The coalition led by the Hindu nationalist party, the BJP, and its leader Narendra Modi, have won the just concluded Indian elections, with the largest mandate in the last 30 years.
The international reaction:
British business interests were enthusiastic:
“British business is particularly buoyed by Mr. Modi’s victory and expects his government to quickly take forward economic ties, the groundwork for which has been laid by Mr. Cameron during his visits to India.
Patricia Hewitt, Chair, United Kingdom India Business Council, in her congratulatory message said: “The election of a new Government of India — and the improvements in the business environment that will follow — should prompt those British businesses who have been hesitating about entering the Indian market to put aside their doubts and seize the India opportunity with both hands.””
“To my observation, this general election was fought on India’s domestic agenda and China was not a significant topic. This indicates the China-India relationship has become more mature and shock-resistant. Relations are national interest-centric, not party-oriented.
Indian parties don’t have much policy differences towards China. Historically speaking, China has been even more skilful in dealing with “right-leaning” political entities.”
It will be fascinating to see if Modi can replicate his success in Gujarat on the national stage. Many, though not all, economists believe the Indian economy needs another wave of liberalization that builds upon the one that Singh introduced in the nineteen-nineties, when he was minister of finance. Those measures cut the budget deficit, stripped away some of the country’s infamous licensing restrictions, and made it easier for foreigners to invest in Indian companies. Jagdish Bhagwati, the Columbia University economist who is one of Modi’s most prominent supporters, has criticized Singh for not following up on these reforms during his time as Prime Minister.
It has been widely reported that Bhagwati and his Columbia colleague Arvind Panagariya, another supporter of free-market reforms, will play some role in the new Indian government. Modi, however, also has his critics in the academy. Some studies suggest that Gujarat, despite enjoying stronger than average growth, has a questionable record relative to other Indian states in reducing poverty, improving child nutrition, and promoting education and social inclusion. Last year, Amartya Sen, perhaps India’s most famous economist, came out strongly against Modi’s candidacy, criticizing his failure to protect religious minorities, and saying, “His record in education and health care is pretty bad.”
Indians and people the world over will be watching to see how far Modi goes in the direction of liberalization. Reforming India, which has many powerful states and innumerable vested interests, is much harder than reforming an individual state like Gujarat. And while Modi has obtained a historic mandate for his economic agenda—the B.J.P. will be the first party in thirty years to have an outright majority in Parliament—there are still widespread concerns that the fruits of economic progress are not being spread widely enough, concerns that more business-friendly reforms are unlikely to alleviate. “It felt like a vacuum period,” Modi said on Friday, addressing his supporters in Ahmedabad. “Now we will fill that vacuum.”
Comment:
I don’t have a clear-cut opinion of the man yet. I’ll wait and see…. and hope that the massive PR efforts (APCO, billionaire Adani) poured into his election are justified by something more than whose bread he can butter.
India’s Muslim and Christian minorities are probably more than a bit worried, but the stock market, not surprisingly, took off…..