India's great expectations, one year on
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Given the outsized expectations that Narendra Modi drummed up in his impressive journey to power last year, it was inevitable that Indian commentary on his first year in office should come with a hint of disappointment that the promised "good times" are y
At times, the heights of euphoria seem to have plummeted into depths of despair. Yet, by most yardsticks, Modi’s first year in office has been good for India.
The economy is gaining traction and now outpaces China, more sectors have opened to foreign investment, fuel subsidies have been slashed, the deficit is coming under control and so is inflation. The response is coming into view: net foreign direct investment hit a record US$35 billion in fiscal year 2015, from $22 billion in the previous year.
While 7.3 per cent annual growth is still below potential, India has achieved it without drawing from the punch bowl of big interest rate cuts.
If, as is widely expected, the central bank decides today to lower rates, it would be from a position of strength, not weakness.
Politically, the nation is stable, despite the dysfunctional politics that prevents Modi from moving faster on a host of issues, ranging from labour and land reforms to the implementation of a uniform goods and services tax, key to creating a national common market.
In contrast with his predecessor’s second term, no scandal has stained his copybook.
Indians not only know there is a man in charge, they see him everywhere.
Modi is also adjusting his go-it-alone mentality to reach out to key opposition figures such as Mamata Banerjee and J. Jayalalithaa, who control big states like West Bengal and Tamil Nadu, respectively, and could lend him vital parliamentary support in the Upper House, which he does not control yet.
Abroad, Modi’s foreign policy activism is getting results; India’s stock is high as it plays in a strategic sweet spot, courted by all major powers.
Modi’s shortcomings – they are not failings yet – are two. One is a reluctance to delegate authority, causing excessive centralisation in the Prime Minister’s Office.
The other is the growing sullenness of key minority groups. Given Modi’s political roots in Hindu nationalism it was inevitable that, while faiths like Sikhism that emerged from Hindu sects would be at ease with his leadership, Muslims and Christians have found it less easy to accept him.
Despite his distaste for “pseudo-secularism”, he has a special responsibility to reach out to these groups, whose members constitute a sixth of India’s population.
Modi has said that as prime minister he has only one holy book – the Indian constitution. He surely needs no reminding that its preamble opens by placing secularism ahead even of democracy.
