India’s economy and elections: Can Narendra Modi’s nation become an economic

New Delhi/London
CNN
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In just a few days, India will commence the world’s largest democratic election.

An estimated 960 million people in a country of 1.4 billion are eligible to vote in the polls, which start on Friday and will take more than a month to complete. Narendra Modi is widely expected to clinch a rare third consecutive five-year term as prime minister.

Under his leadership, India is poised to become a 21st-century economic powerhouse, offering a real alternative to China for investors and consumer brands hunting for growth and manufacturers looking to reduce risks in their supply chains.

While ties between Beijing and the West are becoming increasingly frayed, India enjoys healthy relations with most major economies and is aggressively wooing large companies to set up factories in the country.

So, is the hype around Modi’s India, which remains a largely impoverished country, justified?

The quality of economic data in India can be unreliable, which makes it tough to evaluate the reality on the ground in the world’s most populous nation.

But by using data from official or authoritative sources, CNN has created five charts to show how the country has performed since Modi first rose to power in 2014, and to look ahead at the challenges the next leader will face in managing the world’s fastest growing major economy.

India’s economy was worth $3.7 trillion in 2023, making it the world’s fifth largest, having jumped four spots in the rankings during Modi’s decade in office.

View this interactive content on CNN.com

The South Asian giant’s economy is comfortably placed to expand at an annual rate of at least 6% in the coming few years, but analysts say it should be targeting growth of 8% or more if it wants to become an economic superpower.

Sustained expansion will push India higher up the ranks of the world’s biggest economies, with some observers forecasting the country to become number three behind only the US and China by 2027.

However, India could do much more to raise its gross domestic product (GDP) per person, a measure of living standards according to which it ranked a lowly 147 in 2022, according to the World Bank.

According to Guido Cozzi, professor of macroeconomics at the University of St Gallen in Switzerland, there will be “trickle down effects on per-capita GDP” as the economy grows. But he cautioned that “trickle-down economics is not guaranteed to reduce income inequality, and policies that promote inclusive growth may be necessary.”

Much as China did more than three decades ago, India is beginning a massive infrastructure transformation by spending billions on building roads, ports, airports and railways. Meanwhile, private investors are building the world’s biggest green energy plant.

In this year’s federal budget alone, $134 billion was carved out for capital spending to boost economic expansion.

The results can be seen on the ground with furious construction underway across the nation. India added nearly 55,000 kilometers (around 35,000 miles) to the national highway network, an increase of 60% in the overall length, between 2014 and 2023. Infrastructure development has many benefits for the economy, including creating jobs and improving the ease of doing business.

View this interactive content on CNN.com

In recent years, the country has also built a range of tech platforms — known as digital public infrastructure — that have transformed lives and businesses.

For example, the Aadhaar program, launched in 2009, has provided millions of Indians with proof of identity for the first…