Monday, March 03, 2014

Modinomics, the route to economic revival and growth

You need neither a degree from Harvard University nor ‘animal spirit’ to get the Indian economy going. What you need is common sense and commitment — Narendra Modi has both...
Modi is a maximalist who wants the most for India
Frankly you don’t need either a degree from Harvard or ‘animal spirit’ to revive the Indian economy. If knowledge imbibed at Harvard and unleashed animal spirit could have propped up the economy then it would not have been in such a sorry mess today nor would we have had to witness our Prime Minister and Finance Minister blaming the world for India’s plight. This reality, however, has not prevented our Harvard educated Finance Minister from rudely poking fun at the BJP’s prime ministerial candidate Narendra Modi. Among the many insults hurled by P Chidambaram is his boorish comment that Narendra Modi’s knowledge of economic affairs could be written on the back of a postage stamp. True to his style, Narendra Modi has given it back in full measure and more: While addressing economists, business executives and diplomats at the India Economic Convention 2014 organised by India Foundation in New Delhi last week, he said his knowledge was far less than what could be written on the back of a postage stamp.
The irony was not lost on those who tuned in to listen to Narendra  Modi talk about his economic agenda. That a Finance Minister who has spectacularly failed to halt, leave alone reverse, India’s rapid economic decline would have the temerity to scoff at a Chief Minister who has stayed the course of economic growth and development and heads a State whose contribution to the national economy has helped in no small measure to keep the latter afloat tells its own story of unbridled arrogance. But while being supercilious may titillate the establishment media, it does not detract from the fact that he will be leaving the robust economy which the Congress inherited in 2004 in a shambles.
Nor can P Chidambaram’s smart retort hide the fact that Manmohan Singh, touted as an ‘economist’ Prime Minister and wrongly credited for the 1991-1996 reforms that were part forced on us as part of a bailout package by the IMF and part driven by PV Narasimha Rao’s agenda to discard the baggage of Nehruvian socialism, has singularly contributed to killing the India Story. A feckless Prime Minister who chose to be in office as a stooge of the Nehru Dynasty and presided over a recklessly corrupt regime while feigning ignorance of the unrestrained loot right under his nose could not have been expected to fuel the economy with either policy or imagination. That many expected otherwise shows the Great Indian Rope Trick is not entirely a myth.
Speaking at three separate events in New Delhi this week, Narendra Modi demonstrated that the solution to the myriad woes that afflict the Indian economy can be found in good old-fashioned common sense and that thing called political determination. Both are understandably alien to those who survive on scraps from the high table of the Nehru Dynasty: Their Pavlovian response would be to peddle the voodoo economics of Sonia Gandhi’s National Advisory Council as the prescription to cure India’s creeping economic paralysis. There was a time when Manmohan Singh would, in unguarded moments of candour, call for out-of-the-box thinking — that was long before he decided to unleash his “animal spirit” only to discover even if the spirit was willing the flesh was too weak to respond to the looming crisis.
To think out of the box, to think radically, to think big and to think beyond today and tomorrow requires both common sense and commitment — call it political determination if you will. Narendra Modi is right when he says governance is not about rocket science, it is about clarity of purpose and integrity of action. Once these are in place, the rest follows by way of forward looking policy and implementable programmes that address short-term, medium-term and long-term concerns. It is not enough to talk about reviving investor confidence so that the tap of investment is turned on. To create that confidence, good governance is a sine qua non as is faith in the political leadership not to be persuaded by bogus schemes of which we have seen one too many during the wasted decade of UPA rule.
When Narendra Modi talks of investing in infrastructure, reviving the manufacturing sector, nursing the agricultural sector, boosting the service sector and infusing all of them with state-of-the-art technology, he is not really saying anything radically new. To meet the demand for 10 million jobs a year, all this needs to be done. But what makes him stand out and his voice heard in the cacophony of prescriptions is the sincerity with which he says this and the experience he draws upon. He does not pander to populism that the Congress believes fetches votes but also fetches ruination. He does not promise hollow rights but emphasises on dignity of labour and empowerment. He does not talk of giveaways but asset creation and tapping the entrepreneurial spirit and aspiration of Young India.
Many would argue that it’s not pragmatic to talk about the need for Indian companies to become globally competitive and bravely confront challenges in the run-up to elections. Even in the US, Presidential election candidates, irrespective of their political beliefs, turn to peddling protectionism and raising the bogey of foreign competition. That’s considered conventional wisdom. It requires courage to turn conventional wisdom on its head and Narendra Modi has dared to do precisely that. He has talked about the need for Indian companies, big and small, to become competitive and slug it out in the global market with competitors. He has talked about the need for changing attitudes, the need to look beyond the obvious, to embrace challenge as an opportunity, to invest in technology. He frames diplomacy of the future in terms of economic engagement and trade.
That a man whose knowledge can fit the back of a postage stamp eloquently talks about next generation technology, who calls for investment in biotechnology and environment technology, bears testimony to the stupidity of those who make bold to mock at him. Narendra Modi does not look at the small picture, the minor details, the nuts and bolts; that’s the job of those who are tasked with the responsibility of implementing policy. He thinks out of the box and he thinks big. That’s the way it should be. A Prime Minister should really be looking at the big picture, setting targets and goals which are seemingly impossible to meet. For evidence, go back to his speech at the BJP National Council on January 19 in which he talked of 100 new cities to cope with irreversible urbanisation, super-fast trains with dedicated corridors, new expressways and highways, and high technology-driven high yield farming, among a host of other big ticket ideas.
It would be easy to scoff at him and ask, but where will the money come from? The answer to that question is simple: Once investor confidence is restored and the economy’s slide is reversed, the India Story will once again capture the global imagination. Let us not forget that despite the post-Pokhran II sanctions the BJP-led NDA was successful in mobilising resources for path-breaking big ticket projects. Prime Minister Atal Bihari Vajpayee did not allow minor details to come in the way of realising big picture ideas. A lot happened. A lot more shall happen when Prime Minister Narendra Modi takes charge.


Anonymous said...

One cannot talk about future of Indian economy without talking about fiscal behavior and world economy. What Modi offers better than his rivals is potential for political will power and acceptance of capitalistic system rather than blind populism. Some challenges can be outlined: labor laws and practices in labor market due to these laws and controlling the fiscal side made up of current programs, subsidies and future promises. India will always attract investors, that not an issue. Issues will be maintaining environment for lower interest rates and lower inflation and investment in physical projects boosting employment. I think if BJP won't be able to form thumping majority then opposition and coalition compromises will make life difficult even for a strong willing leader.

Kant Shashi said...

Very interesting and appropriate at this time. It is Modi's style of working which makes him the best and different from others. Maximum utilization of limited resources is his motto. Example, idea of roofing Narmada canals with solar panels for twin purpose of generating solar power and saving evaporation of canal waters! Changes in Gujarat are seen and felt by the people of the State.


To do any good thing to a country there is no need of university degree or any certificate. If a leader have real love on their citizens and their country to grow, that is more than enough. Most countries are developed only by uneducated leaders and there are plenty of prof for that. So MY Country India's PM NAMO have true love and patriotic thoughts and all ambitions and hard work to enhance our indian economy. I salute my PM.