Modi's mid-term report card shows more positives than negatives

THE Narendra Modi-led Indian government last week showcased its achievements on the completion of two years in office at a gala event in New Delhi, with its complement of films stars and other celebrities. Given the five-year election cycle in India, the event's importance lies in the fact that it's a sort of mid-term report card for the government.

Mr Modi has failed to live up to expectations of being a "big bang" reformer; instead he seems more of an incremental reformer going forward with a series of "small bangs". Despite that, some of his government's achievements are worth highlighting. India's gross domestic product (GDP) for the fiscal year which ended on March 31 was up 7.6 per cent, making it the fastest-growing major economy in the world, overtaking China.

Inflation has gone down by almost half compared with a couple of years ago, with food inflation at its lowest in a long time. Mr Modi has had his share of luck with petroleum, which accounts for more than 70 per cent of Indian imports, being priced at historic lows over the past two years. The government has yet to fully pass on this saving on imports to consumers. Instead most of the savings have been used to shore up India's public finances. India's budget deficit has shrunk to 3.9 per cent of GDP in the fiscal year ending March 31, from 4.4 per cent the previous year.