A few bits of news about India have crossed my path this week, enough to do a little mini-roundup. India is a vast topic, and a vastly important one for the 21st Century, but the news we get about it light on insight and heavy on disasters and politics.
So naturally this post is about disaster and politics.
We didn’t see it coming. The tsunami of support that propelled Prime Minister Narendra Modi and his Hindu nationalist Bharatiya Janata Party (BJP) into a second five-year term was a surprise to many of us reporting on the mammoth Indian general election.
Getting an accurate reading on how 900 million people will vote is extremely difficult and almost impossible to gauge from big cities like Delhi or Mumbai. Far in advance of the April-May voting, Reuters made a series of sorties into the farms and small towns where most of India’s people live to get a sense of what was being talked about, what was at stake.
Snip.
Despite the rural anger, at no time did we get a feeling that Modi was going to lose the general election. The assessment by Reuters’ correspondents was that he was going to win with reduced support from voters and might need partners to stay in power.
But instead, the BJP increased its seats tally to 303 against 282 in the 2014 election. And including its partners, Modi’s National Democratic Alliance has more than 350 MPs in the lower house, close to the two-thirds majority it would require to make transformative changes to the Indian constitution.
Snip.
But after a suicide bomber killed 40 Indian paramilitary policemen in Kashmir in February, and a Pakistan-based Islamist militant group claimed responsibility, the election focus immediately swung to national security from economic issues.
We decided to check back in the rural core of the country – and found that the attack and a strong response from Modi – including sending warplanes into Pakistan – had changed some minds and Modi was benefiting.
First, he’s ensured that the government has more revenue to spend. Thanks to the Goods and Services Tax enacted in 2017, Modi has streamlined an enormously complex system of state and federal tax collection, broadening the tax base and sharply reducing the amount of money lost to fraud. That’s a historic accomplishment in a country with so many development needs.
Modi has directed unprecedented amounts of money toward the country’s seemingly endless need for new infrastructure. Construction of roads, highways, public transport and airports have sharply increased the country’s long-term economic potential. Although the process remains unfinished, the government has also brought electricity to remote villages that have never had it, a boon for economic potential, public safety and basic quality of life.
The BJP-led government has also expanded a biometric identification system, begun under the previous Congress Party–led government, that has already taken iris scans and fingerprints from well over a billion people to help citizens prove who they are so they can receive services. It has provided bank accounts for 300 million people who have never had them, creating new opportunities for these people to access credit and state subsidies. It also brings them into the formal economy to potentially make the government more responsive to their needs. The government says these measures have cut sharply into waste and fraud within India’s welfare system, allowing the state to provide more and better services at a much lower cost.
Health care reform could help half a billion poor people afford treatment for cancer and heart disease. A program known as Ujjwala Yojana has helped women in the countryside gain access to cooking gas for the first time. The Swachh Bharat program has built tens of millions of toilets for hundreds of millions of people. Modi’s commitment to renewable energy is part of his plan to make India a leader on climate change. None of these projects are complete, but all of them will help the vast majority of India’s people lead safer, healthier, more productive and more prosperous lives.
Some of that is good. Some of the infrastructure spending is probably necessary, on the order of the rural electrification and infrastructure projects the U.S. undertook in the 1930s. I would not want to live in a country that makes biometric ID mandatory for free citizens (also, it’s hardly immune to errors, fraud or hacking). And the “climate change” rathole just increases living costs for ordinary people to no demonstrable benefit.
When I was an idealistic 20-something in the late 1990s, my hope was that India would one day elect a free-market reformer like Ronald Reagan, who would begin to shrink the dysfunctional bureaucracy and free the economy to grow faster. Looking back, I see how clueless I was.
In Delhi every politician is wedded to big government, and there is no constituency for free-market reform. I kept hoping for Reagan, and India kept electing Bernie Sanders.
Prime Minister Narendra Modi is no exception. Five years ago he led the Hindu nationalist Bharatiya Janata Party, known as B.J.P., to power on a Reaganesque promise of “minimum government,” and now he seeks a second term in the general election that ends on Thursday. But in office, Modi has wielded the tools of state control at least as aggressively as his predecessors. In this campaign, he went toe to toe with rivals, vying to see who could offer the most generous welfare programs, and it appears to have worked.
Snip.
Hopes for a big-bang Indian reformer revived years later with the rise of Mr. Modi, who in 2002 had been elected as chief minister in the western state of Gujarat. By courting multinational companies, building roads and streamlining the state bureaucracy, Mr. Modi oversaw a stunning boom. The state economy grew at a pace close to 12 percent annually in his first term. In 2014, Mr. Modi’s record in Gujarat helped lift him into the prime minister’s office.
Like many India watchers, I heard in Mr. Modi’s call for “minimum government, maximum governance” the voice of a red-tape and regulation-busting reformer in the Reagan mold. In retrospect this reading ignored how Mr. Modi had delivered “maximum governance” in Gujarat: by force of personality, cutting foreign investment deals himself and intimidating bureaucrats into building roads on time without demanding bribes.
This was economic development by executive order, not economic reform by systematically expanding freedom. Mr. Modi has tried to govern India the same way, but the top-down commands that rallied tens of millions of his fellow Gujaratis haven’t worked nearly as well on the sprawling Indian population of 1.4 billion. He centralized power in the prime minister’s office, and many private business people now say he treats them much as his socialist predecessors did, often suspicious of their motives and contribution to society.
One November evening in 2016, he ordered the withdrawal of large rupee bills — 86 percent of the currency in circulation — at midnight. The aim was to flush cash out from under the mattresses of rich tax dodgers. One of his cabinet ministers said Mr. Modi was delivering on a “Marxist agenda” to reduce inequality. Today, however, the aftershocks are still rippling through the economy, and have been especially painful for the poor.
In some ways Mr. Modi has proved more statist than the Gandhis. Before he took power he criticized Congress welfare programs as insulting to the poor, who “do not want things for free” and really want “to work and earn a living.” As prime minister, Mr. Modi doubled down on the same programs, expanding the landmark 2006 act that guaranteed 100 days of pay to all rural workers, whether they worked or not.
On the economic front, then, every Indian party is on the left, by Western standards. The Congress traces its economic ideology to socialist thinkers, but the B.J.P.’s thinking is grounded in Swadeshi, a left-wing economic nationalism.
The consensus from all this seems to be that Modi has indeed run a cleaner government than his Congress Party predecessors, has some real economic reforms under his belt, but isn’t what anyone in America would consider a real free market reformer.
