Two Years, One Trajectory: Has Modi 3.0 Laid the Foundation for a New Era of Indian Governance

Two Years, One Trajectory: Has Modi 3.0 Laid the Foundation for a New Era of Indian Governance

June 4, 2024. The results of India's 18th Lok Sabha election came in and surprised almost everyone. The BJP won 240 seats, short of the 272 needed for a single-party majority for the first time since 2014. For the opposition, the night felt like the beginning of something. For the BJP-led NDA, it was a moment that demanded reinvention, coalition building, and recalibration.

And yet, sitting here on June 2, 2026, seven days before the government's second anniversary, the story of Modi 3.0 looks significantly more consequential than that election night suggested it would be.

India has become the fourth-largest economy in the world. It has launched its first commercial semiconductor fabrication facility. It has elevated strategic partnerships with five nations in a single tour that generated nearly 40 billion dollars in investment commitments. It has implemented the Uniform Civil Code in three states. It has passed legislation on women's reservation that has been debated since 1949. It has run the world's most complex state elections across five states simultaneously and delivered stable results in all of them.

The central question Bharat and Beyond asks today is not a partisan one. It is the serious question that anyone who cares about India's future must ask: have the first two years of Modi 3.0 laid the foundation for a genuinely new era of Indian governance and development?

The answer, this analysis argues, is yes, partially, and the incompleteness is as important as the progress.

India After June 2024: The Coalition That Surprised Everyone

The formation of the Modi 3.0 government was itself a governance achievement. Coalition governments in India have historically been synonymous with political instability and policy paralysis. Governments held hostage to the veto power of regional allies have collapsed mid-term, reversed policies mid-implementation, and produced the kind of indecisive governance that makes investors nervous and citizens cynical.

The NDA government that took office on June 9, 2024 has been different in character if not in composition. The TDP under N. Chandrababu Naidu and the JDU under Nitish Kumar, the two most important coalition partners, extracted political price in terms of budget allocations and project approvals for Andhra Pradesh and Bihar. But they did not extract that price in governance paralysis or constant threats of withdrawal. The government has functioned with a decisiveness that is unusual for coalition arrangements of this kind.

The coalition's resilience has rested on three factors. First, the NDA partners have ideological alignment on the broad governance agenda of infrastructure, digital transformation, and welfare delivery. Second, PM Modi's personal authority within the coalition has remained substantially intact despite the reduced BJP majority, reflecting the absence of any credible leadership alternative within the NDA's internal politics. Third, the opposition INDIA bloc's failure to stay united and present a coherent alternative has reduced the political incentive for coalition partners to create instability.

The result has been a government that, despite governing without a single-party majority for the first time since 2014, has moved on multiple legislative and policy fronts with a consistency that surprised many observers who expected the coalition arithmetic to produce caution and drift.

The Economy: Fourth-Largest in the World

The most headline-grabbing economic achievement of India's recent years is the one that matters most as a statement of national trajectory: India has become the fourth-largest economy in the world by nominal GDP, overtaking Japan in 2025.

India's GDP for FY 2025-26 is estimated at approximately Rs 357 lakh crore in nominal terms, equivalent to approximately 3.96 trillion dollars. Real GDP growth is estimated at 7.4 percent for FY26, retaining India's position as the fastest-growing major economy for the fourth consecutive year. India's cumulative FDI inflow stood at 1.14 trillion dollars between April 2000 and December 2025.

These are remarkable numbers. But the most honest economic analysis of Modi 3.0 must acknowledge what they sit alongside.

Manufacturing's share of GDP remains stuck at approximately 14 percent. The government's ambition of reaching 25 percent manufacturing share by 2025 was clearly not achieved. Agriculture, which employs approximately 45 percent of India's workforce, contributes only about 16 percent of GDP, a productivity gap that represents one of the most persistent structural challenges in the Indian economy.

Per capita income crossed the 3,000 dollar mark in FY25-26, a psychological threshold. But it remains far below the World Bank's upper-middle-income threshold of approximately 13,845 dollars per person. India crossed 3,000 dollars per head while its Viksit Bharat 2047 target requires reaching 18,000 to 20,000 dollars per capita. Getting from 3,000 to 18,000 in 21 years requires sustained growth at 7 percent plus annually across two full decades. That is achievable. It is not guaranteed.

