2017 will be a crucial year for Modi

All eyes and ears are on what Prime Minister Narendra Modi will say this evening as 2016 bids goodbye.

While he may not make any drastic announcements that would spoil the new year revelry, he is likely to speak on the success of remonetisation and throw broad hints of the economic road ahead.

Today’s address and the February 1 Budget will offer some feel-good messages to low and middle income classes. The Prime Minister will point to these feel-good factors as direct benefits of demonetisation. With that he will hope to win over the confidence of the large chunk of middle and lower class who form bulk of the voters bank.

If the cash crunch eases considerably early 2017, the next move would be judged by Modi’s ability to, ONE , deliver direct benefits to low and middle income groups and, TWO, make a visible difference to growth prospects over the next three years.

The BJP is confident that Modi’s war on black money will yield political dividends.

A big task ahead is not just kickstart the economy post demonetization but also generate brisk economic activity . Big spends on infrastructure and rural economy would be the likely key policy choices on this.

On the political front, if Modi manages to make substantial gains in Uttar Pradesh and Punjab early 2017 and the Gujarat elections later in the year, Modi’s political reputation would scale new heights not reached even in 2014. This will give him the confidence and the elbow room for reforms in the last two years of his term.

The results of assembly elections will also partly determine whether the Prime Minister gets a President and Vice-President of his choice. If a Modi-led BJP wins UP, the chances of the PM ensuring his pick wins the presidential contest will be bright. If UP doesn’t go BJP’s way, all will not be lost for the party’s presidential nominee, but the Opposition will smell a chance.

All said, 2017 will be a year that will determine Modi’s future. It will also leave a permanent mark on his tenure.