In two weeks the government of Narendra Modi will celebrate its second anniversary. So in recent days articles written by his admirers have appeared in national newspapers praising him for changing the direction of the economy and the mood of the country. As someone who supports Modi only because I believe he is capable of bringing the ‘parivartan’ India so urgently needs, I consider it my duty to be absolutely truthful. Let me begin by admitting that I am saddened that there has been tinkering in many areas and too little real change. Especially not where it matters most, which is in reviving the moribund economy he inherited. What worries me is that the Prime Minister seems unaware of the gloom this is beginning to cause.
As a humble hack and not an economist, I can only report what I hear when I put my ear to the ground, and what I hear are rumblings of disappointment. Modi’s most ardent supporters in 2014 admit today that they fear that he is taking the same road that Congress governments have always taken. He no longer talks about making India prosperous, they say sadly, he talks only about the poor and poverty. India’s poverty is sickening and shameful. But it continues to be glorified by socialist political parties perhaps because their solutions have failed.
You cannot remove poverty without creating wealth, and officials have shown, not just in India but everywhere, that they are incapable of doing this, but socialism ordains that the State should control the major levers of the economy. During the 2014 election campaign, when Rahul Gandhi and Arvind Kejriwal repeated in every speech that Modi was a puppet of ‘Ambani-Adani’, the charge had no resonance because ordinary voters knew that something was very wrong with the way things were. They showed their readiness for taking a new economic path.
Why has the Prime Minister forgotten this? Was it the ‘suit-boot’ charge that frightened him or the lost elections in Delhi and Bihar? Whatever the reason, the result is that even if India is the fastest growing economy in the world today, it certainly does not feel that way. I remember being in China in the late Nineties when its economy was growing at 7.5 per cent, and the energy was tangible. I had tagged along with a CII delegation of Indian businessmen and we were astounded to learn that 35 per cent of the world’s tower cranes were in Shanghai. You could not look out of your hotel window without seeing a forest of giant yellow cranes. This is a sight unseen in any Indian city despite the Prime Minister’s resolve to build ‘smart cities’.
When the licence raj was abolished by Prime Minister Narasimha Rao, it caused a surge of economic power, so intense that it dragged millions of Indians out of poverty. So many new jobs got created that the lure of government jobs began to fade. Violent agitations in recent months by powerful rural communities in Gujarat and Haryana for reserved government jobs indicate that times are not so good today.
So what has gone wrong? Crucial mistakes continue that make India seem like an unsafe bet. Not only does the retroactive tax remain inexplicably in place, but it has been used to harass big international companies like Vodafone and Cairn. Indian investors, whether big businessmen or small shopkeepers, have not noticed either that it has become easier to do business because of very mixed signals. Gala events have been held to urge investors to ‘make in India’ and to encourage India to ‘start up’ and ‘stand up’, but at the same time dire warnings are routinely issued about how hoarders and tax evaders will be jailed. These threats are reminiscent of older times.
Personally I was delighted when the Prime Minister used his first address from the Red Fort to talk about sanitation and ‘Swachh Bharat’, but what has followed is mostly tokenism. Instead of a campaign to teach rural Indians about the diseases caused by open defecation, we have had a nationwide campaign to build toilets. Most do not work and most do not get cleaned. For ‘Swachh Bharat’ to succeed, we need modern systems of waste management in cities and villages. Getting celebrities to wander about with brooms held delicately in their manicured hands is a nice photo opportunity but that is all it is.
In my view, the Prime Minister has done a great job of improving India’s image in the world and his foreign policy initiatives have been good. Since he became Prime Minister, Indians are more proud and confident about being Indian than they were when we were governed by a prime minister who was not popularly elected but appointed. Terrific. But at least in BJP-ruled states we need now to see more evidence of real change.