The most sobering assessment comes from looking at the first year of Modi 3.0 in isolation. In FY 2024-25, India's real GDP growth was 6.5 percent, compared to 9.2 percent in the previous year. That moderation in growth momentum in the very first year of the new government reflects the broader global economic headwinds, the impact of US tariffs on merchandise exports, and the structural challenge of sustaining high growth rates as the base expands. The recovery to 7.4 percent in FY26 is encouraging. Whether it is a return to a sustainable 7 to 8 percent trajectory or a temporary uptick will be clearer by 2027.

The Economic Survey 2025-26 projects real GDP growth of 6.8 to 7.2 percent for FY27. Gross NPA of banks reached a multi-decade low of 2.2 percent in September 2025, reflecting the banking sector clean-up that took years and is now delivering results. S&P Global upgraded India's sovereign credit rating after an 18-year gap, reflecting improved financial resilience. Direct tax returns filed increased from 6.9 crore in FY22 to 9.2 crore in FY25, indicating the formal economic base expanding.

Production Linked Incentive schemes across 14 sectors attracted actual investment of more than Rs 2 lakh crore by September 2025, generating additional production and sales of over Rs 18.7 lakh crore and creating more than 12.6 lakh jobs. These are meaningful numbers, though still well short of the employment generation scale that India's annual addition of approximately 7 to 8 million new workers to the labour force requires.

The Semiconductor Mission: India's Most Strategic Industrial Bet

Perhaps the single most consequential long-term industrial decision of the Modi 3.0 period is the acceleration of the India Semiconductor Mission.

On February 28, 2026, PM Modi inaugurated Micron Technology's Semiconductor Assembly, Test and Packaging facility in Sanand, Gujarat, marking the commencement of commercial production. This was India's first commercial semiconductor manufacturing facility and a milestone that the government has been building toward for years.

As of October 2025, 10 semiconductor projects across six states have been approved, with total investments exceeding Rs 1.6 lakh crore, equivalent to 18 to 19 billion dollars. These include India's first Silicon Carbide compound fab and an advanced packaging unit.

The strategic logic of the semiconductor mission is not merely economic. Semiconductors are the foundational technology of every modern industry: smartphones, automobiles, defence systems, AI infrastructure, medical devices, and telecommunications. A country that cannot make chips is strategically dependent on those that can. India's semiconductor mission is the most direct expression of strategic self-reliance in the industrial domain.

The partnership signed with the Netherlands during PM Modi's May 2026 tour, giving India institutional access to ASML's semiconductor manufacturing equipment ecosystem, adds the technology partnership dimension to the domestic manufacturing infrastructure being built. The combination of domestic fab investments and international technology partnerships gives the semiconductor mission a credibility it would lack with either element alone.

Infrastructure: The Most Visible National Transformation

There is no domain where India's transformation over the past 12 years, and specifically during Modi 3.0's first two years, is more visible and more measurable than infrastructure.

National highway length has nearly doubled, growing from 91,287 km in 2014 to 1,46,145 km by 2024. The government achieved a construction pace of more than 33 km per day, compared to 8 to 11 km under previous governments. The Union Budget 2025-26 allocated a record Rs 11.21 lakh crore for capital expenditure, representing 3.1 percent of GDP.

The airport network has grown from 74 airports in 2014 to 157 airports by 2024. More than 1,300 railway stations are being renovated, with some being built with airport-like amenities. The metro rail network has expanded from 250 km across a handful of cities in 2014 to 1,000 km across 21 cities by 2024, making India's metro network the third-largest in the world, with another 919 km under construction in 26 cities.

Vande Bharat trains, India's most visible symbol of railway modernisation, now operate on more than 50 routes with 136 services. In January 2026, PM Modi flagged off India's first Vande Bharat Sleeper train connecting Howrah in West Bengal with Guwahati in Assam, opening the long-distance comfortable travel market that the existing chair-car Vande Bharat does not address. The sleeper version's trial runs at 180 km per hour represent a genuine technical achievement from a railway that was building primarily on British colonial-era infrastructure as recently as a decade ago.

