A vote for Modi could make India more Chinese

[Rakhal DAVE]

I was recently asked by a friend to comment on the article:

http://www.ft.com/intl/cms/s/0/daa87f88-ae0e-11e3-974d-00144feab7de.html#axzz2y0qXTWZL
[If you are not registered with ft - you will find the full text
further below after my comments]

My response is below.

Regards -Rakhal

On Wed, 26 Mar 2014, Rakhal DAVE wrote:

>
> As the article itself says:
>
> "The parallels with a Chinese-style leadership should not be overdone. But
> there is at least one other way in which a Modi administration might resemble
> a Chinese-style approach. Like Deng Xiaoping, who departed from Communist
> ideology with his pragmatic entreaty to “let some people get rich first”, Mr
> Modi is more about making the economic pie bigger than slicing it up fairly."
>
> But the change which Deng Xiaoping brought was a more
> dramatic event for China than bringing Modi in India.
> India grew up as a socialist democracy - and successfully
> experimented with trickle down capitalism
> under Narasimha Rao in the mid 90s but such an experiment
> was philosophically novel for India but not as dramatic
> as the embrace of state capitalism by communist China.
>
> When the BJP came to power later they continued liberalisation
> but there was a backlash against the 'India Shining'
> campaign of the BJP as the growth was not seen as inclusive
> and the Congress won again. The Congress, having won on a platform
> opposed to 'India Shining' policies (which were their own policies
> which the BJP continued) - were then hard pressed to
> continue with liberalisation with full steam.
>
> But non inclusive growth requires time for the wealth to
> trickle down. And non inclusive growth is certainly
> better than a 'dog in the manger' style socialistic 'No growth'!
>
> I think that although historically Congress started liberalisation
> and the growth of pro business policies - the baton
> for this has now been passed on to BJP and the Congress is
> back to wealth redistribution schemes.
>
> It must be said however that neither BJP nor Modi
> has ever stated clearly that they will pursue free market
> and business friendly policies. We only get this conviction
> from how Modi has run Gujarat. So it is quite possible
> that this perceived promise of free market reform is
> just wishful thinking in supportes like me.
>
> The following recent article is however reason for optimism:
> http://timesofindia.indiatimes.com/india/BJP-praises-Narasimha-Rao-for-introducing-economic-reforms/articleshow/30472090.cms
>
> If you disregard the history - it would appear now
> - that BJP and Congress are more like
> the Republicans and the Democrats (respectively) in the US.
>
> The Congress is socially and Fiscally liberal (ie Economic conservatism)
> and the BJP is socially and Fiscally conservative (ie Ecomically liberal).
>
> The terms are confusing because
> Fiscally conservative = Economically liberal (ala Austrian school)
>
> Regards -Rakhal
>


