Economy, reform and nationalism in India's year of Modi

Key factors of economy, reform and nationalism have featured in the first year since Indian PM Modi swept to office promising sweeping change with analysts debating his change.

Economy, reform and nationalism in India's year of Modi

World Bulletin / News Desk

Narendra Modi swept into the Indian prime minister's office a year ago, riding a "Modi wave" of promised economic revival, reform and an end to corruption. 

With the end to his maiden year in office on Tuesday however, commentators are debating whether Modi has delivered in the high-profile, headline-packed 12 months and question whether his Hindu nationalist Bharatiya Janata Party (BJP) has been able to allay fears that minorities would suffer under their government. 

Last year's marathon six-week election was fought primarily around the economy; growth had stagnated and Modi promised a revival as well as jobs for India's youth. For many, this is the area where Modi has not delivered quickly enough. 

“The economy has been the biggest disappointment for the Modi government’s admirers,” Anil Bhatia, an independent journalist who specializes in economy, told Anadolu Agency. 

Bhatia said the optimism Modi's government had created was deflated by Modi's "political mistake" in appointing lawyer-politician Arun Jaitley as the country’s finance minister. 

“Jaitley has presented two lackluster budgets, continued his predecessor’s doctrine of retrospective taxes, pushed back the road to reducing fiscal deficit, brought rural spending to a standstill by cutting down on subsidies targeted at the poor, caused bond yields to reverse,” Bhatia said.

He claimed that Jaitley, who is also the information minister, runs the press as his “first priority” for the government. 

“Is therefore any surprise that he has had no time for the most important job entrusted to him - managing India’s economy?” Bhatia asked. “If Modi doesn’t do course correction on this, BJP will pay the same price as Congress party did for their finance minister’s follies.”

The BJP's national spokesperson M.J. Akbar disputes the claim that there has not been any change for India's economy under Modi, claiming that the prime minister has spent the year laying a strong foundation, “the most difficult part of the construction.”

“You have to be blind or biased to suggest that nothing has happened,” said Akbar. 

“A year later, inflation has halved. Growth is heading north of 7 percent. Public finance is healing, with the fiscal deficit held at 4 percent and revenue deficit at 2.8 percent,” Akbar said, adding that the government has also increased energy production beyond the set target. 

Part of the foundation Modi has been laying is his Make in India campaign; a drive to remake India as a global manufacturing hub in order boost the economy and provide jobs. 

It is a vision Modi has promoted at home and abroad, in meetings with other prime ministers and presidents and during his record 50 days spent in 18 countries; including a recent tour of China, Mongolia and South Korea. 

Bhatia said however that the Make in India initiative reminds him of 1960s and 1970s-style economy management.

“It doesn’t take a genius to realize that these mantras that worked for Japan and China worked in a different era of world trade. That window is long shut," said Bhatia. "Over the last many decades, even as India stumbled on manufacturing, it made rapid strides in services. That’s the Indian opportunity."

Modi's government has also been in a difficult situation with the agricultural sector, India's largest, which has seen exports shrink 11 percent. 

The government has also been forced into a stand-off with farmers angered by a proposed land acquisition bill that would allow companies to forcibly acquire their land for commercial projects. 

Finance minister Jaitley on Saturday acknowledged that the farming sector, domestic investment, and global economy remain a challenge for the BJP government.

“Domestic investment has to pick up, that is a challenge and even though on economic front we have succeeded in some areas...these are three areas where there are challenges,” Jaitley said at a press conference on Saturday, adding as well that the state of the global economy was beyond the control of his government. 

BJP spokesperson Akbar said the government have succeeded with financial inclusion and social security initiatives.

“The prime minister’s schem has brought some 300 million impoverished Indians into the banking sector,” Akbar said, adding that life and accident insurance schemes provided social security for a small annual premium of $5 and 18 cents respectively. 

For Akbar, the biggest reform came in the early stages of Modi's government when they announced a “zero tolerance” stance on corruption.

“Delhi is a different city for barons who worked their way through opaque corridors of power under Congress party rule, ordering the appointment of ministers and transfer of bureaucrats,” Akbar said, adding that businessmen could not "buy" decisions as he claimed they previously were able to. “Corruption, that fatal cancer coursing through the nation’s lifeblood, has been contained.”

But others say that corruption persists; Bhatia said India’s "black money" lying abroad in tax havens was nothing compared to unaccounted money in India’s real estate sector. 

“Any unbiased and non-political analysis will show that the core of India’s black money problem lies in real estate and unaccounted deals in property - within India, and not in some imaginary Swiss bank vault,” he said.

Minority rights

Perhaps the biggest fear ahead of the BJP's electoral victory in May 2014 was for the position of India's many minorities under a right-wing Hindu nationalist government. 

While the BJP's right-wing allies, such as the hardline Rashtriya Swayamsevak Sangh (RSS), have long been viewed warily, there was also concern around Modi -- a former RSS youth member -- who has long faced allegations of responsibility for inter-communal riots in his home state Gujarat in 2002, when he was the state's chief minister.

While the main BJP party has toned down its language -- which included Modi telling so-called illegal Bangladeshi migrants to "pack their bags" when he took office -- many of its regional MPs and leaders have been accused of hate speech. 

Modi himself has made few comments on the matter but Jaitley said Saturday that offending party members have been warned to restrain themselves. 

“The discourse demonizing minorities is being normalized,” said Irfan Engineer, Director of the Institute for Peace Studies and Conflict Resolution, who has documented hate speeches in the past year.

He claimed no action was taken against those inciting communal tensions, despite it being a punishable offence under India’s criminal law. 

In the capital Delhi there have been 11 churches attacked since December 2014. There was also a mass conversion of 200 Muslims to Hinduism which was allegedly coercive and targeted poor Muslims in the state of Uttar Pradesh, a particularly tense state where there had been 250 clashes in 2013. 

“The diffusion of Hindu nationalist consciousness is more rapid and its influence can be seen particularly on the lower middle class urban youth and the rural elite,” said Engineer.

In an interview with news website columnist Ashok Malik claimed it was not Modi's fault that such tensions appeared to have become more prominent and that many of the groups responsible, even if allied to the BJP, were hostile to Modi himself. 

"It could be that some people have interpreted Modi’s mandate in religious terms, which he hasn’t himself," said Ashok. "What I find mystifying is that each time something of this nature happens, people expect the prime minister to react. If the prime minister starts reacting to every fringe act, to every defaced road sign, he’d never stop."

Last Mod: 25 Mayıs 2015, 12:19
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