PM Modi | The big challenges

At 10.40 on the morning of July 27, when Dharmendra Pradhan arrived at Parliament, MPs from the Bharatiya Janata Party (BJP) and the National Democratic Alliance (NDA) gathered to receive him. They walked the former Union education minister in, chanting ‘Dharmendra Pradhan zindabad’, and put a Maithili cap and a shawl on a man who had resigned 48 hours earlier under pressure from the street.

It was the kind of welcome a leader gets on his return from a win. But this was more a show for the BJP cadre than for the Opposition. Having a minister step down in the face of a major agitation is a situation the ruling BJP has never faced since 2014 when Narendra Modi led the party to a famous Lok Sabha victory. The rank and file, likely feeling let down when the prime minister asked Pradhan to resign as education minister, had to be assuaged—just as much as Gen Z had to be calmed after the widespread outrage over lapses in the National Eligibility-cum-Entrance Test (NEET). The only comparable retreat was the withdrawal of the farm laws in November 2021, but that was after a year of sustained protests.

In addition to Pradhan’s resignation, Modi passed a tough new law for exam malpractices in Parliament and also set up a high-level task force headed by Nandan Nilekani, the IT czar and architect of the Aadhaar project, to recommend reforms in examinations conducted by the National Testing Agency (NTA), including NEET. But NEET is just one crisis for Modi. Looming ahead are several other formidable challenges in politics, the economy and governance—not least the task of rescuing the party image from the ignominy of the recent theft of donations at the Ram temple in Ayodhya, culminating in the resignation of two prominent trustees.

1. WINNING BACK GEN Z

What must be troubling the prime minister is not that the NEET agitation exploded, but that he could not talk it down himself. No politician in India has worked harder at this constituency: Pariksha Pe Charcha every examination season, the appearances with sportspersons, the videos of a 75-year-old playing e-sports, the studied openness to new technology. But when Gen Z anger erupted over the lack of accountability in the NEET leaks and cancellation, it cut at the very core of his credibility.

Modi expects the announcement of the Nilekani-led task force to go a long way to assuage Gen Z’s feelings. The proposed technology-led overhaul, the prime minister has assured the youth, will make the examination system trusted, transparent and error-proof while changing the structure of the agency that runs it. The task force includes former ISRO chairman S. Somanath, former Intelligence Bureau director Tapan Deka, IIT Madras director V. Kamakoti, former education secretary Anita Karwal and logistics expert Amrit Lal Meena.

On the face of it, this appears to be a strong response to the NEET controversy. But there have been two detailed reform blueprints before—the K. Radhakrishnan Committee report of 2024 and the one by the Parliamentary Standing Committee the following year. Both identified weaknesses in the NTA and suggested specific ways to prevent examination leaks. Many of those recommendations remain unheeded.

The Radhakrishnan panel’s proposals on question papers were remarkably specific. It called for a trusted pool of vetted experts, clear rules for selecting paper-setters and vetters, conflict-of-interest declarations and non-disclosure agreements. Setters were preferably not to work in their home cities. Separate teams were to prepare multiple papers, while language experts had to certify that no outsider had seen the content. The panel also wanted large question banks from which papers could be assembled close to the exam date through a secure and randomised process. This would break the direct link between an individual expert and the final paper.

These proposals addressed the very point at which the 2026 NEET leak allegedly occurred. According to the investigation detailed in the documents, some experts worked both as paper-setters and translators, giving a small group access to large parts of the examination. Had the recommended separation of roles, conflict checks, secure question banks and random selection been followed, the alleged insiders might never have known which questions would appear and the leak could plausibly have been prevented.

Of the 101 recommendations proposed by the Radhakrishnan committee, the government has accepted all—but implemented only 57 so far. The measures delayed include multi-session testing for very large examinations, a multi-stage NEET-UG and a hybrid model in which encrypted papers travel digitally and are printed at the examination centre. The reforms introduced for 2025 hardened the logistics chain but left the paper-setting stage largely untouched. That is exactly where the system broke in 2026. The new task force must therefore define the terms of reference for its work, audit why the earlier recommendations were not implemented and translate the Radhakrishnan committee’s recommendations into an operational blueprint.Otherwise, its formation will appear as nothing more than a tactical move to quell the dissent on the streets.

To win Gen Z’s trust, Modi will have to address not just the current NEET crisis but also the larger issue of mismatch between education and jobs. The numbers are unambiguous. The Periodic Labour Force Survey for June 2026 puts unemployment among 15- to 29-year-olds at 16.2 per cent against an overall rate of 5.5 per cent; the figure is higher (18.2 per cent) in urban India, and is above 25 per cent for young women. Annual data is even more dismal. Unemployment for those with secondary education and above was 6.5 per cent in 2025 against 0.3 per cent for the non-literate.