The Kavach automatic train protection system, which prevents trains from colliding by automatically stopping them when they get too close on the same track, is being deployed across key routes. The Odisha train collision of 2023 was a devastating reminder of how much remained to be done on railway safety. Kavach deployment has accelerated since then, though critics rightly point out that full network coverage is years away and that ticket prices have risen while senior citizen concessions have been removed, creating genuine affordability concerns for India's middle and lower-income railway passengers.

The PM Gati Shakti National Master Plan, a digital infrastructure planning system that maps all infrastructure projects geographically and coordinates across ministry silos, has reduced logistics costs from 14 percent to approximately 9 to 10 percent of GDP, with a target of reaching 8 percent by 2030. This reduction in logistics costs is not visible in any single government announcement but its impact is felt by every Indian business that moves goods from one part of the country to another.

Digital India: The World's Most Ambitious Public Digital Infrastructure

The digital transformation of India under the decade of Modi governance has produced what is arguably the world's most sophisticated public digital infrastructure in any developing country, and one that Western countries are increasingly studying and attempting to replicate.

Broadband users have grown from 6.1 crore in 2014 to nearly 95 crore by August 2024. The cost of wireless data dropped from Rs 308 per GB in 2014 to Rs 9.34 in 2022, one of the most dramatic reductions in the cost of any technology service anywhere in the world in any period. Rural telephone connections grew from 377.78 million in 2014 to 527.34 million in 2024.

5G rollout, beginning in October 2022, extended high-speed connectivity to 99.6 percent of districts within less than two years of launch. UPI processed over 100 billion annual transactions by 2025. By January 2026, more than 31 crore unorganised workers had been registered on the e-Shram portal, 54 percent of them women. The digital economy's contribution to national income is projected to rise from 11.74 percent in 2022-23 to 13.42 percent by 2024-25.

By March 2025, 55.02 crore bank accounts had been opened under PMJDY, of which 36.63 crore are in rural and semi-urban areas. Direct Benefit Transfers have reached over 70 crore beneficiaries and transferred more than Rs 42 lakh crore since 2014, the largest digital financial inclusion programme in human history.

The PM also inaugurated a 250 MW green AI-ready data centre campus at Dholera SIR in Gujarat in February 2026, signalling India's ambition to build the physical infrastructure needed to support its own AI development rather than depending entirely on overseas computing capacity.

India's digital public infrastructure has become a global export. Countries across Africa, Latin America, and Southeast Asia are adopting India Stack components, UPI-style payment systems, and Aadhaar-style digital identity frameworks, making India's DPI experience one of the most significant technology contributions India has made to the developing world.

The Viksit Bharat 2047 Vision: What It Is and Whether We Are on Track

Every governance decision of the Modi 3.0 government is explicitly framed within the Viksit Bharat 2047 vision: the goal of India becoming a fully developed nation with high per capita income, universal access to quality public services, and global strategic leadership by the centenary of independence.

Viksit Bharat is not a government programme. It is an aspirational framework that organises policy across infrastructure, education, health, agriculture, industry, and foreign policy around a single 21-year horizon. The government has created working groups across ministries, state governments, and civil society to contribute to the Viksit Bharat roadmap.

The framework's ambitions are enormous. Per capita income of 18,000 to 20,000 dollars by 2047, requiring the economy to grow at 7 percent plus for two full decades. Universal access to quality healthcare, education, and housing. India as a leading global technology and manufacturing power. Indian institutions and standards being globally referenced.

Whether the first two years of Modi 3.0 are on track for this vision depends enormously on which metric you examine. On infrastructure, digital connectivity, and global influence, the trajectory is consistent with Viksit Bharat ambitions. On manufacturing share, employment generation, agricultural productivity, and per capita income growth velocity, the distance remaining is sobering.

The per capita income calculation is particularly instructive. India needs to move from approximately 3,000 dollars per head today to 18,000 to 20,000 dollars by 2047. That requires the average Indian's income to increase sixfold in 21 years. This is achievable historically: South Korea accomplished a comparable transformation. It requires sustained political will, institutional consistency, and the absence of major shocks across six different government tenures. Whether any country can maintain such consistency across two decades of democracy is a genuine governance question, not a rhetorical one.

India's Rising Global Influence: The Most Dramatic Two-Year Change

If there is one domain where Modi 3.0's first two years have produced the most dramatic visible change in India's position, it is global influence.

