First Year of Prime Minister Modi – A Review

 

This week marks the first anniversary of Mr. Narendra Modi as the Prime Minister of India. How successful has he been for India? How successful has he been for himself & his party? Has he been different from Candidate Modi and/or from Chief Minister Modi? These are some of the questions we try and answer in this article.

Candidate Modi won an enormous election mandate from the Indian people by a simple and straight message – Sab ka Saath, Sab ka Vikaas – Joint cooperation of All, Development & Progress of All. It was essentially a mission of unity of all Indians based on Indian Culture & Philosophy. This message brought together people with diverse backgrounds and views into one ask – deliver to us what you delivered for Gujarat.

What did Chief Minister Modi of Gujarat stand for? Simple – he worked tirelessly for the economic development of Gujarat; he brought industry to Gujarat and he created income for Gujarat by bringing in jobs. And he was the champion for Indian Thought, Culture & Philosophy. Chief Minister Modi was not a foreign policy leader and spent very little time in discussing what India’s foreign policy should be. He was a 100% domestic leader, a 100% core Indian focused on India.

And that has been the biggest difference between Prime Minister Modi and the Chief Minister Modi of Gujarat. Just look at the countries he visited in the past year as Prime Minister:

Embedded image permalink

 

This has been a very welcome surprise to us because it demonstrates vision and savvy far beyond what earlier Prime Ministers have shown. Chief Minister Modi developed Gujarat by persuading Indian & International industry to invest in Gujarat sometimes at the expense of other Indian states. His most celebrated coup was the winning of the Tata Nano factory for Gujarat when they were being hindered in West Bengal.

Prime Minister Modi cannot deliver for India by persuading Indian companies to move from a more welcoming state from a less welcoming state. Prime Minister Modi can only deliver for India by persuading Indian companies to invest more in India and by persuading international industry to invest in India. India has been a horrific place to invest given its generally anti-business ethos and the terrible torture Indian Bureaucracy inflicts on companies that dare desire to invest in India.

It is the job of the Prime Minister to create a positive welcoming image for India. It is the job of the Prime Minister to create a “don’t miss this train” feeling among global businesses & investors. That required Prime Minister Modi to be a salesman and that took him around the world. Geo-strategy goes hand in hand with trade & investment. Prime Minister Modi understood that he had to make India attractive as a global geo-strategy partner and that required building positive relationships with competing world powers – USA, China & Russia. 

Prime Minister Modi achieved all this but lost something critically important in the process. He lost his image as a 100% Indian leader, his image of Modi of Gujarat focused 100% on working for Indians. His biggest mistake was not speaking to the Indian people in his own honest straight manner. PM Modi never told the Indian people why his visit to USA was important for vikaas of the Indian people, not just the urban rich but for all people of India.

His biggest political misstep was his invitation to President Obama to be the Chief Guest at the Republic Day parade on January 26, 2015 . Let us be clear. It was a masterstroke diplomatically and strategically. It sent the world a clear cut message that US & India had a special relationship and that Obama-Modi had a special relationship. That changed the perceptions of India globally. PM Modi has always understood that optics lead substance and he took that understanding & skill to a global level by displaying the opulent Obama visit to the world.

But that visit tarred Narendra Modi within India because he was no longer the 100% Indian leader the people thought they elected. He was no longer the leader who was focused on their vikaas. And that opulence and focus on big industry brought up the submerged negatives of being a Gujarati. By definition, Chief Minister Modi of Gujarat never had to deal with an anti-Gujarati undercurrent. Gujarati people are traders, shopkeepers, entrepreneurs, and naturally welcoming of business. North India is just the opposite. Their experiences with traders, small businessmen, moneylenders has traditionally been negative; business to them means taking advantage of the poor and cozying up to politicians & administrative machinery. All of a sudden, Prime Minister Modi was viewed as a leader who cared for big business, for industry, and not for the vikaas of the poor. The extent of the damage is revealed in a comment made to us by a rental car driver in mid-February in Mumbai:

  • “Narendra Modi is only a prime minister in name; the real prime minister is Mukesh Ambhani (Chairman of Reliance, a massive Indian conglomerate)”

To top it all, President Obama literally destroyed the positives he had generated for US-India relations by blaming Indians for religious intolerance. A society that had been ravaged by religious invaders/occupiers for 1,000 years was being blamed for religious intolerance? A society that has seen 20% of its population forcibly or coercively converted by invading religions was being blamed for religious intolerance? Every TV network blasted the comments of President Obama and the religious conservatives, the backbone of Modi’s party BJP, went ballistic. Prime Minister Modi was no longer their beloved NaMo, the champion for Indian Thought, Philosophy and Culture.

