I had applied for a business visa from the local Indian High Commission. My application was supported by large business bodies from India and Bangladesh. While the application was being processed, the political and information office here took the intelligent opportunity to let me know that a few of my newspaper writings aggrieved them.
Maybe for this reason, they could not ultimately consider a long term visa issuance for me. This – who they let into their country – is, of course, the host country’s prerogative,
despite the fact that I studied and worked there.
However, soon the situation at their political office became quite interesting. The political counsellor asked me: “Are you pro-growth or pro-distributive justice?” This is how all of India, and possibly for the first time the Indian civil bureaucracy, is divided now. Narendra Modi has been identified as pro-growth, and Congress as pro-distributive justice, or what some call “inclusive growth.”
The gentleman went on: “Are you watching NDTV these days, or reading The Times of India?” He continued: “I don’t think our governments have done a good job with regards to narrowing the regional gaps or income inequality.”
I was at the receiving end, and therefore, had to be very cool and calm. I told him that as a humble student of economics, I was pro-growth and firmly believed that national wealth creation would ultimately ensure distributive justice through better institution-building. Our economics professors in the West termed it “trickle-down theory.”
He was loud about equitable distribution, maybe without knowing that this was exactly what Rahul Gandhi had been advocating for all these days. NDTV these days seems to be keen on bringing back the growth fever in India and facilitating the creation of more investment, and thereby more employment, and reducing poverty. The Times of India, for many years, has been focusing on communal harmony and inclusive politics.
Though Congress is trying to establish Modi as the messiah of the large corporate houses, I have heard some Indian analysts saying that the economic policies of Congress and now Modi are the same. The only difference is that Modi is quite loud while Dr Singh was quite feeble and did not have adequate energy to fight corruption or administrative glitches.
Modi was quite focused with his economic agenda: Establish 100 new cities and satellite towns, establish IIMs and IITs in every state, start the bullet train and ensure quality education in every state. He was also vocal about bringing back the money stashed in Swiss banks.
My Indian banker friend told me the other day that Modi’s vision approximated to the higher growth model of China and what Dr Manmohan Singh unsuccessfully tried to accomplish during a tenure hampered by corruption, administrative bottlenecks, and SOPs enforced by Ms Sonia Gandhi’s national advisory council. My friend said Modi was a “muscular” version of Mr Singh. He said that while Modi was almost “on your mark, get set, go,” Mr Rahul Gandhi was still stuck with the plans of secularism and inclusive growth.
Modi focused on rapid urbanisation, reviving shuttered plants, modernising railways, setting up gas grids, connecting India through fiber optics networks, building infrastructure, setting up mechanisms to monitor real-time plantation and harvest of crops, and setting up courts to try hoarders and black marketeers.
What I liked most in his economic agenda was the plan to brand India through the 5 Ts – talent, tradition, trade, tourism, and technology – and his quoting from the Gujarat model: The government should behave like a responsible promoter.
My readers may say these are all pep talks. They may see Sonia Gandhi constantly praying to God to “save India from the Gujarat model.” Who knows, India’s youth, entrepreneurs, and farmers may be thinking otherwise. They need jobs, they need more investment, and they need India’s wealth to fly beyond and create synergy in the global platform.
If he can fix his parliamentary party or group, Modi may be quite lucky with a new and focused governor at the Reserve Bank of India (RBI), with a much more stabilised rupee. India’s growth is on “rebound mode.” Inflation also has to come down.
Analysts are expecting inflation to come down from 10% plus levels to below 7%. RBI has already signaled a consumer inflation target of 8% by December. The procurement prices of food grains, the major cause of administered food inflation in India, which rise with a one-year lag, rose at an average rate of 13.5% between 2007 and 2012 and rose at less than half that rate in 2013, meaning food inflation is highly unlikely to go beyond 7% this year. Interest rates are also likely to go down further with an expectation of 6.5% to 7% annual GDP growth.
Many think whatever happens, the new order is likely to be significantly to the right of the heavily populist incumbents. Given the economic policy matter for growth, strong reformist policies need to add a further 1% to 2% to the economy. India’s GDP growth is set to be around 8% after a gap of three years. Good for Modi, better for India, best for the Indians.
