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The Rise of Modi
Pro-Business in Name Only?

The BJP is expected win India’s general elections this spring, largely on the strength of one big issue: improving the economy. The pro-business acumen of the BJP’s prime minister candidate Narendra Modi looks much more appealing than the slowing growth of the last few years, widespread corruption, and incompetence of Modi’s rivals in the Congress Party.

But a closer look at BJP’s economic policies, both in Gujarat and on the campaign trail, reveal contradictions and empty electioneering, according to Milan Vaishnav’s revealing essay in Foreign Affairs. Here’s an excerpt:

Here, Modi’s experience in Gujarat is instructive. On the campaign trail, Modi has suggested that he would take nationwide the free-market economic model he installed in Gujarat. The pledge has been met with skepticism for two reasons. First, Modi faces pressure from some constituencies within the BJP to soften his market-driven dogma. Despite its pro-business tag, the BJP has always been an unusual mix of free-marketers and Hindu conservatives espousing swadeshi (self-reliance). The tensions came to the fore at the party’s January 2014 national council meeting, when Rajnath Singh, president of the BJP, promised a slew of policies indistinguishable from those typical of the incumbent Congress Party, such as a “right to health” and guaranteed employment for one member of every farming family. Second, while campaigning, Modi himself has often carved out policy positions at odds with his record in Gujarat. For instance, his criticism of the Congress government’s large-scale expansion of food subsidies in 2013 was not that it should be scrapped but that it did not go far enough.

Simply put, voters cannot be sure whether they will get the reformist BJP of yesterday or the retrograde one of today. In that sense, trusting the BJP’s reform policies would take quite a leap of faith.

He goes on to evaluate every major political party’s economic record and campaign platform to show that most Indian leaders are fresh out of ideas when it comes to improving the economy (hence the title, “Empty Economics.” If you want an idea of what to expect under the all but certain Modi government, read this essay.

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  • Anthony

    Milan Vaishnav portrait appears evenhanded and outlines both economic and political difficulties facing world’s largest democracy (inclusive of all parties, factions, regions) going forward. In particular, he lays out that the slog will not be easy nor glamorous if faced by BJP, AAP, Congress Party, etc. – more than governance.

  • Bretzky1

    I don’t claim to be an expert on Indian politics, but everything I’ve read about the country’s economic problems indicates that there simply isn’t a constituency in India for economic liberalism. As such it’s not surprising that Modi would be reluctant to campaign on liberalization, even if he is a real economic liberal, which I doubt.

    • free_agent

      Yes… If the only workable path of rapid economic growth is a more classically-liberal economic policy, and if no large constituency is willing to tolerate that, nothing can be done. Actually, the place will stagnate until the rest of the world starts needing workers, at which time everybody will leave and it will become a ghost town.

      I remember, I think it was Dinesh D’Souza’s quoting his uncle (a merchant) saying, upon Indian Independence, that the country had been the best governed in the world, but was now going to go downhill. The uncle’s attitude was that the colonial government could do things correctly because it didn’t have to please the voters.

  • Jacksonian_Libertarian

    Look no Government can deliver a better economy, but throwing out the previous party will disrupt the structures of patronage and corruption that take years to build, and for a time ease the burden of Government on the economy.

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