Omer Aziz is a writer, international affairs analyst, and recent Commonwealth and Pitt Scholar at Cambridge University, where he wrote a dissertation on Indian politics and foreign affairs. He tweets @omeraziz12.
Last summer, a fierce intellectual battle broke out in the normally tepid letters section of The Economist. Jagdish Bhagwati of Columbia University and Amartya Sen of Harvard, India’s two most reputed economists, took turns attacking each other’s commitment to economic growth in India.
“Mr. Sen,” Bhagwati (and his co-author, Arvin Panagriya, also of Columbia) wrote, “has belatedly learned to give lip service to growth, which he has long excoriated as a fetish.” In response, Mr. Sen (along with collaborator Jean Dreze) lambasted the two critics for perpetuating the “outrageous distortion” that he was anti-growth. The central disagreement between the two thinkers was over whether India should prioritize growth or redistribution.
As India finalizes the vote count in the world’s largest election, it appears as though voters have opted for Mr. Bhagwati’s growth-first approach, with exit polls showing that Narendra Modi of the BJP will win a majority mandate and become India’s next prime minister. Mr. Modi (and his well-oiled marketing machine) has trumpeted the economic progress he oversaw for a decade while premier of Gujarat and has promised to replicate such feats in New Delhi. A closer look at ‘Modinomics’ reveals that such self-aggrandizement may be more myth than fact.
By now, you have heard some version of the Modi narrative: the autocrat; the incorruptible capitalist; the Hindu fundamentalist; and the deliverer of jobs and growth. Depending on whom you believe, you may also have heard that Mr. Modi was complicit in the anti-Muslim pogroms which swept Gujarat in 2002 and left 2,000 people dead. The story getting the most traction in India, however, is Mr. Modi’s rise to power, which is premised on two governance traits: bureaucratic efficiency and economic growth.
On the question of getting things done, Mr. Modi had little time for the languid pace of bureaucracy in Gujarat. His mantra was ‘no red tape, only red carpet.’ His office had a hotline that disgruntled Gujaratis could call to complain about government services. There was power 24-hours a day in rural areas while neighbouring Sindh in Pakistan experienced daily power outages, and still does. The man was known for his ruthless ambition: He told the geostrategic analyst Robert Kaplan that Gujarat would become another South Korea, though the metrics were not even close. Nevertheless, business leaders flocked to him for the red carpet treatment. “It is stupid if you are not in Gujarat,” beamed Ratan Tata, former chairman of the multibillion-dollar Tata Group, after he moved a plant to Mr. Modi’s state.
On the economic growth question, the BJP has aggressively promoted Mr. Modi as the savior of Gujarat and the harbinger of unprecedented development to India. The picture is more complicated. According to India’s Planning Commission, Gujarat’s GDP grew at an average of 16.6 per cent a year from 2001 to 2010. On a per capita basis, however, Gujarat fell behind Goa, Maharashtra, and Tamil Nadu. If you look at human welfare indicators like female literacy and poverty alleviation, Gujarat remains in the middle of all Indian states, which reveals just how uneven Mr. Modi’s growth model was.
What Mr. Modi does not tell voters – who, in reverse of Indian tradition, pay to hear him or a hologram of him speak – is that Gujarat was already growing faster than the rest of India before Mr. Modi took power in 2001. After India began liberalizing its economy in 1991, Gujarat took off, registering the fastest growth among India’s 14 major states, partially because it was better linked to the global economy. The man Mr. Modi and the BJP should thank in their marketing ploys is current Prime Minister Manmohan Singh, who spearheaded India’s opening in 1991 while finance minister.
By a twist of irony, the reason Mr. Modi has become so popular is because voters are exhausted of the decrepit and intellectually bankrupt administration led by Singh. The Congress Party, which is led by Sonia Gandhi (who holds the real levers of power), has presided over declining growth, a falling rupee, fraught relations with China, and multiple corruption scandals. Sonia Gandhi was quick to promote her reluctant son, Rahul Gandhi, as Congress’s unofficial PM candidate, though he has proven stunningly incompetent. If there were leaders’ debates in Indian politics, Mr. Modi would trounce Mr. Gandhi.
When more than half of India’s population is under the age of 25, it defies reality for the average age of the cabinet to be 65.
The bustling middle classes and youth have thus turned away from the party that was once the vanguard of Indian independence because it is now an aged, stagnant, corrupt, family business, which is exactly what the Nehru-Gandhi dynasty is.
When the final election results are presented on Friday, Mr. Modi is all but guaranteed to become the 14th prime minister of India. The country can expect him to slash regulations, devolve some labour laws, and increase infrastructure spending. At a minimum, better economic management will almost certainly follow, given how low the bar is currently set. Whether ‘Modinomics’ includes the sectarianism and communalism that have haunted Mr. Modi’s past and are conspiring to destroy Pakistan is still left to be determined.