Narendra Modi is becoming an expert at policy U-turns

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Narendra Modi mentioned “reform” more than two dozen times in his Independence Day speech at Delhi’s Red Fort earlier this month. But despite all his promises, the Modi Indians heard was not the reformer they once knew.

The Indian leader typically uses the speech to outline his grand vision for the world’s most populous country. Last year, he pledged to make India a developed economy by 2047. This year’s speech, which lasted a record 98 minutes, featured numerous references to “developed India.”

but ModiThe BJP lost its parliamentary majority in June for the first time in a decade and has had to negotiate legislation with allies, sometimes even making concessions. Recently, the party has done a 180-degree turn on some bills that it was confident it would pass in parliament in the past.

As a result, analysts say Modi, whose third term as prime minister is weakened, will have to work harder than before to overcome a reenergized opposition led by Rahul Gandhi, despite his declared commitment to “major reforms.”

Perhaps more ominous for the powerful and popular prime minister are comments made since the June 4 election results by some leaders of the Rashtriya Swayamsevak Sangh, the Hindu nationalist mass movement behind the BJP, that Indians see as expressing impatience with Modi.

“He had very grand plans, but the loss of 60 seats in parliament has put much of his plans on hold. He has to contend with his partners, the RSS and a more vigorous opposition in general,” said Pramit Pal Chaudhuri, head of South Asia practice at Eurasia Group.

Modi’s left-wing critics are pleased to see the power of what they call an authoritarian strongman leader being weakened.

Meanwhile, business leaders and analysts are pondering what the change in election results means for the pro-big business leader who has laid out an ambitious third-term agenda for the world’s fifth-largest economy.

On the eve of the election, Modi instructed ministries to draw up 100-day action plans to promote the BJP’s legislative and administrative agenda in the first three months of his administration. These included proposals to set up “super ministries” for areas such as technology, aimed at streamlining government work.

Officials no longer talk of a 100-day agenda. He was forced to parcel out some government portfolios to smaller partners in the alliance after the BJP unexpectedly lost its majority, making plans for large ministries unfeasible.

The Modi government has recently Sent back After strong opposition from civil society groups and skepticism from the business community, the US government has decided to further amend the broadcasting bill, which will impose stricter regulations on YouTube users and other content creators.

Modi’s government also scrapped a long-term capital gains tax reform proposed in last month’s budget amid strong protests from India’s middle class. A plan to allow non-bureaucrats to enter the civil service “laterally” was rejected by the opposition led by Gandhi, who questioned why it did not include “reserved” places for low-caste Indians. The plan was even criticized by some of Modi’s allies.

Arguably, both measures are good for India’s finances and governance quality, with lateral entry allowing more private sector technocrats to participate in public administration.

The business community has been hoping for progress on policies such as privatization, land and labor market reforms, and changes to production-linked incentives, the billions of dollars in subsidies India uses to attract investors in industries such as mobile phones and microchips.

Analysts say the future momentum of the Modi government will depend largely on the results of upcoming state elections – the largest of which is in Maharashtra, one of India’s richest and largest states, due in November.

Even earlier, the by-elections to 12 seats in the Rajya Sabha or Upper House scheduled for September 3 could either give the BJP a small boost or a loss in the 245-seat Upper House.

Seasoned political observers point out that it is no big deal that Modi is a weaker performer in the coalition government. It will only make him a more typical Indian leader.

Narasimha Rao, the Congress prime minister elected in 1991 and hailed as the leader of India’s “big bang” economic reforms, leads a minority government. Even Modi, whose BJP party holds a majority, has failed to implement ambitious reforms in the key agricultural sector.

Shumita Deveshwar, chief India economist at GlobalData.TSLombard, said: “As far as economic policy is concerned, it does not matter which government is in power. India’s very dynamic democracy with many stakeholders involved means the pace of reforms will always be very slow.”