The EconomistOctober 26th 2019 3T
o roars ofapproval from the pumped-up crowd packing a sta-
dium in Houston, Texas, India’s prime minister gave his an-
swer to the local greeting. “You ask, ‘Howdy, Modi?’, so I say, ‘Every-
thing is fine in India!’” The prime minister repeated the phrase in
half a dozen Indian languages, drawing more roars from different
parts of the crowd. Narendra Modi is a master at turning such
shows to his advantage. For more than 4m Indian-Americans, he
had subtly equated his own person with the Old Country. And, by
persuading President Donald Trump to appear on stage with him,
he was showing a resurgent India, respected by world leaders and
walking tall on the world stage.
The son of a Gujarati grocer and a devout Hindu nationalist, the
most powerful prime minister in a generation projects a comfort-
ing small-town conservatism. Yet his natty dress, uplifting talk of
progress and cutting wit speak of upward mobility. Mr Modi’s stilt-
ed English may be awkward, but his aura of confidence declares
the arrival of a bolder, stronger country.
As on the world stage, so at home. When the results of India’s
election were announced in May, Mr Modi’s Bharatiya Janata Party
(bjp) surprised even its own supporters with the scale of its re-
election success. The party had more money, more energy and a
sharper message than its feeble, divided opponents. But mainly
the outcome was a personal triumph for Mr Modi. Pundits now as-
sert that after decades of wobbly coalition governments, India has
entered a phase of hegemonic politics reminiscent of the 1950s and
1960s, when the Congress party held unchallenged power. The
bjp’s current majority means it could push through almost any leg-
islation Mr Modi wants. But for all his massive mandate, can he
hold India together in all its contradictions and move it forward?
Judging by his first term, and his government’s trajectory in the
early months of his second, the answer is not at all clear. A great
deal of hype accompanied Mr Modi’s arrival on the national scene
in 2014. He was praised as a can-do, pro-business pragmatist who
would wipe clean and shape up a government widely seen as venal
and rotten. Yet Mr Modi’s first five years proved in many ways a
wasted opportunity. With some notableexceptions, such as the in-
troduction of a nationwide goods and services tax (gst) and a huge
effort to stop “open defecation” by building more toilets, bold re-
forms were largely postponed in favour of policy tinkering, sops to
noisy constituencies and packing the bureaucracy with loyalists.
In his latest term, Mr Modi has seemed more intent on following
another side of his character, consolidating personal control, pun-
ishing political foes and pursuing Hindu-nationalist ideological
goals—such as placing 7.5m unhappy Muslims in Kashmir under
extended lockdown and direct rule from Delhi—than dealing with
more pressing economic issues.A reckoning
Mr Modi’s government has failed to acknowledge looming dangers
to India’s economy and is now struggling to cope with an alarm-
ingly sharp slowdown. In the first half of 2019 new banking credit
to businesses crashed by a shocking 88%, and growth fell from 8%
in 2018 to just 5% this year. For a large and diverse economy, this re-
mains a respectable figure. But demographic pressures mean that
India must sustain growth of 7.5% just to keep unemployment in
check—and needs to do even better if it hopes ever to catch up with
China. “Anything less than 6% feels like a recession in India,” says
Pranjul Bhandari, chief India economist athsbcin Mumbai. AndThe two Modis
Special report
India is stumbling because its prime minister has not pursued his reformist instincts, says Max Rodenbeck
India
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