But the war of words among top political rivals has also risen to a crescendo with uglier exchanges as Mr Modi battles hard to clinch the outcome for BJP in the last three phases of polling, April 30 to May 12, with sizeable chunks of seats in UP (47) and Bihar (20) at stake. His forays into West Bengal, which has 32 seats more to fill, have also encountered angry rebuffs from TMC leader Ms. Mamata Banerjee.

In four-cornered contests in UP, BJP must get the better of major rivals, SP of Mr Mulayam Yadav and BSP of Ms. Mayawati, as also of the Congress in order to make sure of its electoral triumph. With politics of hate being played out at its worst, Hindutva extremists including Mr Ram Dev have had to be disciplined by the Election Commission.

For the Congress, fighting a lonely battle in UP amid slanging matches, Ms. Priyanka Gandhi has concentrated on retaining the seats of her mother and brother at Rae Bareilly and Amethi while mother Ms. Sonia Gandhi is trying a salvage operation in Telengana and the rest of Andhra Pradesh, all involving multi-party contests for a total of 42 seats.

Hundreds of millions who have voted would certainly expect any new government to govern and deliver benefits for all. In recent media interviews, Mr Modi and Mr Jaitley, tipped for Finance portfolio, believe that the political change at the Centre by itself would give “good signal” all around and help in reviving investment. Mr Modi claims his policies would have a “pro-people vision” in advancing growth and jobs.

It is one thing to run down everything that the UPA Government did or failed to do, as Mr Modi has insidiously done over months, but quite another to take an objective assessment of not only the current state of economy to inherit but also the manifold challenges that it would have to confront. There are no quick fixes for present policy weaknesses cited by Mr Modi and Mr Jaitley.

Certainly, a new Government is entitled to be given time to frame its agenda and provide a coherent framework of policies with its own economic vision which could also get partly reflected in the Budget for the rest of the current fiscal year. There are already a few positives like a fiscal deficit reduction to 4.6 per cent of GDP in 2013/14 and current account deficit brought down from 4.7 per cent of GDP in 2012/13 to below 2 per cent in fiscal 2014. Reserves stand strengthened with an addition of 28 billion dollars.

This should be of some relief to the new Government and the UPA Finance Minister Mr Chidambaram says going forward the economy would only “grow stronger”. In other words, the new government does not face any threats of a macro-economic nature for launching urgent corrective actions. Mr Modi and Mr Jaitley have, however, emphasized speedy clearances for pending projects and for new investment proposals.

In the light of emerging trends in 2013/14, there is a consensus forecast on GDP growth of 5.5 per cent in 2014/15 (from below 5 per cent in fiscal 14) and above 6 per cent in fiscal 2016. This is also borne out in the IMF’s Asian Regional Outlook which projects India’s growth at 5.4 per cent this year rising to 6.4 per cent in Fiscal 2016.

Nevertheless, the challenge for the next Government is to remove supply bottlenecks which mainly accounted for the generalized slowdown of the economy, especially in sectors of industry and, to a lesser extent, in services. Growth in the current year is assumed to come from some of already approved investment projects going into stream and exports benefitting from improving global demand with recovery, mainly in USA and other advanced countries.

Meanwhile, IMF which had been no less critical of policy deficiencies in India over the last year, has noted that corrective steps taken on both fiscal and current account sides since have lifted business confidence. BJP leaders have said that their priority would be to accelerate project processes for an investment rebound along with policies based on a “reasonably liberal approach”.

The major challenges for his Government, if it takes hold, would be in the realm of fiscal and monetary policies – how far the new government would go on the path of fiscal consolidation without touching subsidies, given Mr Modi’s resistance and how much leeway it would give for the RBI to continue with its tightened monetary policy to contain consumer inflation raging between 8 and 9 per cent.

Mr Jaitley has called for interest rate cuts to resuscitate real estate (housing sector) and help financing in infrastructure and low-cost manufactures. It does not seem feasible yet with the current levels of inflation which are yet to reflect fuel price revisions. A whole range of decisions would have to be taken on fiscal path, energy pricing (diesel, natural gas and electricity) and tax reforms for widening the base and additional resource mobilisation for public investments including infrastructure.

The Tax-GDP ratio has to be raised to finance economic and social development. Relatively, the BJP policy-makers have said little on how in their scheme of things, growth would be designed to promote social development while for employment, they rely on infrastructure, urbanisation and development of scores of cities and corridors of manufacture.

Overall, what is unfolding is more of the same that UPA professed to advance but lacked the grit for implementation. A fuller picture of the next Government’s economic and other policies and programmes should become available shortly after its formation. Tax experts have said the next government’s priority should be to remove uncertainty, avoiding retrospective tax amendments, to allay concerns of foreign investment firms.

Two serious risks are ahead for India, a sub-normal monsoon as predicted till now and a possible tightening of global liquidity leading to rise in interest rates across the world which could trigger risk aversion and volatile capital flows. The latter possibility is seen if the US economy maintains its current tempo of growth and job additions which could induce the Federal Reserve to reverse gradually its (near zero rate) monetary accommodation earlier than the spring of 2015.

On the fiscal front, IMF has suggested that gradual consolidation remains appropriate for most economies in Asia. But adherence to fiscal adjustment path would support confidence and free resources for public investment and social spending. Tax reforms and change in the composition of spending so as to prioritize infrastructure and social spending should also help promote inclusive growth

Again on monetary policy – one of the areas likely to command early attention - IMF citing relatively high inflation rates suggests further increases in the policy rate (8 per cent) to put inflation firmly on a downward path. It expects CPI to be 8.5 per cent by the end of 2014 and 7.5 per cent by end-2015. (IPA Service)