PM Modi signs first file after taking charge for 3rd time

After being sworn in as Prime Minister for the third time, Prime Minister Narendra Modi on Monday signed his first file authorising release of 17th instalment of PM Kisan Nidhi.

The decision to distribute around ₹20,000 crore is expected to benefit 9.3 crore farmers.

"Ours is a Government fully committed to Kisan Kalyan. It is therefore fitting that the first file signed on taking charge is related to farmer welfare. We want to keep working even more for the farmers and the agriculture sector in the times to come," PM Modi says after signing the file.

PM Modi took oath as Prime Minister on Sunday evening. “I look forward to serving 140 crore Indians and working with the Council of Ministers to take India to new heights of progress,” he wrote in a post on microblogging platform X.

The prime minister will have to navigate coalition politics for the first time in more than a decade as the Bharatiya Janata Party (BJP) failed to bag 272 seats to form a majority government, pushing it to rely on its pre-poll alliance with the National Democratic Alliance (NDA) partners.

While PM Modi secured a third term in office, the BJP’s greatly weakened position marks a significant shift in the political landscape, according to Moody’s.

The election outcome deviated significantly from consensus expectations. The BJP, which won 303 seats in 2019, had been tipped to secure 360 to 399 of the 543 contested seats this time around. Instead, it came away with just 240. The Indian National Congress secured 99 seats, up from 52.

In the case of the BJP, its National Democratic Alliance with several other parties won 292 seats, while the Indian National Developmental Inclusive Alliance, of which the INC is the major partner, won 232 seats. Both outcomes mean that alliances matter, says Moody’s.

The results mean dynamics are about to change in the parliament, the rating agency says. “Coalition partners will gain influence and leverage in policy decisions, allowing for a more inclusive approach to governance,” it says.

The BJP will need to use the tools of negotiation and compromise to maintain a cohesive government, Moody’s says, adding that this will likely slow decision-making and potentially dilute some of the party’s key policy initiatives.

Reduced political stability and the need for consensus building that is inherent with coalition government might erode investor confidence in the near term, the rating firm says.

“The effectiveness of policies implemented by the coalition government will determine India’s growth trajectory for the next five years, if not more. The union budget, due in the September quarter, will be an early indicator of policy priorities, including short- and long-term responses to some of those key economic challenges,” it says.