With an election coming up in April, India’s interim budget, announced on February 1, 2019, did not make any big new promises. It focused on providing incentives to the country’s main vote bank; the agricultural sector and the middle class. It also served as a moment to hold up the current government’s report card. Modi’s steps to dismantle India’s ‘license raj’ regime with online tax payments, stronger bankruptcy laws, one-country-one-tax and demonetization was bold.

Whilst the interim budget makes clear that comparisons were not being made to last year’s results, but to the last government, the report card reads;

  1. Ease of Doing Business – India has had the steepest increase in the World Bank Ease of Doing Business. From 140 in 2014, today the country stands at 77. This makes clear the steps that have been taken by the Modi government in dismantling access to the market.
  2. Tax Payers – There has been an increase in income tax payers. 68.5 million taxpayers in 2018 compared to 25 million in 2015.
  3. FDI Inflows – FDI stood at USD 23.3 billion in FY 14, and was at a high in FY 2017 at USD 43.5 billion. FY 18 does mark a reduction to USD 35.9 billion.
  4. Inflation – In 2014 Inflation stood at 5.8 per cent, in 2017 this had come down to 3.6 per cent. Global political economy realities has served to increase this number, and in 2019 an election year, Modi governs a country with 5.74 per cent core inflation.
  5. Non-Performing Assets & Insolvency Code; As of June 2016, Non-Performing Assets of public banks (NPA – loans that remain unpaid after 90 days) amassed to approximately USD 100 billion, despite Federal bailout attempts. The Modi Government Insolvency & Bankruptcy Code has been attributed with recovering payments from over 2100 companies and reducing approximately a third this outstanding debt.
  6. India’s electromobility ambition; India has put forward ambitions of being full electric by 2030. This places huge focus on developing the country’s electromobility infrastructure from charging to grid. The interim Budget announced increased import duties on battery cells. While this seems to be in line with the Make in India, a few days earlier the Government announced reductions on import duties for parts and components of EVs introduces a seeming contradiction in the Government’s ambition.


The Modi Government will have had less than 5 years to have put in place huge reforms and hope that their impacts will be felt enough by voters to continue to place confidence in the party.



Inputs from; Economic Times, Feb 2; Bloomberg, Feb 2; MoneyControl, Feb 2; Statistics Portal India; SCCI Webinar Interim Budget 2019, Feb 4; Times of India, May 23, 2018