Modi’s own initiatives to bridge the skill gap have yielded underwhelming results so far, its sharpest illustration being the Prime Minister’s Internship Scheme. Across its first three pilot rounds, companies made about 186,000 offers. Just over 16,000 young people joined, roughly one and a half per cent of those who applied. From April this year, the scheme was thrown open to MSMEs, global capability centres and statutory bodies, and the monthly stipend was raised from Rs 5,000 to Rs 9,000. The government needs to come up with a radical revamp of the education system with a heavy emphasis on vocational skills and upgrades to ensure youth are gainfully employed. The National Education Policy (NEP) 2020 has plenty of good intentions but must be implemented rapidly.

2. BOOSTING THE ECONOMY

What has perplexed many is why an economy said to be growing at more than 7 per cent has failed to deliver a broader sense of prosperity. Private investment has remained sluggish despite the Centre’s sustained push to kick-start the investment cycle through large-scale public spending. India has also struggled to harness its demographic dividend, failing to generate enough jobs for the roughly 12 million people who enter the workforce each year. Nor has it been able to move the needle on manufacturing, whose share of GDP has remained stubbornly stuck at a low 16-17 per cent for years.

Of course, the war in West Asia has been a big drag on the economy. India imports nearly half its crude oil, 60 per cent of its natural gas and 90 per cent of its liquefied petroleum gas (LPG) from the region. Two-thirds of the country’s urea imports also originate there. The closure of the Strait of Hormuz during the US-Iran conflict had already choked supplies to India; the attacks by Houthi rebels on Saudi Arabian oil installations along the Red Sea coast have now affected shipping traffic through the alternative Bab el-Mandeb Strait. On July 23, Brent crude hit the $100 a barrel mark for the first time since May. Most analysts forecast it remaining in the $80-85 range this fiscal, as much as 15 per cent higher than the previous financial year.

The Centre had hiked fuel prices multiple times during the Iran war, leading to a cumulative Rs 7.50 per litre rise in both petrol and diesel, and with crude oil prices continuing to be volatile, it will be in no hurry to reverse the hikes. Higher fuel prices have a cascading impact on the economy, hiking input costs that subsequently make goods and services more expensive. Combined with higher food inflation, this has led to the sharpest rise in retail inflation in 18 months this June. The Reserve Bank of India (RBI) has forecast inflation to remain above the 5 per cent mark in the current financial year.

The Gulf war had also been putting pressure on the rupee, which fell to nearly 97 to the dollar on May 20. The rising cost of India’s imports during the war have widened the current account deficit (the difference in the value of the country’s exports and imports) while falling net FDI and an increased outflow of foreign portfolio investments have impacted the capital account. The crisis on the balance of payments front became evident when PM Modi on May 10 exhorted citizens to curb spending on fuel, gold and foreign travel to curb the outflow of money. The RBI, meanwhile, drew heavily on its reserves to shore up the rupee, which caused the national forex stockpile to fall from an all-time high of $728.5 billion in February 2026 to around $676.2 billion by late July 2026.

According to experts, the government’s priorities in the wake of the West Asia war should be agriculture, MSMEs (micro, small and medium enterprises), the environment and alternative energy. In agriculture, the focus must be on raising productivity, promoting value-added products, reducing wastage and boosting exports, while making the sector more resilient to the vagaries of climate change. For MSMEs, which create and absorb the maximum number of jobs, skill creation, say experts, must remain the foremost priority.

3. PASSING THE DELIMITATION BILL

This is one test that Modi has set for himself—and it is a high-stakes gamble. The BJP leadership is looking for a legislative victory substantial enough to energise the cadre and steer the national conversation away from Jantar Mantar. The 10-hour debate on the examinations amendment, in which younger MPs such as Tejasvi Surya and Bansuri Swaraj took centre stage, was only a curtain-raiser. The real contest lies in two constitutional measures being shepherded by Amit Shah’s home ministry. The first is the One Nation, One Poll amendment, aimed at holding simultaneous general and state elections. Cleared by the Ram Nath Kovind committee, it was introduced in the Lok Sabha in December 2024 and now awaits scrutiny by a joint parliamentary committee. The second is a fresh push for delimitation, a politically fraught exercise that is positioned as an enabling precondition for the implementation of the promised 33 per cent reservation for women in Parliament from 2029, expanding the total number of seats in the Lok Sabha from 550 to 850. Back in April, the government had convened a special session for the purpose but had failed to muster the requisite numbers.