---------------Original Article---------------------------
>>
>>
>> March 19, 2014 1:47 pm
>> A vote for Modi could make India more Chinese
>>
>> By David Pilling
>> The election frontrunner is more about making the economic pie bigger than
>> slicing it up fairly
>> [image: James Ferguson Illustration](c)James Ferguson
>>
>> China's ability to get things done has long caused many Indians to marvel.
>> Whether the planners in Beijing are overseeing the biggest rural-urban
>> migration in human history or building the world's longest high-speed rail
>> network faster than you can say "tickets please", there is a sense of
>> purpose to everything they do. India <http://www.ft.com/india>-
>> democratic,
>> federal, chaotic - has never been able to pull off anything like that
>> speed
>> of execution.
>>
>> For years, Indians have hoped that their virtues will win out in the end.
>> Their country may plod, goes the narrative, but it plods in the right
>> direction. China <http://www.ft.com/world/asia-pacific/china>'s
>> authoritarian system, which operates without the constraints of electors,
>> independent courts or a free press, can dash off in any direction. It is
>> capable of engineering 10 per cent growth year after year (though even
>> that
>> miracle has recently run out of road). Equally, it can produce the
>> disaster
>> of the cultural revolution and may yet conjure an economic catastrophe -
>> say an explosion of the property sector or an implosion of shadow banking.
>> China has only a gas pedal.
>>
>>
>> Critics of Manmohan Singh's Congress administration, which in its second
>> five-year term has watched helplessly as the growth rate has slid below 5
>> per cent, say it has prioritised redistribution over expansion. Its
>> profligacy on subsidies and social programmes, charge detractors, has
>> obliged the central bank to tighten monetary policy, thereby choking
>> growth.But what if Indians voted to become more like China? That is one
>> plausible interpretation of the seemingly decisive swing in electoral
>> support towards Narendra
>> Modi<http://www.ft.com/topics/people/Narendra_Modi>,
>> Gujarat's chief minister and a prime ministerial candidate with Chinese
>> characteristics. If nothing else, Mr Modi, whose leadership style brooks
>> little opposition, has a reputation for getting things done. His
>> supporters, including most of the country's business leaders, who have
>> flocked to Gujarat to pay homage, praise his decisiveness and hatred of
>> red
>> tape. In 2008 Ratan Tata, whose plan to build the Nano mini-car in West
>> Bengal fell foul of local politics, came to him with a proposal to switch
>> the factory to
>> Gujarat<http://www.ft.com/cms/s/0/c3edd1f0-4054-11e1-9bce-00144feab49a.html>.
>> Mr Modi nodded - and it was done. Modinomics is the triumph of
>> implementation over prevarication.
>>
>> The parallels with a Chinese-style leadership should not be overdone. But
>> there is at least one other way in which a Modi administration might
>> resemble a Chinese-style approach. Like Deng Xiaoping, who departed from
>> Communist ideology with his pragmatic entreaty to "let some people get
>> rich
>> first", Mr Modi is more about making the economic pie bigger than slicing
>> it up fairly.
>>
>>
>> Sadly for Congress, its redistributive policies are seen to have failed
>> even by those who are supposed to have benefited. A recent Pew Research
>> Center survey, which polled almost 2,500 people across the country, found
>> that rich and poor Indians, educated and non-educated, urban and rural,
>> want a switch to Mr Modi's Hindu nationalist Bharatiya Janata
>> party<http://www.ft.com/cms/s/0/7b8e6f44-ace2-11e3-af3e-00144feab7de.html>
>> by
>> a hefty majority. Fully seven in 10 are dissatisfied with the way things
>> are going, and 63 per cent favour a BJP administration over a Congress
>> one.
>> No fewer than 78 per cent have a favourable view of Mr Modi, with just 16
>> per cent disapproving.
>>
>>
>> Part of Mr Modi's attraction is that, by sheer force of will, he may be
>> able to override some of the checks and balances of Indian democracy and
>> introduce some of the clearheadness of growth-driven China
>>
>> What do people expect from him? Asked which party would do a better job
>> helping the poor, 54 per cent had faith in the BJP, with only 21 per cent
>> selecting Congress. That is surprising given that Congress has funded a
>> food-guarantee programme covering almost two-thirds of the population and
>> a
>> rural employment guarantee scheme ensuring 100 days of subsidised work per
>> household.
>>
>>
>> Similarly, asked which party would be better at controlling price rises,
>> another crucial concern for poor people, the tally was 55 per cent in
>> favour of Mr Modi's BJP against 17 per cent for Congress.
>>
>>
>> Since faster growth was unleashed with the reforms of 1991, which
>> dismantled the red-tape restrictions of the licence Raj, hundreds of
>> millions of Indians have done better. But hundreds of millions more have
>> been left behind. The crucial point, though, says Jagdish Bhagwati, a
>> prominent Indian economist at Columbia University, is that those 20 years
>> have demonstrated poverty to be a "removable condition". Indians have
>> undergone what he calls a "revolution of perceived possibilities".
>> In depth
>>
>> *India elections <http://www.ft.com/indepth/india-elections> *
>> [image: Indepth: Indian elections]
>>
>> The world's largest democracy, with nearly 800m eligible voters, is
>> heading
>> for one of its most uncertain national polls in decades
>>
>> Increasingly, according to this theory, they may be attracted not to
>> promises of Nehruvian-style equality but rather to the prospect of
>> Deng-style growth. Part of Mr Modi's attraction is that, by sheer force of
>> will, he may be able to override some of the checks and balances of Indian
>> democracy and introduce some of the clearheadness of growth-driven China.
>> Under a Modi administration, the hope is, land will be cleared,
>> permissions
>> will be granted, and roads and other infrastructure will be built. In this
>> cheerful scenario - far too optimistic, according to his many detractors -
>> he will do for India in its entirety what he has been able to achieve for
>> Gujarat.
>>
>> Of course, India will never really be like China. Mr Modi is a fiery
>> orator
>> who can rouse a crowd - a quality that, at least since Mao Zedong, has
>> hardly been required by unelected Chinese leaders. Nor can India,
>> fractious
>> and with significant power devolved to the states, ever emulate an
>> authoritarian China in which power is concentrated in the centre. And even
>> if, after the general election in May, Mr Modi is crowned prime minister
>> and goes on to wield power more single-mindedly than his predecessors,
>> there will always be one crucial difference with China. If Indians decide
>> that they do not like him, they can always kick him out.
>>
>> david....@ft.com
>>
>>
>> -------------------------