A look at the key challenges in NDA 3.0

New Delhi: The BJP-led National Democratic Alliance (NDA) registered its third successive victory in the 2024 Lok Sabha elections under the leadership of Prime Minister Narendra Modi, but the party itself fell short of a majority by 32 seats and also missed its own target of 370 by 130 seats.

Unlike Modi 1.0 and Modi 2.0, the third term of the PM Modi dispensation is a coalition government and requires the support of alliance partners like the JD-U, the TDP, the LJP-Ram Volas along with other smaller and single-party representatives.

Owing to the compulsions of a coalition, the government will not only have to accommodate the demands of allies but will also have to accord due respect and importance to each of them, besides finding ways to pursue and accomplish its poll promises.

Besides the numbers game, the Modi 3.0 will also require a rigorous focus on improving the economic indicators to make a difference.

Below is the list of challenges:

Economic challenges

Indian economy clocking a growth of 8.2 per cent in FY 2023-24 came as a big boost and has given a head-start to the PM Modi government in its third term.

However, the growing disparity among diverse sections of the population promises to play spoilsport. Comparing the economic indicators to global levels, one gets to know that the country’s per capita income still remains low and "far from desired" levels among the G20 nations.

However, there are some points to cheer too. The economy has grown from the 11th largest to the 5th largest in the past ten years and in the next two to three years, it is widely believed to become the third largest economy.

The fiscal deficit, which shot up to over 9 per cent in 2020-21, has also been brought down to below 5 per cent in 2024-25.

Unemployment and inflation

Unemployment and inflation were among the poll planks of the Congress-led INDIA bloc and the latter also touted it as among the key failures of the Modi government.

According to a recent report by the Centre for Monitoring Indian Economy, a Mumbai-based think-tank, India’s unemployment rate soared from 7.5 per cent in March to 8.1 per cent in April 2024.

As per government data, the urban unemployment figures soared to 6.7 per cent in the Jan-March quarter, from 6.5 per cent in the previous quarter.

Election analysts also believe that the popular discontent over poor job scenario was the reason behind setbacks to the BJP in many constituencies.

Empowering this middle and working class will remain among the top priorities in the third term of the PM Modi government. The same was also outlined by the Prime Minister in an address to the NDA constituents.

"Today, the middle class has emerged as a driving force in Bharat’s growth story. We will continue to ensure the welfare of our people and will continue to deliver the quality of all to all," PM Modi had said.

Special status demand of allies

The Chandrababu Naidu-led TDP and the Nitish Kumar-led JD-U, who emerged as BJP’s indispensable allies in forming the government have promised full support to the PM Narendra Modi government but they will also be eyeing special package and special category status for their respective states.

These have been long-standing demands of these two parties, owing to the backwardness of the two states and with their kingmaker role this time, the Centre will have to ensure that it earmarks and allocates special funding for the same.

International Outreach

India’s rising global stature on the back of the Prime Minister’s rockstar image has been one of the biggest pluses of the PM Modi dispensation. The government’s consistent focus on turning India into a ‘Vishwaguru’ and also walking the talk with its exemplary gestures has also solidified its position.

Barring a few irritants with Canada and China, India has walked down this path with fair success. The strains with Canada surfaced when it accused three Indians of killing Sikh separatist leader Hardeep Singh Nijjar in its Surrey province.

Border skirmishes with China in 2020 and the China-Pakistan Economic Corridor (CPEC) infringing upon the Indian territory in PoK have already strained the ties between the two nations.

Overall, there wouldn’t be a bigger departure from the policies pursued in the past decade, it is only expected to get dexterous and multi-dimensional in the increasingly complex world.

Key policies on the backburner

The Citizenship Amendment Act (CAA) and National Register of Citizens (NRC), along with the likely roll-out of the Uniform Civil Code (UCC) in some states were among the most popular policies of PM Modi's government in the second term. However, with new alliance partners in the coalition, it is likely to hit a roadblock for now, given the TDP and the JD-U’s pro-minority focus.

Also, the Hindutva pitch of the BJP is likely to take a backseat as the comfort and convenience of the allies will have to be prioritised over the BJP’s core ideology, for the smooth functioning of the government.