The government’s arithmetic has improved since. The BJP’s landslide victory in West Bengal on May 4, winning 207 of its 294 seats, heralded its first government in the eastern state. It was followed by a split in the Trinamool Congress that took about 20 Lok Sabha MPs and four Rajya Sabha members away from Mamata Banerjee, with the Lok Sabha group merging into a formation that has signalled support for the NDA and the Upper House members joining the BJP outright. Six of Uddhav Thackeray’s MPs have crossed to Eknath Shinde’s Shiv Sena. Talks are on with the Sharad Pawar faction of the Nationalist Congress Party to merge its eight MPs with Sunetra Pawar’s group. The Dravida Munnetra Kazhagam, now out of the INDIA (Indian National Democratic Inclusive Alliance) bloc, is a possibility on specific measures. M.K. Stalin, having lost the assembly election to Vijay’s Tamilaga Vettri Kazhagam, needs the cover of a national party against investigations by the new state government, and BJP managers are telling him the fresh bill will carry a 50 per cent formula inside it. The Yuvajana Sramika Rythu Congress Party, which had supported the bill in April as well, and the Jharkhand Mukti Morcha are on the same list.

It is still not enough. The NDA has 318 members in the lower house against the 360 required for a two-thirds majority. Even if every new constituent votes with the government, the tally comes to about 355. That leaves the managers five short and hunting. One technicality could help them. Article 368 requires two-thirds of those present and voting, along with a majority of the total membership of each House, which means an absence is worth almost as much as a conversion. A good deal of the negotiation now under way is not about who will vote yes but about who can be persuaded to be somewhere else that afternoon.

For Modi, this is the cleanest available way to look like himself again. One Nation, One Poll and women’s reservation are the two pillars of the prime minister’s constitutional agenda that the Opposition finds difficult to oppose openly, though they are divided on delimitation. If he succeeds in pushing through either, it will determine whether Modi 3.0 can deliver transformational change—or merely manage crises. At the same time, a second failure in four months, coming on the heels of the NEET capitulation, would be a serious blow to its credibility.

4. WINNING UTTAR PRADESH

Another test is one Modi cannot delegate, because it rests on the one skill he has consistently mastered: winning elections. Seven states go to the polls in 2027. Five of them—Uttar Pradesh, Gujarat, Uttarakhand, Goa and Manipur—are BJP-ruled; Punjab is held by the Aam Aadmi Party; the Congress has Himachal Pradesh. The biggest prize, by far, is UP, with 80 Lok Sabha seats and a 403-member assembly. But the state’s importance goes beyond numbers. A comfortable BJP victory in UP would steady the party’s cadre across the country and reinforce the message that 2024 was merely a bad patch, not a political inflection point. A close contest, however, would send the opposite signal. The party knows exactly when the ground shifted. In the 2024 general election, the BJP won just 33 of UP’s 80 LS seats, with a vote share of around 41 per cent—a sharp fall from the 62 seats it had secured in 2019 and its poorest performance in the state in the Modi era. The Samajwadi Party (SP) won 37 seats, while the INDIA bloc finished with 43. More damaging was the loss of Faizabad, the constituency that includes Ayodhya, just six months after the prime minister had inaugurated the Ram temple. That defeat demonstrated that the BJP could not rely on the temple to provide an enduring electoral advantage. The donation theft controversy this summer has complicated matters further by shifting the conversation from what was once its defining achievement to questions of mismanagement. The challenge now is to find an issue that can match the emotional resonance the Ram mandir once had in UP.

Some of what followed 2024 would have been difficult to imagine earlier. The party embraced a caste census, an idea many of its own leaders had spent years opposing. Sunil Bansal, the architect of the BJP’s formidable booth machinery in the state, was moved to a national role. Yogi Adityanath was given greater latitude in senior bureaucratic appointments. There is little doubt within the BJP that Yogi remains the state’s most effective vote-getter after Modi himself. But he also carries the burden of a decade in office—an incumbency no UP chief minister has successfully overcome before. And the past two months have tested precisely the section of the electorate that has traditionally backed him: aspirational, upper-caste, urban and young.

However, what worries BJP strategists in UP is not anti-incumbency or factionalism, it is arithmetic. In 2022, the BJP and its allies secured 43.8 per cent of the vote against 36.6 per cent for the SP alliance. But the margin alone does not explain the result. The Bahujan Samaj Party (BSP) polled 12.9 per cent and converted little of it into seats. That stranded vote, concentrated in reserved constituencies and eastern UP, provided the BJP the cushion it needed to edge past a divided Opposition in a string of closely contested seats. That cushion is now shrinking. The BSP failed to win a single Lok Sabha seat in 2024, and its vote share slipped into single digits. Several of its district-level organisers and second-rung leaders—R.K. Chaudhary, now an MP with the SP, Indrajeet Saroj and Lalji Verma—have moved closer to SP chief Akhilesh Yadav. What they bring with them is not merely votes, but the organisational machinery that mobilises them: booth committees and local leaders who know which households in which lanes turn out on polling day. Which means that to retain UP in March 2027, Modi cannot merely hold on to his base; he has to expand it—a formidable challenge that will require reclaiming the narrative, rejuvenating the BJP cadre and Sangh volunteers on the ground and curbing factionalism.

