Prime Minister Modi, From Chaiwalla to Sarkar, a New India



It wouldn’t be a major surprise if Indian National Congress (INC) member, Mani Shankar Aiyer, suddenly acquired a strong disdain for tea after the recent election results in India when Narendra Modi, the world’s most famous Chaiwalla (tea seller) turned Sarkar (government official), was elected as India’s new Prime Minister. Leading up to the historic election, Aiyer commented: “Narendra Modi will never be Prime Minister, but he can certainly serve tea.” A statement that would sound quite shocking to those not familiar with the “know your place and stay there mentality” of the subcontinent. In April, more garam was added to the chai-talk tamasha in an interview with NDTV’s Bharka Dutt when Aiyer’s INC colleague, former Finance Minister, P. Chidambaram, insisted that by electing Modi, “they [the people of India] would have made a wrong choice, and they will pay a price for the wrong choice over a period of time.” However, India’s overall performance under the INC, juxtapose with Modi’s leadership as Chief Minister of Gujarat shows that the people of India could not have made a better choice than to choose Modi as the leader of the Republic.

Agreed, Mr. Chidambaram may be correct when he remarked, “history will judge us to say that we [the INC] produced the golden period of India’s economy, 2004 to 2008.” However, the INC’s reign wasn’t only 4 years; it was 10 years under the tutelage of Prime Minister, Manmohan Singh, 2004-2014. Unfortunately for the INC, while queuing at the voting booths conversing about the government’s inability to curtail the 320 percent price increase of onions, Indians replaced old memories of the 4 year golden period with thoughts of the straws that broke the INC’s economic tiger’s back.

Economic downturn is one of the straws in question, and by 2014, on the INC’s watch, India’s economic growth slowed to a low of 4.7 percent compared to an average of 8.25 percent in previous years. Amidst high interest rates and inflation, the rupee depreciated to a record low of 44 percent, making it the worst performing Asian currency in 2013. The rate of inflation skyrocketed to 9.65 percent compared to a 3.97 percent low in 2005. The unemployment rate between 2008 and 2013 averaged at 9 percent, which is substantial when taking into account that India’s population is 1.2 billion people, with 13 million entering the work force each year. The manufacturing sector, the largest employment provider, was hit the hardest by the economic stagnancy with a 2013 growth rate of 0.2 percent compared to 14 percent in 2006. The finance ministry reports that foreign direct investment has declined from $43.8 billion in 2008 to $28 billion in 2013, and there is no doubt that a notoriously slow bureaucratic process and taxation laws helped to create an environment that does not lend itself to being business friendly.

The straw of corruption is the antithesis to the INC’s golden period. Transparency International ranked India as number 94 out of 177 countries in the 2013 corruption perception index. In what is referred to as India’s biggest corruption scandal of all time, 122 communications licenses awarded to companies in 2008 were revoked by the Supreme Court in 2012. It is alleged that, as opposed to being auctioned, the licenses were issued on a first-come first-served basis by ex- Minister Andimuthu Raja, a claim that Mr. Raja denies. The license selling allegations is said to have caused the exchequer almost $ 40 billion in losses. Other notable and alleged corruption scandals outside of the golden period include: Army bribery by industry lobbyist, where army officials were offered bribes to purchase inadequate vehicles (2012), accusations of government officials offering cash for votes (2011), allegations against army officials and politicians accused of taking apartments meant for war widows (2010), accusations of favoritism and irregularities regarding contract negotiations for the Commonwealth Games (2010), and the forced resignation of the anti-corruption chief himself, PJ Thomas, due to being accused of corruption, a claim Mr. Thomas says to be untrue (2010).

Narendra Modi’s election campaign focused on strengthening the economy and fighting corruption. It is what he said he will do for India, and it is exactly what he did for Gujarat. With emphasis on industrialization, Modi’s Gujarat gained strong economic growth over the past decade, boosting the state’s economy by 10 percent a year between 2004 and 2012, higher than the national average of 8.25 percent. Modi’s favorable stance on agriculture provides Gujarat with India’s fastest agricultural growth at 3 times the rate of the all-India level. Agriculture is crucial to India’s agrarian society and economy. Former Chairman of the Commission on Agricultural Costs and Prices, Ashok Gulati, states that by the agri-GDP growth level, Gujarat has a 9.8 percent annual growth during the 2000’s, which is a major increase from 2 percent in the 1990’s, before Modi.

