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Indian voters bet on growth and good governance by electing Narendra Modi.
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Friday marked the close of the world’s largest democratic election. Seizing its highest ever vote share, at 32 percent, the opposition Bharatiya Janata Party finished with a sweeping victory, catapulting its candidate Narendra Modi to become India’s 14th prime minister. It’s the first time since 1984 that a single party has won a parliamentary majority on its own, and the first time since 1989 that the winning party won’t need any coalition partners. With the highest ever voter turnout of 66 percent, this is India’s most momentous election yet, spelling an end to the decade-old reign of the dynastic Indian National Congress party, which recorded its lowest ever vote share, at 20 percent.
Yet most impressive takeaway of this election is the reason for the shift in voter choice. Transcending historical nostalgia for the Congress party – leader of India’s struggle for independence – voters punished a decade of dismal economic growth, corruption and poor governance under its tenure.
By choosing to reward the decisive, reform-oriented, business-friendly Modi (then chief minister of Gujarat state), India has ushered in a new era. Modi’s center-right campaign rhetoric based around growth, jobs and good governance enjoys a brighter chance of translating into reality for several reasons: His administrative experience and economic achievements in Gujarat already make for credible signals. A clear mandate in parliament, absent coalition politics, also means efficient decision-making. In turn, Modi’s ambition of developing India and sparking an economic turnaround is not only good for the country itself but would naturally restore India’s attractiveness to her allies, including the U.S.
While India’s economic growth halved from its high of 10 percent over the last decade, Modi’s Gujarat state went the other way. Reduction in red tape, uninterrupted power supply and good infrastructure made Gujarat the darling of both domestic and foreign investors. Some have compared Modi to world leaders like former U.S. President Ronald Reagan. “Modinomics,” associated with the Gujarat model of growth, could pass off as a lighter version of “Reaganomics.” And just like Reagan, Modi doesn’t enjoy absolute approval from India’s cultural elite or former colonial masters.
Similarly, Modi has also been compared to Britain’s Margaret Thatcher. His belief in a small government, minimum government interference in business, and emphasis on development as opposed to handouts attracted a big constituency of Indian voters dissatisfied with Congress party rule. A majority in parliament will also ease legislative changes and passing politically difficult economic reforms, reviving the hope of unleashing a second generation of economic reforms – long overdue since the first round in 1991 that unshackled the economy from socialist restrictions.
But Modi doesn’t have a clean slate. His alleged inaction in controlling the 2002 Hindu-Muslim riots in Gujarat resulted in 1,000 deaths, three-fourths of them Muslim. But in December 2013, India’s Supreme Court cleared him of all charges. The U.S. denied him entry in 2005 over these riots, but eventually ended the isolation in February 2014 when the U.S. ambassador to India met with him. Last week, President Obama himself invited Modi to visit the U.S., signaling a fresh start.
This rapprochement was unavoidable. Modi’s decisiveness could possibly strengthen the floundering U.S.-India relationship, especially because the U.S. and India are natural allies in many ways. As the fifth largest trading partner in Asia, India’s vibrant democracy (this election is a case in point) and economic potential serves as a natural counterweight to Chinese authoritarianism in the region. Modi is already chummy with America’s closest allies in Asia – Japan and Israel – highlighting the possible prospect of changing the status quo on India’s nonaligned foreign policy. Japanese Prime Minister Shinzo Abe and Modi also share a strong friendship given their common economic and strategic goals, including tackling Chinese aggression at their borders. It is also speculated that the mutual fight against extremism could make Modi India’s first prime minister to officially visit Israel.
The U.S. should cash on the change coming to India. The White House has already reached out to Modi, so a quick reconciliation to forge an objective partnership is best for both. Modi’s reformist messaging and majority mandate in parliament is an opportune chance to direct U.S.-India relations back on track: U.S. businesses are wary of India’s vacillation on investment rules and retroactive policies; the 2008 civil nuclear deal and negotiation of a bilateral investment treaty remain in the backburner. India needs to fix its economic problems, including reforming its archaic land and labor laws, and tame the fiscal deficit.
Can Prime Minister Modi let the economics of growth trump the politics of redistribution, and restore India’s global standing? India, at least, is betting on that for now.
Hemal Shah is a researcher for India and South Asia studies at the American Enterprise Institute in Washington, DC. Follow her on Twitter @hemalshah_7.
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