Tuesday, April 29, 2014

FT columnist roots for Modi

The Economist cast its vote against Modi about a month ago, saying that the Gujarat riots of 2002 in his time could not be overlooked. Several intellectuals abroad have signed letters saying pretty much the same thing.

FT's foreign affairs editor has a different view- he thinks Modi deserves a chance. Here's why:
His rise would send an invigorating message across a country where too many people’s chances are still blighted by poverty, class or caste. That anti-dynastic message deserves to resonate well beyond India. The upper echelon of China’s government is still dominated by “princelings” – men such as President Xi Jinping who are descended from Mao Zedong’s close comrades. The US could well witness another presidential election contested between the Bush and Clinton clans. South Korea and Japan are led by the daughter and the grandson of former heads of government. Politics is also strongly dynastic in India’s neighbours Pakistan, Sri Lanka, Bangladesh and Myanmar. It would be a welcome change for India to elect a self-made man.

......The ruling Indian National Congress has reason to be proud of the liberal economic reforms that it unleashed in the 1990s. But the party has now lapsed back into the rhetoric of redistribution and big government. By contrast, Mr Modi emphasises economic policies that are focused on encouraging growth, helping business and reducing the size of government. This kind of liberal agenda is no longer so fashionable in the west. But it has been crowned with economic and political success in Gujarat.

As readers of this blog would know, I am a little sceptical about the view that Mr Modi stands for Thatcherite reforms, which means small government and leaving things to the market. He will, of course, be business-friendly. But that does mean rolling back the state. If his record in Gujarat is anything to go by, the Modi approach is to combine pro-growth policies with effective state institutions. Gujarat's leading PSUs have effected a turnaround under Modi. The erstwhile Gujarat Electricity Board is an astonishing story of recovery. Public distribution in Gujarat is reasonably effective. So are public hospitals- Gujarat has a first-rate public kidney hospital in Nadiad and a cardiology hospital in Ahmedabad. 

My own view is that Mr Modi will bring his administrative skills to bear on strengthening public enterprises and institutions. I also reckon that he will not roll back the present welfare schemes, although he may refrain from expanding them. India's polity is such that it  forces people who want to rule at the centre towards the centrist position when it comes to political ideology; likewise, the basic economic ideology will have to be slightly left-of-centre if it is gain acceptance in a still poor country riven with inequalities.

More on this in a TV discussion on CNBC in which I participated recently.  Here are link1 and link2


Anonymous said...

Interesting & I agree with your views.

I will just like to juxtapose an analogy from Corporate Governance, as Governance, be it of country or of Company, are more or less driven by same underlying canons.

The new Companies Act of India, which tries to align with corporate laws of other countries but still falls short, mentions rotation of directors, auditors, chairman, limits the period for being in office etc. The objective of this is that any person or function should not be associated for long time in the same role, as there is risk of 'lack of morality & governance' to creep in.

I would apply the same principle at macro level. It is time to change the zenith at a periodic interval, just to bring to surface that previous ruler may be perhaps concealing. Change of leadership at periodic interval (10 or 15 years, whatever) is basic & imperative principle of governance. And UPA has lived its tenure from that principle.

So without debating who is better - UPA or NDA or others - As per governance principle, there ought to be change of leadership to preclude risk of mis-governance creeping in, particularly in scenario where you have ruler ruling more than 50+ years.

Sathya said...

Not sure how Modi can use his administrative skills to change PSU, when they all of these units are under administrative control of concerned ministry and most of the time there is political interference in appointment and political patronage.