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Narendra Modi India Elections

Modi and the Future of India

An Impatient Nation, A Decisive Mandate

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I am pleased to share a very thoughtful view of the recent historic elections in India by my colleague Rakesh Thukral, COO of Edelman India. An extraordinary moment of change for the world’s largest democracy.

– Matthew Harrington

The elections in India this year saw many firsts. They witnessed the highest ever turnout of voters at 66.4 percent, which in India amounts to over 553 million votes cast. With “development for all” as a unifying theme, the recent win has broken the political narrative sewn over the years that Indian elections were largely a slew of local elections and the only way to form a government by stitching regional political alliances. The belief that a single party could no longer win the election at the centre was shattered.

The verdict in these elections has been absolutely decisive. For the first time in thirty years, a single political party, Bharatiya Janata Party (BJP) has mustered, on its own, a full majority in the Lok Sabha, the Lower House of Parliament. The BJP, with its partners in the National Democratic Alliance (NDA), formed the government on May 26th, 2014. Leading the BJP is its charismatic and controversial leader Narendra Modi.

Progress over doles

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India is impatient. It is a nation with a large population of youth who aspire to prosperity and are receptive to global communication channels in both urban and rural areas. The country’s economic growth over the past two decades means Indians have tasted the fruits of development, and much like the proverbial tiger that has tasted blood, the youth cannot settle for slow progress.

It was this impatience that the Congress-led United Progressive Alliance (UPA) government failed to sense. The collective clamour among the nation’s youth for progress did not resonate with the policymakers of the UPA. Instead, they focused on giving doles. To compound this, a multitude of scams tarnished the image of the government, heaped disrepute on the political class and brought decision making to a virtual halt.

The two most striking features of the last government in the public perception was a lack of clarity on policy and an absence, almost a fear, of implementation. As the problems and issues piled up, the government chose to leave things open, not willing to commit to a decision, preferring to delay, or worse, leave it to the judiciary to decide. Policy decisions were not taken or were delayed, and judicial oversight into policy making dampened business confidence. Coupled with the general slowdown in the world economy, this lack of business confidence brought India’s growth rate down to 4.5 percent, a far cry from the 8 percent of a few years earlier.

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A vote for action

BJP’s Prime Ministerial candidate, Narendra Modi, offered a new narrative to the voter, presenting his credentials as a successful Chief Minister who had helped develop Gujarat into a stronger state.

In many ways, this was a vote for clarity of thought and more importantly, for the implementation of programmes. Modi has come to power promising action, offering not just a vision for the country, but the belief that this vision will translate to reality without delay. Economic growth and opportunities for all was the mantra of the BJP campaign. It was a message that had the crowds cheering at political rallies.

Hitting the ground running

With a clear majority in Parliament, the new government is likely to make strong policy decisions. The Modi government is likely to emphasise boosting the economy through reforms and ease the process of doing business. Manufacturing has been projected as a priority sector for boosting growth. Agriculture is expected to be given a push by improving institutional arrangements that govern agro-marketing, pricing and distribution. The government is expected to create a unified market and bring about efficiency gains to tackle food inflation.

The new government is also expected to address some of the major concerns of industry. We can expect tax reforms that will simplify processes and create an environment conducive to investments, thus reviving moribund investor confidence. The government is also expected to relook at land acquisition norms and strike a balance between industry needs and the popular sentiment amongst the country’s land-owning community, particularly small farmers and tribals (a heterogeneous set of ethnic groups claimed to be the aboriginal population of India). Of prime concern are a number of projects delayed because of the lack of environmental clearances. It is expected that stalled projects will be put on a fast track mode with time-bound implementation.

The BJP has, time and again, said that it looks at infrastructure as a way of enabling businesses to grow. The creation of high-speed train networks and new freight corridors are likely to be a priority for the new government. The government is also expected to look at upgrading existing and developing new ports and airports.

Recalibrating foreign partnerships

In foreign relations, the new government is likely to adopt a concentric circles approach – the priority nations would be those that are situated in geographic proximity, with the inner circle encompassing the neighbors, the second circle comprising the ASEAN countries and the third the wider world including the U.S., Japan and the EU.

The clear mandate given to the Modi-led BJP also brings the possibility of a reset in trade policies. The new government would like to project itself as a tough negotiator that does not hold back from presenting its view when it comes to the country’s interests. It is likely to base its negotiating positions on clear reciprocity.

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The Modi government may seek to forge stronger relationships with long-time partners like Singapore, Malaysia and Indonesia. Japan is likely to be one of India’s major partners as has been the case in the past couple of years. Modi also met Japanese Prime Minister Shinzo Abe in 2007 and 2012, and is likely to take this relationship forward. In addition, Modi has expressed his admiration for Israel, especially in the area of innovation in agriculture.

Engaging the new government

This will be a testing time for politicians, as this resounding victory has built high expectations. The Prime Minister is likely to bring in people close to him and his working style.

For those seeking to engage on policy and issues, the future is as complex as it has ever been, yet the opportunities have never been greater. Organisations face new audiences to engage with, as public scrutiny into government actions, already on the rise, will only increase further.

The next few weeks

The next few weeks will see the new government begin to translate its thoughts to action. The presentation of the union budget in July will be an indicator of government policy in priority areas. The expectations from the new government are steep. The landslide election victory is just the start of the story.

Rakesh Thukral is COO of Edelman India.

Image by Narendra Modi.
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