Is India’s Modi a Reformer or a Performer?

Indian Prime Minister Narendra Modi and leader of the Bharatiya Janata Party (BJP) gestures during a roadshow.

Starting on April 11, an estimated 900 million Indians will be eligible to cast their ballots in a national election spanning five weeks. The battle is widely seen as a referendum on Narendra Modi, the most powerful prime minister in a generation, and his Hindu nationalist Bharatiya Janata Party (BJP). Though known as “superman” to his core supporters, many of whom thought he could transform India into an economic superpower, Modi was already backing away from reform when he scored an unexpectedly crushing 2017 victory in Uttar Pradesh, the most populous Indian state.

In India, good politics often have nothing do with sound economics, notes the global investor and author Ruchir Sharma. In the following excerpt from his new book Democracy on the Road: A 25-year Journey Through India, Sharma chronicles the 2017 Uttar Pradesh campaign and the questions it raised about Modi’s political and economic legacy—questions that follow him into the national contest today.

In 2017, Modi turned the state election in Uttar Pradesh into a referendum on his role as national supremo, asking people to vote for his party and let him choose the state chief minister. Not since the late 1970s—when supporters of Indira Gandhi would say, “India is Indira, Indira is India”—had India identified so closely with one leader. Modi made his grand entrances alone and cast a shadow so complete that some voters in this politically obsessed state could not name any other BJP leader.

Modi was no longer the man who just three years earlier had promised a clear break with India’s socialist traditions, campaigning on a promise of “minimum government, maximum governance”—a streamlined administration that would not interfere in the private sector. He had talked about attracting multinationals with tax breaks, privatizing state companies, and making it easier for businesses to acquire land. He had ridiculed the welfare populism practiced by his predecessor, Manmohan Singh, saying that the Indian National Congress’s big spending was both a source of India’s double-digit inflation and an insult to the poor. Like many observers from Mumbai to New York, I thought Modi had a chance to be a transformational leader who could reshape popular thinking about the value of big government.

By 2017, Modi had belied those hopes. One top American diplomat who met him around this time described Modi as “a performer, not a reformer”—and by performer he did not mean showman. He meant micromanager, focused on executing fixes to one problem at a time rather than reducing the overbearing role of the government in the economy. Instead of further decentralizing the national bureaucracy and freeing the states to run themselves, Modi was by all accounts exerting total control over his ministers and running the most centralized administration India had seen since at least the days of Indira Gandhi, demanding that all decisions be cleared by him and the expanding staff of the prime minister’s office. His control over information remained firm, and he had yet to hold a single press conference as prime minister.

Modi began to emphasize more and more his own backward caste roots, presenting himself as a born ally of the poor. Modi spoke less of attracting big business and more of providing loan waivers to farmers, giving out free cylinders of gas, and cleansing the system of corruption and the streets of filth.

He had also begun to show a growing willingness to use the levers of state power to control the economy. The most dramatic example came on the evening of November 8, 2016, when he announced that, at the stroke of midnight, India would immediately withdraw all large-denomination rupee notes-86 percent of the currency in circulation. Advertised as a way to force wealthy tax dodgers to turn in their black money and catch them unawares, this demonetization scheme also threw the lives of poor savers into chaos.

When Modi first came to power, he seemed different from other Indian politicians: less beholden to the internecine caste struggles of his home state, better positioned to sell transformative reform to the nation as a whole, and more capable of reforming India’s dysfunctional government. But this overnight decree banning big bills showed the side of Modi more interested in wielding than reducing state power. I was reminded that as chief minister in Gujarat he had not in fact privatized any major state-owned company. Instead, he installed handpicked CEOs, closely monitoring their performance and relying on his own intimidatingly clean reputation to make state companies run more honestly and efficiently.

Early on, Modi had also worked to raise India’s global profile, travelled often to foreign capitals, and sought peace with archrival Pakistan.

- Foreign Policy



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