The May 2026 five-nation tour, covering the UAE, Netherlands, Sweden, Norway, and Italy, produced 57 specific outcomes, five strategic partnership elevations, nearly 40 billion dollars in investment commitments, the launch of the India-Sweden AI Corridor, the India-Norway Green Strategic Partnership, India-Italy Special Strategic Partnership, the India-Nordic Green Technology and Innovation Partnership covering all five Nordic nations simultaneously, the 30 million barrel petroleum reserve commitment from ADNOC, and the EU-India FTA being called the mother of all deals.

This is not the description of a country that is diplomatically peripheral. It is the description of a country that is being actively courted by the world's most sophisticated economies across every strategic domain simultaneously.

The Middle East crisis of 2026, triggered by the US-Israel offensive against Iran, tested India's diplomatic architecture under genuine pressure. India condemned the attacks on the UAE, called for Hormuz freedom of navigation jointly with the Netherlands, maintained engagement with both sides of the conflict, and secured energy supply agreements that directly protected Indian households from the worst effects of the oil price shock. This is strategic autonomy working under real world conditions, not just theoretical positioning.

India's S&P sovereign credit rating was upgraded in 2025 after an 18-year gap. India secured the 38th position in the Global Innovation Index 2025, up from 81st in 2015. Three sovereign credit rating upgrades were recorded in 2025 alone.

Welfare and Social Development: The Gains That Reach Every Household

The governance narrative of Modi 3.0 cannot be told without discussing the welfare delivery that reaches India's most economically vulnerable citizens directly.

The Multidimensional Poverty Index declined from 55.3 percent in 2005-06 to 11.28 percent in 2022-23, reflecting decades of combined policy effort. PMJDY has opened 55.02 crore bank accounts. PM Awas Yojana has contributed to the construction of over 4 crore pucca houses. More than 12 crore tap water connections have been provided through Jal Jeevan Mission. Ayushman Bharat now covers over 22 crore citizens.

The Orunodoi scheme in Assam was expanded in the BJP's 2026 election manifesto to provide Rs 3,000 monthly to women, mirroring the Sankalp Patra promise made for West Bengal. The expansion of women-focused direct cash transfers represents a significant evolution in welfare architecture: from supply-side interventions like building schools and hospitals to demand-side transfers that give women direct purchasing power and economic agency.

The Challenges That Cannot Be Ignored

A balanced assessment of Modi 3.0 requires naming the challenges that remain large and unresolved.

Employment is the most acute. India adds approximately 7 to 8 million new workers to the labour force every year. PLI schemes created 12.6 lakh jobs across 14 sectors, a meaningful number but not sufficient at the scale India needs. The formal employment generation question, of whether India's growth is creating enough quality jobs for its young people, remains the government's most important unresolved governance challenge.

Agriculture is the second. Agriculture employs nearly 45 percent of the workforce but contributes only 16 percent of GDP. This productivity gap is not primarily a government policy failure. It reflects deep structural features of Indian land ownership, water access, and market connectivity that no single government in a five-year term can fully transform. But the rural-urban income gap that this productivity differential produces is the source of much of India's social and political tension. Minimum Support Price debates, farmer protests, and the agricultural distress narrative that opposition parties deploy effectively all flow from this structural gap.

Urban governance is the third. India's cities are growing faster than their infrastructure can accommodate. Urban flooding, air quality, traffic congestion, housing affordability, and public health infrastructure in secondary cities are challenges that require a level of urban governance capacity and financial resource allocation that most Indian cities do not yet possess.

Income inequality is the fourth. India's Gini coefficient has risen during the period of high economic growth. The benefits of rapid growth have been distributed unevenly, with urban formal sector workers and capital owners benefiting disproportionately compared to agricultural workers and informal sector employees. A country that is the fourth-largest economy in the world but has per capita income of 3,000 dollars faces a distribution question that economic growth alone cannot resolve.

What It Means for India's Youth

For India's generation born between 1995 and 2010, the first two years of Modi 3.0 are defining the economic landscape they will navigate for the next 40 years.

The semiconductor mission means that high-skill chip design, manufacturing, and packaging jobs will be available in India within this decade for the first time. The AI and digital infrastructure investments mean that India's technology sector can retain and employ more of its engineering talent domestically rather than exporting it to Silicon Valley. The strategic partnerships with Nordic countries, Italy, the Netherlands, and the UAE create international collaboration pathways for Indian researchers, entrepreneurs, and professionals that did not exist five years ago.

