Modi needs to give India its Thatcher moment
| May 18, 2014 - 00:00
The country’s new leader must now initiate institutional reforms, says Gurcharan Das
India has a new leader. Narendra Modi, the stocky, 63-year-old chief minister of Gujarat and leader of the rightwing nationalist Bharatiya Janata party has won a historic landslide in the world’s biggest general election. Now he has a mandate to change the way that India is run. The self-made son of a station chai-wallah has decimated the left of centre, secular Congress party led by Rahul Gandhi, a “princeling” of the Nehru-Gandhi dynasty that has ruled India for most of the past 65 years.
I was among the middle of the road, liberal Indians who voted for Mr Modi. Hindu nationalism does not appeal to me, and I have never voted for the BJP. I chose Mr Modi because he is India’s best chance to restore economic growth and reward us with a “demographic dividend”. But I did agonise for months about the danger in choosing a sectarian leader who might undermine secularism. In the end, I felt that lifting millions out of poverty in a country as poor as India was worth the risk.
India’s intellectuals have been bleating about how their country has turned to the right as a result of this election. Yes, it has turned economically to the right of centre but they are wrong to believe that it has turned Hindu nationalist. Mr Modi has won because millions like me voted for jobs and growth, which he has promised to deliver by investing in infrastructure and skills training; cutting red tape to encourage private investment; eliminating unproductive subsidies; and tackling corruption.
Mr Modi has not been elected primarily by Hindu nationalists but by young people who are tired of the Congress party’s corrupt and muddled policies – in its zeal to build an equitable society, it focused on welfare programs and neglected economic progress. India’s growth rate has come down from 9 per cent two years ago to 4.5 per cent today.
India’s opportunity comes from being uniquely young – a large majority of the population is of working age. This promises a surge in economic growth, as gains from those of productive age outweigh the burden of supporting the old and the very young. Such a demographic dividend could add 2 percentage points to per capita growth. The country cannot afford to let this potential slip away. Each year, 9m people enter India’s job market and a 1 percentage point rise in gross domestic product adds about 1.5m direct jobs. Thus, restoring growth to 8 per cent from 4.5 per cent today would do it. Failure to do so risks confronting India with a demographic disaster, as the great hope of youth turns into despair.
My friends were aghast when I told them I had voted for Mr Modi. How could I have abandoned sacred secularism for profane growth? No one wants to give up secularism, I explain, but if growth continues to stall, it is secularism that will be endangered. History shows that rightwing extremism thrives during times of unemployment and disaffection. The other risk in voting for Mr Modi is that he is authoritarian. I take comfort in India’s pugnacious press, fearless judiciary and a hugely diverse, disobedient people – all of which make dictatorship a tall order. Hence, I concluded that there was a greater risk in eschewing Mr Modi than in voting for him.
Looking ahead, Mr Modi’s first priority should be reassuring Muslims that he is the leader of all Indians and that his government is duty-bound to protect minorities. He must act swiftly against sectarian violence. He must also make use of his strengths. He has proved himself a consummate implementer – a rare skill among India’s politicians that could be the key to ungumming the central bureaucracy, paralysed and demotivated after a decade of Congress rule.
Hundreds of public and private sector projects are stuck. Given clarity of purpose, Indian bureaucracy is capable of high performance, and we saw this during Prime Minister Narasimha Rao’s first two years from 1991 to 1993.
Is this India’s Margaret Thatcher moment? This is a discontented and politically troubled nation, similar in some ways to Britain in the late 1970s with high inflation, declining growth, high fiscal deficits and a government in denial. Britain yearned for a strong leader then, and in Mrs Thatcher it got one. In Mr Modi Indians, too, have chosen a strong leader. His Thatcherite rhetoric of “less government and more governance” resonates with the aspiring young middle class, as does his language of “outcomes”, “accountability” and “unbureaucratic service”.
But Mrs Thatcher did not merely restore the British economy to health through right-of-centre policies. She also reformed the institutions of governance, bringing more accountability to the state. This is what India needs as well – to reform its bureaucracy, police and judiciary. Mr Modi would thus have to go beyond the economy and show himself an ambitious reformist, if this were indeed to be India’s Margaret Thatcher moment.