Adnan Abidi | Reuters

India is now the world's fastest-growing major economy, and Prime Minister Narendra Modi has won praise for shepherding that momentum. But the picture for the South Asian giant isn't all rosy, economists told CNBC: As impressive as the country's growth has been, it has not seen that prosperity evenly distributed. That's especially relevant for the prime minister, who is up for reelection in 2019, because inclusive growth had been a major promise during his 2014 campaign. "The Indian economy has shown sustained strong growth under the Modi government, with GDP growth of around 7 percent every year in fiscal 2017-18 and similar growth momentum forecast for 2018-19," Rajiv Biswas, Asia Pacific chief economist at data firm IHS Markit, told CNBC.

Rising inequality

A 2018 report from international nonprofit Oxfam looked at different assessments from before and after Modi's administration to conclude that more and more of the country's income is going "to the top 10% and top 1% of the population." Overall inequality also appears to have grown, according to Credit Suisse's Global Wealth Report, which said the 2018 Gini coefficient for wealth in India rose to 0.854 from 0.83 in 2017 and 0.804 in 2011. The closer a country's Gini value gets to 1.0, the more unequally distributed is its economy. "On most indicators, India is now among the countries with the highest level of inequality. But the analysis also shows that unlike most countries which started with high inequality, inequality in India has continued to rise," Oxfam said. "In the context of the acceleration of growth rate of Indian economy, the rise in inequality raises issues of the distribution of gains from the growth." Oxfam separately reported that its online surveys showed 73 percent of respondents in India said "the gap between the rich and the poor needs to be addressed urgently or very urgently." Jayati Ghosh, professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University, blamed longstanding inequality in the country on a lack of political will and inefficient domestic policies: "Inequality is a political choice. The hold of the elites and powerful lobbies over government policy is very strong," she said. Modi, meanwhile, campaigned in 2014 on the slogan "Sabka Saath, Sabka Vikas," which translates in English to "together with all, development for all." His party manifesto from that election year included some ambitious goals for improving the standard of living for all Indians by creating jobs, increasing profits for farmers, eradicating corruption, curbing inflation and more. Since coming to power, Modi has taken public steps toward keeping some of those promises — and he's made some new ones along the way — while others have seen fewer headlines. Here's how experts think the Indian leader has fared so far.

Attacking 'black money'

Modi made a promise to the electorate in 2014: "I will bring back every rupee stored away in foreign banks and ensure it is used for the rehabilitation of the poor." The prime minister took a huge step toward that goal in 2016 as he moved to demonetize the 500- and 1,000-rupee notes in order to tackle the problem of so-called black money. Undeclared, untaxed and potentially criminal money in the economy was believed to largely exist in big bills, and so the scheme was designed to draw that cash out of the shadows. The thought process was that many bills would not be exchanged, as criminals refused to declare their funds, and so those enterprises would lose out. Experts have been split on how successful the policy was in weeding out black money — with some data showing India may failed in that regard — and there have been questions about undesired consequences such as job losses and note shortages.

"A major negative for PM Modi on the policy front was the demonetization debacle, with a poorly thought-out plan (which) was hastily implemented and created economic chaos for several months," Biswas said. The Centre for Monitoring Indian Economy estimated that about 1.5 million jobs were lost during January through April 2017, following the implementation of the policy in late 2016. Demonetization might not have been the right move for an economy that is largely cash based, according to Ghosh. "India is largely a cash-based economy. Many small businesses and people are cash dependent. Many ordinary Indian citizens lost their jobs due to demonetization. All while the billionaires with huge amounts of unaccounted money stashed away their money electronically," she told CNBC. The government has sought to highlight different reasons for yanking out 86 percent of the currency in circulation as evidence suggested the exercise did little to curb the amount of undeclared income in the country or stifle funding to terror groups. In recent months, government officials have cited a dramatic increase in online transactions in a traditionally cash-dependent economy as a notable achievement of the demonetization drive. On top of that, some have said the demonetization drive was not a total failure because it did bring some benefits to India's banking sector.