5. KEEPING THE RSS HAPPY

What should also worry Modi and the BJP is the conspicuous silence of the wider Sangh Parivar during the entire Gen Z agitation. In earlier battles, the affiliates of the Rashtriya Swayamsevak Sangh (RSS) could be counted on to build a counter-narrative, mobilise support or put their own numbers on the streets. This time, there was little sign of any such intervention. The conclusion many BJP workers have drawn is that the government was left to take the beating on its own.

The silence, though, was not absolute. On July 24, a day before Pradhan’s resignation, RSS sarsanghchalak Mohan Bhagwat, while addressing the closing session of the Vishwa Mangalya Sabha’s national meeting on contemporary motherhood at Delhi’s Ambedkar International Centre, said his generation had grown up in a culture of obedience, but today’s youth were different. They ask questions and have to be given reasons, affection and time. He made no reference to Jantar Mantar, but the message for Modi was unmistakable.

A second version has been doing the rounds since: that the Sangh was not absent so much as unconvinced. According to sources, blunt feedback reached the prime minister after July 20—that the police action had created a rupture with sections of the BJP’s core constituency. The RSS is itself in the midst of a major Gen Z outreach initiative as part of its centenary celebration. Watching a government that it helped build deploy tear gas, lathis and pellet guns against students in the national capital was hardly the message that campaign needed.

Either interpretation poses a problem for Modi, say experts. But the second one is more consequential. The Sangh may have partly reconciled with the BJP leadership, put its workers behind the party’s machine in crucial states and had a say in a few state units, but it has not bothered to hide its displeasure. For example, it has been sitting quiet for two years on the BJP request to release 14 pracharaks as general secretaries (organisation) in its state units. That post is the pivot on which a state unit turns, and the incumbent is traditionally the RSS’s man inside the party. Eight states still have the vacancy, poll-bound Uttarakhand among them. The BJP leadership understands that they also need the Sangh’s workforce and leadership to triumph in Lucknow a third time.

6. RESHUFFLING TEAM MODI

This is the only challenge that is entirely within Modi’s control, which is why the delay has begun to beg an explanation. Experts say a meaningful reshuffle of the council of ministers has been overdue for some time. The string of assembly victories after 2024—Haryana, Maharashtra, Delhi and Bihar—was expected to provide the chance to move people out, induct fresh faces and clarify who was accountable for what. It never came. As a result, there are ministers who have been occupying the same portfolios for years without any serious scrutiny of what they have delivered. Pradhan’s name had figured in reshuffle speculation earlier, and one explanation for his continuance was his proximity to Shah. It does not help that he eventually exited through resignation rather than a broader reorganisation, because it suggests that public pressure forced a change the prime minister would have preferred to make on his own terms. Party sources are expecting the biggest reshuffle of Modi 3.0 to communicate two messages at once: performance matters, and a younger generation is ready to take charge.

The backlog in the Modi cabinet reflects in the organisation as well. A national team for party president Nitin Nabin has been pending for months. The appointment of a 45-year-old national president was read inside the party as the beginning of a handover to a younger generation, and Nabin has said in private conversations that he wants a 50:50 blend of new faces and old hands. That has yet to happen. UP still lacks a full-time in-charge. Punjab has none either. Uttarakhand, one of the nine states without a general secretary (organisation), votes in six months. State leaderships, particularly of Rajasthan, Madhya Pradesh and Uttarakhand, are said to be under review as well. The BJP changed CMs in Uttarakhand thrice and won anyway. A change or two would signal that accountability does not stop in Delhi.

Realigning the bureaucracy is the harder part, as is evident in the current education crisis. Sources in both the BJP and the RSS say that this government leans too heavily on its officers, that the political leadership in several ministries has been reduced to signing off on decisions that have already been made, and that the officers concerned are not held accountable when those decisions go wrong. Over the past decade, serving and retired civil servants have begun presiding over a great deal of the institutional apparatus, be it Sanjay Malhotra at the RBI, Tuhin Kanta Pandey at SEBI, Ajay Seth at IRDAI since September, Ravneet Kaur at the Competition Commission of India and Injeti Srinivas at the NSE. The reforms intended to change this equation have moved slowly. Mission Karmayogi and the lateral entry push delivered far less than was promised.

The result was the political explosion this summer. Modi has repeatedly demonstrated an ability to turn political setbacks into opportunities. He will need that skill once again. But before anything else, he must win back the confidence of the generation that will define India’s future.

—with Kaushik Deka and M.G. Arun