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Jim Armitage: 'Modinomics' in India has helped growth, but not for all


Jim Armitage
Monday 19 May 2014 09:05 BST

Global Outlook As the "Modi Wave" sweeps all before it, some of the truth about the soon-to-be crowned Indian prime minister, Narendra Modi, also seems to have been washed away. Particularly when it comes to his much-vaunted economic successes.

It's undeniable that the three times re-elected chief minister of Gujarat state has presided over a period of strong growth for his region. His pro-business, red-tape-cutting policies have helped the private sector boom and upgraded infrastructure like electricity and roads. Gujarat's economy, depending which measure you prefer, grew by a compounded average of 13.4 per cent during his tenure, compared with 7.8 per cent nationally. Industries like automotive, solar power and mining have expanded hugely.

But before we get too carried away with all this "Modinomics", let's not forget what came before: Gujarat's economy was already one of the fastest-growing in India in the decade before he took office.

Furthermore, a weak period just prior to his arrival in 2001 meant that the rebound, when it came, looked flatteringly strong in comparison. Meanwhile, recent years have seen other progressive states expand faster than Gujarat, taking some of the polish off the Modi miracle.

So, would his state's growth have happened without him? Possibly. Would the likes of local billionaires Gautam Adani have got so rich without his policies? Hmm. Would local farmers have been disenfranchised by forced land sales to the industrialists, or seen their land polluted by the new factories next door? That's doubtful too.

Voters across India hope he will recreate Gujarat's growth success across the whole, vast country. We should all hope so too. Because if he doesn't, and the victims of his policies like those Gujarat farmers become too numerous, his poll ratings will slump. And with his history of falling back on Hindu nationalism when the going gets tough, that will mean worrying times for India's 170 million Muslims.

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