Modi’s Gujarat is one of India’s most business and investor-friendly states. It is a state that strives on entrepreneurship and job creation. Concentrating on reducing red tape and administrative delays make doing business in Gujarat much easier than other Indian states, and attract national and international investments from Essar, Maruti Suzuki, Ford and Tata Motors. Commenting to CNN’s Fareed Zakaria, industrialist Ratan Tata stated that, “he [Modi] delivered in 3 days what other states could only offer their best endeavors to do.” After shifting the Tata Motors Nano car plant to Gujarat, Tata commended Modi for his swift allocation of land for operations and cited Gujarat’s reputation as a major incentive for his decision to relocate from West Bengal.

Swaminathan Aiyer, for The Economic Times, commented that, alongside good governance, Gujarat is India’s top state in economic and agricultural freedom. In a 2013 annual report by the Economic Freedom of the States of India (EFSI), Gujarat ranked number one in economic freedom for three consecutive years. Modi’s strict focus on anti-corruption and transparency help to make Gujarat the best state in corruption cases pendency, and leads in completion of police investigations. The Rajiv Gandhi foundation, of which President of the INC, Sonia Gandhi, is a member, declared Gujarat as the best administered state on two occasions; a fact that seems to have eluded the mind of the INC’s Vice President, Rahul Gandhi, when he attacked Modi’s Gujarat model while contesting the elections against him In April.

Modi’s transparent policies have been effective in promoting and developing export, infrastructure, IT, tourism and power supply. Jyotigram, a scheme implemented by Modi, provides 24-hour electricity for Gujarati residents and 18,000 rural villages. In India where power cuts are the norm, only Gujarat and Chhattisgarh provide 24-hour electricity supply. Stretches of new roads kept clean by sweeping machines, new ports, special economic zones, rainwater harvesting and irrigation are some of the infrastructural advancements noticeable in Modi’s Gujarat. Recent figures show that although Gujarat represents only 5 percent of India’s population, it produces 25 percent of India’s exports, which is a direct correlation to Modi’s strategies. Amidst India’s worst economic crisis since 1991, Gujarat’s economy has grown exponentially under Modi’s leadership.

Gujarat’s economic growth and initiatives convinced Indians that Modi’s 12 year tenure as Chief Minister makes him the leader with the ability and track record needed to strengthen one of the world’s largest economies, while minimizing the post-colonial plague of corruption. Modi’s India will see a stimulated and revived economy if he is able to form a stable government. His announcement to run for prime minister, and expected win, prompted $16 billion foreign investment into India’s debt and equities market, Indian stocks rose to record highs and the rupee strengthened. Forecasters predict that the job market will grow by 30 percent, with 15 to 20 million new jobs created.

Modi’s Chaiwalla-Sarkar success story resonates with the majority who elected him as India’s new Prime Minister. Indians have confidence in Modi. They want for India what he provided for Gujarat. They want the opportunities which they believe 10 years of INC leadership did not provide. They want change and trust Modi to foster that change. Kishore Biyani, Indian businessman and chief executive of Future Group, expressed in an interview, “Narendra Modi’s government has given us a lot of confidence that Indian companies can flourish.” In his resignation speech, Prime Minister Manmohan Singh addressed the nation by saying, “I firmly believe that the emergence of India as a major powerhouse of the evolving global economy is an idea whose time has come.” He is correct.

Opinion By Humphrey Bennett

Bloomberg Business Week
BBC News

One thought on “Prime Minister Modi, From Chaiwalla to Sarkar, a New India

  1. Let us see if Mr.Modi can maintain leadership & bring a solution along with Bangladesh Border, Tista water & Kashmere Issue.

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