Modi can be anything but lame duck as Opposition wants him to be

                  PM Modi chairing a review meeting for various infrastructure sectors

   With a crushing defeat in hand from bitterly fought Bihar elections , Prime Minister Narendra Modi would be in UK for three days beginning November 12. His pre-planned programme includes some flashy events that so far had gone pretty well in all his foreign tours. But this time around, he would be on a foreign soil when his popularity at home has taken a beating, if not plunge.

The good thing is that the  setback to the Prime Minister’s BJP has come about when his government at the Centre has three and half years more to go. So, even though he has lost some early wickets , he has enough time to build his innings and win the match. He has to either win or lose, there are no draws in political innings.

But the trouble is that the wicket is not playing easy. He has dearth of talent in his Council of Ministers , which he is expected to shuffle sooner than later, and his opponents have tasted the blood and would go for a kill to ensure that Modi becomes a lame duck PM.

Well, Modi can be anything but a lame duck. He has survived such adversities as Gujarat Chief Minister. Then, what is that one can expect from him in the coming weeks:

As he has done it just on the eve of his departure for UK, as many as 15 sectors including defence, civil aviation, manufacturing, e-commerce, construction and broadcasting have been liberalised for foreign investors. Caps have been relaxed and more automatic windows have been opened for the entry.

The PM Modi is also reviewing progress of rather tardy implementation of the infrastructure projects, which are now considered key to reviving the economic growth. Even as the government gets some consolation that India has been acknowledged as the bright spot by the likes of the IMF and the World Bank and it has upgraded its ranking in the ease of doing business, a host of sectors remain in stress.

Importantly, these sectors include the crucial agriculture which is a source of employment for over half the Indian population of 1.3 billion. The rural demand is  subdued while the industries like telecom, real estate, steel, power, roads, construction are in heavy debt with promoters finding it difficult to service the loan. To expect the private sectors to revive growth and investment in these sectors would be naive. Either the government brings in resources or funds come from abroad. These are the only alternatives which Modi and his FM Arun Jaitley know it too well.

The trouble is the government has resource constraints while the foreign investment is drying, especially in the capital market through the foreign institutional investors. As per the latest RBI data, India attracted total foreign investment of USD 73.56 billion in 2014-15, riding on the Modi wave. Of this , USD 40.93 billion were in the form of portfolio investment while the rest were FDI.  The situation is just the reverse this year. In the first half of the fiscal year (April-September), India’s total foreign investment is just about USD 8.29 billion resulting from negative USD 8.78 billion in the capital market  and positive FDI of USD  17.07 billion.

 In the comparable half year (fiscal) in 2014-15, the FDI was USD 15.79 billion and portfolio USD  22.20 billion. So, a huge fall in portfolio has to be made up. That is what is required also to bring about a current account and the consequent foreign exchange  stability, which cannot depend only on falling crude oil.

 In any case, there are both political and economic compulsions for PM Modi to stay focussed on his economic agenda, for he cannot afford any more Bihar.