What
gets measured gets managed. What gets obscured gets inherited.
The
completion of twelve years of the Narendra Modi-led NDA government has
triggered a familiar debate. Supporters point to faster infrastructure
creation, digitization of governance, improved tax compliance, stronger foreign
policy visibility, record UPI adoption, rising formalization, and India’s
emergence as one of the fastest-growing major economies.
Critics
argue that beneath these achievements lie deeper structural weaknesses that
have either persisted or worsened.
Both
narratives contain elements of truth.
India
today is larger, more digitally connected, and more visible on the global stage
than it was in 2014. Yet the ultimate test of governance is not merely GDP
growth or international ranking of GDP number. It is whether the country’s
long-term developmental foundations have strengthened.
(I
would like to make it clear that this is
not an exercise in political partisanship. The purpose here is narrower and, in
some ways, more demanding: to assess the domains where the record is
objectively weak and the agenda remains unfinished.)
India’s most consequential competitive
advantage is demographic: a large, young workforce that ought to be highly
productive. Whether it will be, depends almost entirely on the quality of
education and health systems built now. On this, the twelve-year record is
mixed at the primary level and disappointing at the structural level.
As per the Annual Status of Education
Report (ASER) 2024 — approximately 50% of Class 5 students cannot read a Class
2-level text — a basic literacy failure at scale, after a decade of policy
attention. Secondary education outcomes remain poor. Dropout rates among 15-16
year-olds average 8%, rising to 13% in Uttar Pradesh and 8.6% in Bihar. Teacher
training, while expanded, remains syllabus-driven rather than
competency-driven. The National Education Policy 2020, whatever its
aspirations, has yet to produce measurable system-wide improvement at secondary
and tertiary levels.
Public investment in education has
consistently fallen short of the 6% of GDP target that NEP 2020 itself
mandates. The structural deficit in higher education quality — as measured by
India’s dismal showing in global university rankings — has not been meaningfully
addressed.
The trajectory on health outcomes shows
improvement on legacy indicators: infant mortality has declined from
approximately 40 per 1,000 live births in 2014 to 25 by 2023; the maternal
mortality rate has improved to 80 per 100,000 live births (compared to 130 in
2014). These improvements reflect the continuation of long-run secular trends,
aided by schemes like Janani Suraksha Yojana.
What has not improved is the structural
commitment to public health financing. India’s public health spending continues
to hover around 1.9% of GDP — well below the National Health Policy 2017 target
of 2.5% by 2025. Critically, Union transfers to states for the National Health
Mission dropped from 75.9% of the health budget in 2014-15 to just 43% in
2024-25 in real terms. The burden of healthcare costs on households remains
severe: out-of-pocket expenditure accounts for approximately 48% of total health
spending, pushing an estimated 63 million Indians into poverty annually due to
catastrophic medical costs.
Ayushman Bharat is a genuine policy
innovation, extending coverage to previously uninsured populations. Its
operational effectiveness, however, remains contested — particularly the
quality of care delivered and the adequacy of insurance payouts for complex
conditions. Access to basic primary care, especially in rural areas, remains
structurally underfunded.
The verdict on human capital is that
incremental improvements have occurred, but the structural investment required
to realize the demographic dividend has not been made. The 2030s will reveal
the cost of this underinvestment.
No topic in Indian economic policy
discourse is more contested — or more politically charged — than employment.
Both the government’s triumphalist claims and the opposition’s ‘jobless growth’
narrative oversimplify a complex picture.
The data from the Periodic Labour Force
Survey (PLFS) does show genuine improvement on several headline metrics. The
Worker Population Ratio increased by approximately 9 percentage points between
2017 and 2023, implying a 26% rise in employment over the period. Youth
unemployment fell from 17.8% in 2017-18 to 10% in 2022-23. Female labour force
participation has increased, particularly in rural areas. The employment
elasticity of GDP between 2017 and 2023 was approximately 1.11 — suggesting
that every 1% increase in GDP was accompanied by a 1.11% rise in employment.
These are not fabricated numbers, and
dismissing them entirely would be dishonest. However, the quality of employment
created remains the central and largely unresolved concern.
The increase in employment is
predominantly in self-employment, unpaid family labour, and informal
agriculture — not in the organized manufacturing or formal services jobs that
generate the quality of employment needed to absorb India’s approximately 12 million
annual entrants to the labour force. The share of manufacturing in total
employment has not meaningfully increased. India has not replicated the
manufacturing-led employment transformation that propelled East Asian
economies. EPFO payroll additions (a proxy for formal employment) remain modest
relative to the scale of the workforce.
The absence of a population census since
2011 also introduces genuine uncertainty into employment data — a point that is
more than a political talking point. The PLFS itself notes methodological
limitations in capturing the full complexity of informal employment.
Assessment: The ‘jobless growth’
narrative is an overstatement. But the quality of employment — formal,
productive, adequately compensated — has not kept pace with economic growth.
This is not a failure unique to the Modi years, but twelve years of high growth
should have delivered a more decisive structural transformation.
