Modi govt policies hampering India’s economic growth, foreign policy: risk firm

Modi govt policies hampering India’s economic growth, foreign policy: risk firm

Eurasia Group places India as 5th highest geopolitical risk in 2020 list

India has been ranked the 5th highest “Geopolitical Risk” in 2020, according to a list of 10 global risks in the year ahead, compiled by the Eurasia Group, a leading global political risk management consultancy. It said that in its second term, the Narendra Modi-led NDA government’s “social” policies were affecting India’s economic agenda and foreign policy image.

“Prime Minister Narendra Modi has spent much of his second term promoting controversial social policies at the expense of an economic agenda. The impacts will be felt in 2020, with intensified communal and sectarian instability, as well as foreign policy and economic setbacks,” said the report entitled “Top Risks 2020”, co-authored by Ian Bremmer and Cliff Kupchan of the Eurasia Group, pointing to the widening fiscal deficit, low GST collections, and the latest six-year low in GDP growth.

The report was released this week even as Mr. Modi began a series of meetings with businessmen and economists ahead of the annual Budget announcement, in an effort to shore up the economy.

Amongst the other risks listed for 2020 are U.S. governance and institutional conflicts with President Donald Trump, the U.S.-China trade rift, European geopolitics, Climate change, and Turkey.

What makes the Eurasia Group listing significant is that this is the first time in many years that India has been mentioned for social and political developments. The group had referred to India mostly due to its economic potential in the past. In 2016, for example, the Eurasia report on top global risks said that Mr. Modi’s “strong leadership… focused on economic reform and longer-term strategy” would actually reduce geopolitical risks.

Mr. Bremmer, who is the founder and president of the Eurasia Group, has also in the past been a major supporter of reforms under the Modi government, and praised him in several articles and television appearances since 2014. In June 2019, Mr. Bremmer wrote for Time magazine that Mr. Modi was “India’s best bet for economic reform”.

“It really shifted with the election,” Mr. Bremmer told The Hindu, when asked about the shift in his opinion. “[Mr.] Modi’s need to win while the economy was softening led him to deprioritise reform and turn to Hindu nationalism and the RSS. Both political strands were always there, but the priorities changed, and that led to the change in our view,” he added.

According to the report, amongst the risks for India in 2020 are “sectarian conflict”, anti-CAA protests, and possible violence in Kashmir, which it describes as a “powder keg” after the dilution of Article 370.

“Behind these moves is Amit Shah, the former head of Modi’s Bharatiya Janata Party (BJP), now home minister,” it adds.

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