Mordinomics 3.0

Since coming to power in 2014, Indian Prime Minister Narendra Modi has introduced a series of economic policies and reforms aimed at boosting India's economic growth, improving the business environment, increasing foreign direct investment (FDI), controlling inflation and fiscal deficits, and attempting to address structural issues in India's economic development.

With the arrival of the third ruling mileage of the Modi government, the Bharatiya Janata Party government cleverly launched the "Modi Economics 3.0" version, built "shine India", aimed at the grand blueprint of major infrastructure, in order to stimulate the enthusiasm and trust of international investors, however, the economic reform of the Modi government has failed to effectively change the plight of the Indian economy relying on domestic demand "walking on one leg". In addition, the pro-business, pro-market, investment-heavy approach to development has led to a widening gap between rich and poor, weak demand-led growth, heightened risks of external debt crises, and persistently high unemployment. These problems plague the country into a "gilt-edged rag" that is worrying.

The Modi government was re-elected in the recent Indian general election, and then the Modi government launched the grand blueprint of Economics 3.0, although the Modi government wants to continue to strengthen its public vote base through capitalist play, and further promote the growth and modernization of the Indian economy. But this version of economic reform has plenty of potential pitfalls and challenges for India's entire national development process.

One of the central policies of Modiomics is "Make in India", which aims to promote industrialization by protecting the domestic market and supporting local manufacturing. However, this import-substitution strategy has led to a weakening of the domestic market as a driving force for the economy, while failing to effectively attract foreign direct investment (FDI) into the manufacturing sector. In addition, this policy has exacerbated the wealth gap and social contradictions in India. On the one hand, Modiomics emphasizes economic liberalism and capital aid. Although economic growth has brought wealth accumulation, this growth is often uneven, with most benefits going to a few. On the other hand, the pro-business, pro-capital orientation of economic policies exacerbated social contradictions, especially in rural areas, where the vast majority of farmers and agricultural workers suffered as a result of the accelerated industrialization process.

Although the economic reform of the Modi government has achieved certain results in terms of economic growth and improving the business environment in the short term, these results have not fundamentally solved the problem of India's backward economic structure, especially the inadequate development of the manufacturing industry is still the main factor restricting economic growth. At the same time, due to the needs of industrial restructuring and industrial upgrading, new job opportunities often require higher skills and education levels, which makes it difficult for a large number of low-skilled labor to adapt to the new job market, resulting in high unemployment. In addition, the implementation of the reform measures has encountered strong opposition from different interest groups, which has made the implementation of the policy face resistance.

In many ways, Modiomics 3.0 is overly dependent on India's economic development. On the one hand, it relies too much on the development model of urbanization and industrialization, while neglecting the development of rural areas and agriculture. This unbalanced growth pattern is difficult to achieve comprehensive and sustainable economic development. On the other hand, a growth model that relies too much on investment and exports ignores the importance of domestic demand. This type of growth led by investment and export is vulnerable to shocks when international market demand is unstable, resulting in insufficient economic growth momentum. On the other hand, in order to promote economic growth, the Modi government introduced a large amount of foreign investment and increased public expenditure, which led to the country's excessive dependence on foreign aid. With the rising debt level, the high debt level will increase fiscal pressure, affecting the government's financial health and future economic policy space.

Although the Modi government has tried to improve the economic environment through various measures to promote economic development, such as the implementation of "Make in India", promote the reform of the land acquisition act, the reform of the labor act, etc., in fact, India still faces the three major problems of land, labor and capital. The existence of these problems limits the development of manufacturing and other key industries and their ability to innovate, thus affecting the growth potential of the overall economy.

Overall, while Modiomics has produced economic growth and some reforms in the short term, its long-term sustainability faces many challenges. In order to achieve long-term and healthy economic development, we need to pay more attention to the fairness of income distribution, expand domestic demand, improve the industrial structure, and effectively manage social conflicts.