India’s energy vulnerability is the most
under-discussed structural risk in the country’s economic story. Twelve years
of a government that has consistently invoked energy security as a national
priority have paradoxically left India more import-dependent than it was in
2014.
The data is unambiguous. Domestic crude
oil production has fallen from 36.94 million tonnes in 2015-16 to 28.7 million
tonnes in 2024-25 — a 22.3% decline. Simultaneously, crude oil imports rose
from 202.85 million tonnes in 2015-16 to 243.22 million tonnes in 2024-25.
India’s crude oil import dependence has increased from 84% in 2014-15 to
approximately 88-90% in 2024-25. The annual crude import bill reached
approximately USD 137 billion in FY2024-25.
The situation is made structurally worse
by a depletion of domestic reserves. India’s proved crude oil reserves fell
from 762.73 million tonnes in 2014 to 672.07 million tonnes — a 12% decline.
Natural gas reserves fell more sharply, from 1,427 BCM in 2014 to 1,073 BCM in
2025, a 25% reduction. Despite opening the oil and gas sector to 100% FDI,
India attracted only about USD 8.19 billion in upstream FDI between April 2000
and September 2024 — a rounding error by global exploration standards.
The solar power story is, without
qualification, a significant achievement of the Modi years. India’s installed
solar capacity increased from just 3 GW in 2014 to approximately 130 GW by 2025
— a more than 40-fold increase. Overall renewable capacity grew from 76 GW in
2014 to over 233 GW in 2025. India now ranks third globally in solar capacity.
This is real, meaningful, and strategically important.
The limitation, and it is a significant one, is that renewables’ share of actual
electricity generation (~16%) remains well below their share of installed
capacity (~50%), due to the intermittency problem and inadequate storage
infrastructure. Coal-fired generation still accounts for over 80% of actual
power produced. The structural energy vulnerability — particularly to Middle
East geopolitics — therefore persists. The West Asia disruptions of early 2026
demonstrated this with painful clarity.
Crude import dependence (2014-15): 84%
Crude import dependence (2024-25): ~89%
Domestic production decline: -22.3% (2015-16 to 2024-25)
Solar capacity (2014): 3 GW
Solar capacity (2025): ~130 GW
India’s growth story has generated
enormous aggregate wealth. The distribution of that wealth is a separate, and
far less comfortable, conversation.
The top 10% of Indians hold approximately
57% of national income; the top 1% hold approximately 22%. The bottom 50%
account for roughly 13% of national income. Wealth concentration is even more
extreme: the top 1% own approximately 40% of total national wealth, while the
bottom 50% hold just 3%. The wealth Gini coefficient rose from 81.2% in 2008 to
85.4% in 2018 and has remained elevated since.
The government has pointed, with some
justification, to the Household Consumption Expenditure Survey of 2022-23
showing a Gini Index of 25.5 — a relatively low figure. This requires context:
this is a consumption-based measure, not an income or wealth-based measure, and
is not comparable to the income-Gini figures cited by most international
institutions. The World Bank itself noted this distinction in its April 2025
Poverty & Equity Brief. Consumption surveys structurally understate the
true inequality in income and wealth.
There is a legitimate discussion to be
had about methodology. But the direction of travel is not seriously in dispute:
labor’s share of national income declined from approximately 32% in the 1990s
to roughly 22% by 2024, per ILO data. CEO pay rose 50% between 2019 and 2024,
while worker wages grew by less than 1%. The billionaire class has expanded
dramatically; Asia’s two wealthiest individuals are Indian. This has occurred
during a period of strong aggregate GDP growth — which is precisely the point. Growth
has not been distributionally neutral.
The government’s narrative on inequality
leans heavily on poverty reduction data, which is real and significant. But
poverty reduction and widening inequality can coexist — and in India’s case,
they have.
India’s ecological stress represents the
compound interest on decades of growth-at-all-costs development — and the Modi
government has managed this inheritance with mixed results.
The global annual rate of net forest loss
has declined from 10.7 million hectares (1990-2000) to 4.12 million hectares
(2015-2025), reflecting global improvements in forest governance. India’s
official forest cover figures show a modest increase in recorded forest area.
However, independent analyses consistently note that the definitional inclusion
of monoculture plantations and agroforestry distorts the picture. Net natural
forest loss continues, biodiversity pressures remain acute, and forest clearances
for infrastructure projects have been expedited rather than constrained under
the current regime, including significant amendments to the Forest Conservation
Act.
India’s water stress is accelerating. The
country accounts for approximately 17% of the world’s population but has access
to only 4% of its fresh water. Groundwater depletion continues at alarming
rates across the Indo-Gangetic plains and peninsular India. The Jal Jeevan
Mission, which aims to provide tap water connections to all rural households,
has achieved impressive connection numbers (over 80% coverage reported).
Independent assessments, however, note significant gaps between connections and
functional, quality water supply. The deeper structural challenge of aquifer
depletion has not been addressed.
India contains 42 of the world’s 50 most
polluted cities by PM2.5 concentration. Delhi’s air quality routinely reaches
hazardous levels for months each year. The National Clean Air Program has set
targets; measurable progress at the population level remains elusive. This is
an area where 12 years of policy attention has yielded insufficient results.