Launching a new tax

India's Parliament had for years been discussing the possibility of a Goods and Services Tax (GST) when Modi in 2017 passed a bill establishing such a levy. That move represented the prime minister keeping a promise: Modi's Bharatiya Janata Party (BJP) said in 2014 that it would overcome the bureaucratic deadlock and finally bring "on board all state governments in adopting GST." In addition to drawing in more government revenues, the measure — hailed as the country's biggest tax reform in 70 years — was also aimed at reducing illicit transactions. Although GST had been discussed for many years, "previous governments could not muster the political courage or will to implement this vitally important but politically challenging reform," said Prasenjit K. Basu, a Singapore-based economist and author of "Asia Reborn: A Continent Rises from the Ravages of Colonialism and War to a New Dynamism." Still, there have been criticisms about Modi's rollout of the new tax. Those center on how quickly the government implemented the GST in a business marketplace that was not well prepared to accommodate the procedural changes. For one, slow GST processes reportedly continue to hurt exporters, who are entitled to refunds. Exports in October declined 1.2 percent largely on account of the refund delays, according to an analysis posted on the website of the Reserve Bank of India. Although the Modi-led government had trumpeted the GST as a tax regime made efficient through digital platforms, it has suffered several hiccups on that front. For example, many exporters said they were unable to file refunds for input tax credit, which reportedly resulted in their funds being blocked in the initial months. "The GST policy was not implemented with the needed infrastructure in place. What would have taken other governments three years to gradually implement was rushed in India within months — and that, too, to a less educated population," said Ghosh. Smaller local businesses were most vulnerable to bearing the taxes and additional costs from consulting accounting services, Ghosh added. If implemented well, however, the GST policy could ultimately bring benefits to the country. The tax regime "will help to boost Indian fiscal revenues over the medium to long term, as well as helping to improve industrial competitiveness by significantly lowering logistics costs for domestic manufacturing firms," Biswas said. Tax collections are rising as a share of GDP in the wake of demonetization and GST, according to both a government survey and private-sector analysis.

Creating jobs

The BJP said in its 2014 manifesto that it wanted to tackle the issue of joblessness and Modi reportedly promised that his administration would create 10 million jobs every year. Yet the labor market conditions have not charted a steady improvement under Modi: The country's unemployment rate reportedly hit a two-year high in October. Opposition politicians have seized on such issues to charge the prime minister with not fulfilling his promises on job creation. Modi, for his part, said earlier this year that the criticism was unfounded and he had succeeded in creating 10 million over a year. Opponents have argued about the validity of the prime minister's analysis leading to that figure. Unemployment in India has disproportionately hit young people. Despite 2015's overall unemployment level of 5 percent, 16 percent of youth and higher educated Indians were designated unemployed, according to a report by Azim Premji University. Modi's party's 2014 campaign manifesto had promised to boost labor-intensive sectors such as manufacturing to tackle the problem of employment. However, experts said the manufacturing sector has not been creating enough jobs and the industry faces foreign competition. The pressure Modi faces to create more jobs and fulfill his promise may increase as the rapidly growing youth population enters the workforce and as the manufacturing sector faces potential competition from other Asian giants. "Around 7.5 million young Indians will join the working age population each year over the next three decades, creating a tremendous policy challenge for the Indian government to generate sufficient new jobs to avoid rising unemployment and social unrest," Biswas said.

Helping farmers

The BJP made another 2014 promise to deliver inclusive development by improving infrastructure and boosting the farming sector in the rural regions of India. It said it would take steps to "enhance the profitability in agriculture, by ensuring a minimum of 50 percent profits over the cost of production." Modi had reportedly echoed that promise to raise the country's minimum support price (MSP) offered to farmers to 50 percent above the cost of production. However, months after being elected, the government reportedly argued it would not be able to enhance the MSP for agricultural produce to that level because prescribing such a high price was not possible and such a step would "distort markets" and "be counterproductive in some cases." Across the country, farmer protests have taken place demanding minimum income, minimum prices for crops and unconditional loan waivers.

A man wearing PM Modi’s mask and beats a Tamil Nadu farmer during a play as part of protest seeking compensation for drought in the state, at Jantar Mantar on April 18, 2017 in New Delhi, India. Mohd Zakir | Hindustan Times | Getty Images

Due to pressures from farmers — and with the 2019 elections fast approaching — the government substantially hiked the MSP for 14 summer-sown crops for the 2018-2019 marketing season. In October, the winter-sown crops saw their own minimum price hikes, with reports claiming that the move will ensure a minimum 50 percent return to farmers over the cost of production of those products. Recently, the prime minister reiterated his government's resolve to ensure MSP is 50 percent over the cost of production and forecast a doubling of farm incomes by 2022. Such pronouncements have been met with suspicion due to delays and the timing of such hikes a year before reelection. According to Ghosh, that's because farmers have been one of the group's most disappointed in the Modi administration. "The reason you are getting so many farmers protest is because farmers are possibly the worst cheated. It is the farmers and the youth that have been the most betrayed," she said.

Boosting financial inclusion

Other than promises in the agricultural sector, Modi also made pledged to push for greater financial inclusion: In August 2014, he promised greater access to financial services for Indians who did not have a bank account. That promise has seen real progress, observers said. Compared to mid-2014, when 60 percent of households did not have access to a basic bank account, the government has since extended basic banking services to a large portion of households that had never previously held a bank account. Experts praised that reform, noting that it allows government benefits to move directly into the millions of new accounts. "There could hardly be a more inclusive reform than this," Basu said. During a keynote address this week at the Singapore FinTech festival, Modi described India's progress in bringing financial inclusion to the most remote villages making it a reality for 1.3 billion Indians. Such a feat he described "was not easy in a country of India's size."

Establishing 'Modicare'