people in 2017. Big companies have halved their entry-level jobs, with some analysts claiming the decline is more severe than the situation the country faced in the aftermath of the 2008 global economic meltdown.

These numbers tell you what the government’s priorities should be this year. In 2014, Prime Minister Narendra Modi won a huge majority in the parliamentary elections by promising change and an intense focus on economic development. But as the economy hit a rough patch in 2016, the talk of development took a back seat. The Bharatiya Janata Party’s political messaging quickly became divisive, with the vitriol reaching its peak in the campaign for the Gujarat Assembly elections at the end of 2017. Modi spearheaded the polarising campaign himself, invoking the bogey of Pakistan and floating a conspiracy theory that it was attempting to fix the election in the western state.

The last year also saw beef politics taking centre stage, with the BJP government imposing a ban on cattle markets across the country selling bovines for slaughter. It took several protests from farmers for the government to withdraw the ill-considered rules. Besides, brutal attacks on Dalits and Muslims were reported in several places. The year ended on a chilling note, with the murder of a Muslim labourer in Rajasthan in December as a lesson to all Muslims indulging in so-called love jihad.

With Assembly elections due in the crucial states of Rajasthan, Madhya Pradesh and Karnataka in 2018, the stakes are high for the BJP. With these state polls coming in the run-up to the 2019 Lok Sabha polls, there will be the easy temptation to make divisive politics the main strategy. Already, parts of coastal Karnataka have begun to experience communal incidents.

While this corrosive strategy is an easier way for the BJP to win elections, it could end up alienating an important group of voters – those who ignored the threat of Hindutva by believing Modi’s promise of development would win out. If the Centre fails to set the economy right in 2018, this crucial bloc might reconsider its options.


  1. Our Constitution does not acquire its secular character merely from the words in the Preamble, but from a collective reading of many of its provisions, particularly the various fundamental rights that it guarantees, says Suhrith Parthasarathy in The Hindu. 
  2. We need to articulate why education is most crucial for removal of poverty, and for India’s development, argues Pankaj Chandra in Indian Express. 
  3. The need for independent and courageous journalism has been greater than ever before, writes AG Sulzberger in The New York Times. 


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