All of a sudden, the visit of Obama that had generated so many positives globally for India became the object of anger & derision in India. That anger got concentrated on the $10,000 suit Mr. Modi wore during the Obama visit. Two weeks later, Mr. Modi’s party was wiped out in the local Delhi elections, an election in which his own party cadre refused to campaign for his hand-picked candidates.  

The man who always understood optics drive substance had forgotten the most important optics for him – the lens with which his electorate views him. Candidate Modi might have invited a couple of poor farmers & workers to the Republic Day parade and introduced them in front of the entire country to President Obama as what is most important for India and for India’s Prime Minister. President Obama would have understood and loved that gesture as it would have been perfect for his own mission to reduce inequality in America.Instead, Prime Minister Modi showed off President Obama to Indian people as his “friend” and as evidence of India’s stature in the world. In doing so, he donned the same “Shining India” arrogance of the 2004 BJP that was rejected by the Indian voters.

Then came the worst political mistake so far – relaunch of the Land-Acquisition bill under that awful name – the bill that regulates how the land owned by farmers can be bought by industry and government. This has been a big reason why China has outpaced India in industrial development. Chinese Government owns virtually all the land in China while virtually all the land in India is owned by private owners, citizens of India. It is very hard for them to give up their land to the government for industry because they have always been cheated in these transactions and because the monies they get from the sale get spent in a few years leaving them even more destitute and helpless than before. Introduction of this bill suddenly galvanized the moribund opposition and cast Modi as pro-industry & anti-farmer/anti-poor leader – the absolute worst optics for any Indian politician.

But the good news is that Prime Minister Modi is slowly regaining his touch with the Indian electorate. The Land-Acquisition bill has been postponed and the anti-BlackMoney Bill has been passed. What is needed now are some perp-walks or public actions against people who have hoarded monies overseas. If PM Modi is able to bring back sizable chunks of monies and distribute a part of it to the poor via a program for the poor, then he will fulfill a major campaign promise and solidify his position as a fighter for the common people. The next step is the implementation of a nationwide Goods & Service Tax to replace various sales taxes levied by different states.

The reality of Prime Minister Modi has been very good. His Make in India campaign is beginning to work with US/Chinese/Russian companies planning projects in India. The world has come to recognize India as the fastest growing large economy. This week, the Center  for International Development (CID) at Harvard University said in its report:

  • “after decades spent trailing the growth of its northern neighbor and economic rival, India now tops the projections of annual growth rates to 2023 … Our Economic Complexity predictions find India’s disputed upper hand in growth will expand into a widening gap in the medium-term, with growth projections to 2023 predicted to be at 7.9 percent annually, well ahead of the 4.6 percent projected for China,”

But what about financial reforms? The reality is that India is a topic of discussion in most major Boardrooms in America. Read the quote attributed on Twitter to an expert investor & CEO:

  • India is getting hot & bubbly. India will be hot whether or not @narendramodi succeeds in reforms.” ~Jeff Leonard, CEO GEF #GPEC2015

This exemplifies Nobel Laureate Robert Shiller’s role of “Tale Risk” in economic success of countries:

  • Fluctuations in the world’s economies are largely due to the stories we hear and tell about them. … Nationalism, after all, is intrinsically bound up with individual identity. It creates a story for each member of the nation, a story about what he or she can do as part of a successful country”

One of Modi’s mentors reportedly taught him “you can’t do anything unless you are in power“.  Having won power, Prime Minister Modi has created a wonderful tale of India going forward for the world. Now he has recreate the story of Narendra Modi as a champion of all Indians, especially of India’s poor. It is their vikaas that will keep Prime Minister Modi in power for the next 15 years. And if he does govern for the next 15 years, India will a story of real vikaas of all 1.25 billion Indians. 

 

Send your feedback to editor@macroviewpoints.com Or @MacroViewpoints on Twitter

Leave a Comment

Your email address will not be published. Required fields are marked *


*