The India-EU FTA, when implemented, gives Indian startups and businesses duty-free access to 450 million European consumers. The India-Italy Start-Up Bridge, the India-UAE soft-landing package for Indian startups, and the Nordic innovation partnerships all create international market access points for the generation of Indian entrepreneurs that is currently building companies in Bengaluru, Hyderabad, Pune, and Delhi.

The 8 Exaflop supercomputing cluster agreed between India's C-DAC and UAE's G42 will, when operational, give Indian AI researchers computing infrastructure comparable to what is available in leading global AI labs. This matters for the generation of Indian data scientists and AI engineers who currently find that their most ambitious work requires computing resources available only abroad.

Has India Entered a New Governance Era: The Honest Answer

Bharat and Beyond's honest assessment of Modi 3.0's first two years is that India is in a genuine governance transition, not a completed transformation.

The transition is from a governance model defined by announcement and aspiration to one defined by execution and accountability. From a development model defined by welfare allocation to one defined by infrastructure creation and digital enablement. From an international positioning defined by non-alignment passivity to one defined by multi-alignment activism.

These transitions are real and they are producing measurable outcomes. The infrastructure numbers are real. The semiconductor mission is real. The global partnership architecture being built is real. The welfare delivery improvements measured by declining multidimensional poverty are real.

But the transition is incomplete. Manufacturing is still stuck at 14 percent of GDP. The employment generation gap is real. Agricultural productivity remains a structural challenge. Urban governance quality is far below what India's growing cities require. Income inequality has grown alongside economic growth.

The comparison with Modi 1.0 and Modi 2.0 is instructive. Modi 1.0 was defined by institution-building, the JAM trinity, GST reform, insolvency code, and the establishment of governance mechanisms that would take years to show results. Modi 2.0 was defined by security and constitutional actions: Article 370, CAA, the COVID response, and the recovery from the pandemic shock. Modi 3.0, two years in, is defined by execution at scale: turning the institutions built in 1.0 into delivery machines, deploying the connectivity infrastructure at speed, and building the global partnership architecture for India's next two decades.

PM Modi himself articulated this continuity in April 2025 when he said that the successes of the past 10 to 11 years have laid a strong foundation for a developed India, and that India has moved beyond incremental change to impactful transformation.

He is right about the direction. Whether the pace is sufficient for Viksit Bharat 2047 is the question that the next 21 years will answer.

The Conclusion: Building Tomorrow's India, Today

On June 9, 2026, the Modi 3.0 government will complete two years in office. The occasion deserves both celebration of genuine achievement and honest acknowledgment of work remaining.

Two years ago, the coalition arithmetic made many observers predict caution, drift, and political management at the expense of governance delivery. What has happened instead is a government that has maintained its execution pace despite coalition constraints, advanced an infrastructure agenda of historic scale, positioned India as a global diplomatic player of the first order, and made the economic and technological bets that will define India's competitive position in 2035 and 2045.

The challenges that remain, employment, agriculture, urban governance, income distribution, are not small. They are structural, deep, and not solvable within any single government term. They require sustained policy commitment across multiple governments and decades. The governance question for India is not whether these problems are being solved quickly enough in any given year. It is whether the institutional, infrastructure, and human capital investments being made today will compound into the conditions that solve them by 2047.

On that question, the first two years of Modi 3.0 have moved the needle in the right direction. Not as far as the most ambitious version of Viksit Bharat requires. But further than most coalition governments of this kind in India's history have managed.

India is the world's fourth-largest economy. It has the world's most sophisticated public digital infrastructure. It is building its first semiconductor fabs. It is running the world's most ambitious renewable energy expansion. It is deepening strategic partnerships with every major economy simultaneously. It just passed the Uniform Civil Code in its largest northeastern state. And it is running the world's most consequential democratic experiment at a scale that no other country in human history has attempted.

The foundation is being laid. The construction is underway. The building is not yet complete.

But if the next 21 years build on what these two have established, India's promise to its 1.4 billion citizens, and to the world, will be kept.

Stay with Bharat and Beyond for continued analysis of India's governance, policy, and global trajectory.