The Narendra Modi Gamble
- In Politics
- 02:06 AM, Oct 10, 2015
- Sunanda Vashisht
On January 30, 2011, Swapan Dasgupta wrote in Economic times ‘The irritation at the mismatch between words and deeds has begun to show: the latest report by the Reserve Bank of India shows that foreign direct investment in India declined by 36% between April and September 2010 compared to the same period in 2009. This decline coincides with FDI growth of 17% in non-Arab Asia. Whispers from North Block suggest that thanks to a rampaging minister of environment, the story for the next six months may be equally discouraging’. The article was titled ‘Davos 2011: The India story is losing its plot’
Reporting from World Economic Forum in Davos in 2012, Vikram Chandra wrote “This year the mood among the Indian contingent seems to be downbeat, almost depressed. A top industrialist told me last night, "We are back to being on the sidelines. Back to watching the others take the limelight. Back to the bad old days. It's feeling as if the India story is over."
I quote this because public memory is notoriously short. Today we often forget what Indian economic climate looked like in 2011-2012. This despondency only kept growing in 2013 and 2014. By the time Narendra Modi led government took charge, India story was almost a footnote and very few people believed India would bounce back. Narendra Modi understood this sentiment of dejection needed to be countered even when he was on the campaign trail. When he was sworn in summer of 2014, Prime Minister Modi made it his mission to lift the spirits of Indians and those who wanted to do business with India. Numerous high profile foreign trips, many important bilateral meetings and reaching out to expatriate Indians in ways never done before is all a part of the commitment to get everyone including Indians interested in India again.
Indian economy is at best stable, the decline seems to have been arrested but it is not on an upward swing quite as yet. As I write this reports are coming in that India has overtaken China and USA in FDI. Good news is trickling in although not as swiftly as one would hope to. Where does Narendra Modi’s high profile trip to New York, Silicon Valley and Washington DC fit in all this? It is now amply clear that Modi doctrine involves foreign policy firmly entwined with trade and commerce. Fixing economy is his primary mandate and everything else flows from that.
This second trip to USA was a perfect example of diplomacy and economics put together. Narendra Modi has changed the paradigm of diplomacy for India and this was amply in display in New York. From actively and aggressively pressing for the reform in United Nations Security Council, India is now setting the agenda. India knows reforms are not easy to come by, India also knows that getting a consensus at the moment is impossible. China won’t support Japan’s entry, USA is happy with the status quo. Obama has too much on his plate anyway right now. In any case he has won the Nobel, there are no more elections to be fought then why does he need to wade in the quagmire of United Nations. Modi knows this but it is good to get the conversation going and have India in headlines. For more than a decade India had hardly taken any worthwhile foreign policy initiative. Stuck in inertia, India was merely reacting to pushes, pricks and nudges. Modi is on a winning ticket with people responding to the agenda set by India. I saw a few conversations in American main stream media about Security Council reform and G-4 which is overall a win-win situation for India. Narendra Modi has also successfully de-hyphenated India and Pakistan in United Nations. There is lot more to world’s largest democracy and a nation aspiring to be economic hub than a pesky neighbor. From Yoga to Security Council reform it is good to see India coming across as positive force and announce the change in world order.
On his next stop in Silicon Valley, Modi made no bones of why he is there. In his Facebook town hall with Mark Zuckerberg he announced to the world if anybody is interested in investing he can give the address. Meeting CEO’s of world’s best known technological giants (see picture at the beginning), Modi asked for investments, and sharing of technical expertise. Modi knows that hitching on to the information revolution is the only path forward for India. Despite the entire Make in India push, India is unlikely to become a manufacturing giant like China anytime soon. That boat has sailed for India. While Make in India initiative will help get some manufacturing back to India, it is Digital India that will bring the jobs, initiative, innovation and impetus to the economy. The dreams of burgeoning nouveau Middle Class or Aspirational Class that Modi has been talking about will be fulfilled only if Digital India takes off.
This is why Modi’s trip to Silicon Valley is so critical. The outreach to Silicon valley CEO’S was not mere photo opportunity or Modi’s vanity getting better of him. If you look at Modi’s itinerary carefully it is clear that every meeting was well thought of and every public appearance is carefully arranged. The message unambiguously was ‘It is time to put India on Information circuit’. One in every six persons on the planet is an Indian. With a huge market like India, it only makes sense that Google, Microsoft and the rest look at India with renewed interest.
Digital India has its share of critics, some of them well meaning. We often hear -When India is ready, Investors will come. The Prime Minister needn’t appeal to anybody. It is business for investors and they will go wherever good investment is. Another popular criticism of Digital India is a distant dream in a country like India. We don’t even have basic infrastructure ready. 24/7 electricity is yet to be realized, connecting every nook and corner via roads and highways is still a dream, clean drinking water is a luxury for those living in cities too. Where is the space for Digital India? Both view points are valid and deserve to be discussed.
Why does Prime Minister have to personally appeal for investments? The answer lies in what this prime Minister inherited. Sloth, corruption and indecisiveness from the previous government. The credibility of India as a worthwhile place of investment had hit rock bottom. Relentless red tape and big ticket corruption turned away even the most committed investor. So Modi had to start his innings with fixing the image of India which only he can with his high credibility and popularity ratings. Two years from now if he is still requesting investments without anything to show then there is a problem. Right now he is doing exactly what is needed to get the economic engine restarted.
Digital India cannot happen without basic infrastructure is a valid but misplaced criticism. One is not happening at the cost of other. With trusted lieutenants like Nitin Gadkari, Piyush Goyal and Suresh Prabhu in key infrastructure ministries that battle is being waged simultaneously. The digital world is galloping fast. India cannot afford to stay and stare while others steal the march. Therefore the sense of urgency that one sees in Modi is completely justified. India will have to be connected with highways and information highways both. Narendra Modi has put himself in midst of all this. If he succeeds, India will succeed. If he fails the burden of failure is for him to bear alone and that will not be an easy burden.
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