Against these challenges, the renewable
energy transition is a genuine bright spot. India’s commitments under the Paris
Agreement have been largely honored, and the clean energy deployment trajectory
is one of the world’s more credible energy transitions.
Democratic health depends not only on
elections — which India continues to hold — but on the credibility of the
institutions that make those elections meaningful and that arbitrate between
citizens and the state. This is where the twelve-year record raises the most
serious concerns.
The formal independence of India’s
judiciary is constitutionally guaranteed, and the Supreme Court has delivered
important rulings that constrain executive power. But the perception of
increasing politicization is not limited to partisan critics. Freedom House’s
2024 report notes that while the judiciary is formally independent, ‘courts
have shown signs of increasing politicization’ and government judicial
appointments have been considered political in nature by observers. Several
high-profile Supreme Court rulings have been favorable to the ruling party on
politically sensitive matters. The pace of judicial appointments and the
government’s posture toward the collegium system have been sources of
institutional friction.
The Election Commission of India has
faced unusually sharp credibility questions during this period. Opposition
parties, civil society organizations, and a growing body of expert opinion have
raised concerns about the Commission’s assertiveness in enforcing the Model
Code of Conduct evenhandedly. The 2024 Lok Sabha elections were considered
broadly free and fair — the outcome itself was proof of that, with the BJP
performing worse than projected. But the process, including VVPAT verification
controversies and the appointment process for Election Commissioners, has drawn
sustained scrutiny.
The Reporters Without Borders World Press
Freedom Index ranked India 159th in 2024 and 157th in 2026 — among the
lowest-ranked democracies in the world. The methodology of this index is
contestable, and the government has credibly argued that India’s 900+
television channels and thousands of print outlets constitute genuine media
plurality. The concern, however, is structural: media ownership has
consolidated dramatically. The acquisition of NDTV by the Adani Group in 2022
and the creation of JioStar through a Reliance-Disney merger have raised
well-documented concerns about editorial independence in the concentrated
ownership environment.
India has moved from ‘Free’ to ‘Partly
Free’ in the Freedom House classification, a designation maintained since 2021.
The V-Dem Institute classifies India as an ‘Electoral Autocracy.’ These
designations are contested and carry Western institutional biases. But the
direction of the trend — even adjusting for methodological limitations — is
difficult to dismiss.
Perhaps the most difficult section to
write — and the most important for institutional credibility — concerns the use
of investigative agencies and the government’s relationship with political
corruption.
India’s Corruption Perceptions Index
score was 36 in 2013 (when the Modi government inherited the UPA’s record). It
stood at 38 in 2024 — a marginal deterioration that prompted the government
itself to distance itself from the methodology. The government’s rhetoric has
been consistently and emphatically anti-corruption. The substantive record is
more complicated.
The Indian Express conducted an
investigation in 2024 that documented 25 opposition politicians facing central
agency investigations who crossed over to the BJP since 2014. Of these, 23
received reprieve — with three cases closed entirely and 20 stalled or placed
in cold storage. In contrast, the same investigation noted that between 2014
and September 2022, 121 prominent political leaders came under the ED’s radar,
of whom 115 were from opposition parties.
The pattern is not entirely new in Indian
politics — the weaponization of investigation agencies predates Modi. But the
scale and systematicity of the ‘washing machine’ phenomenon (as it has come to
be called across party lines, including by a former BJP state president who
first used the metaphor) is unprecedented. This is not partisan allegation; it
is documented by the country’s most respected investigative journalism.
The corrosive effect on institutional
credibility is twofold: it undermines the legitimacy of genuine anti-corruption
action when it occurs, and it normalizes a transactional relationship between
political loyalty and legal jeopardy. This is not a foundation on which rule of
law can be built.
A government that came to power on an
explicit anti-corruption mandate and has expanded the remit and resources of
the ED must be held to a higher standard on this dimension. The ‘washing
machine’ pattern represents a material failure against that standard.
The Modi government’s achievements are
real and should not be elided in an honest assessment. The physical
infrastructure build-out, digital public infrastructure, formalization of the
economy through GST and DBT, and the renewable energy transition are all
genuine program successes.
But twelve years is long enough for
structural failures to be owned. The human capital foundation — in education
quality and public health investment — remains inadequate for the ambitions of
a country claiming to be a future economic superpower. Energy import dependence
has worsened despite ambitious rhetoric. Income and wealth inequality have
increased materially, even as poverty has been reduced. Ecological stress is
unaddressed at systemic scale. And the credibility of democratic institutions —
judiciary, election commission, investigative agencies, and a free press — has
declined by most independent measures.
The investment implications of this
assessment are not trivial. An economy with deteriorating human capital
quality, rising inequality, deepening energy import dependence, and weakening
institutional credibility faces compounding structural headwinds that will
eventually show up in growth sustainability, FDI attractiveness, and market
valuations.
The next election cycle will offer a
fresh mandate — to this government or to an alternative. The structural
challenges catalogued here, however, are not election-cycle problems. They are
generational ones, and they will require a generational commitment of political
will and public resources that Indian politics, across all parties, has thus
far found difficult to sustain.
