Modi’s Vulnerable Domestic Flank

The central issue remains that when the economic situation is dire and the low-income sections have been adversely impacted by demonetisation, the manner of implementation of the Goods and Services Tax (GST), the general economic slowdown and the neglect of rural India, will they be swayed in favour of the ruling party if they believe India has a muscular national security policy?

Source: CMIE

EXECUTIVE SUMMARY. The Indian prime minister’s announcement that India had destroyed a ‘low-earth orbit’ satellite with a missile, and thus joined an elite club, suggests that the ruling party is desperate to deflect the voters’ attention from the dire economic situation in India. This desperation points to a reality quite different from the view in the capital market, which appears to have discounted another term for Modi. In the wake of the Balakot ‘surgical strike’, this government wants to foreground its muscular national security policy to compensate for its inability to address the economic situation on employment and rural wages.

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