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HindustanTimes Wed,27 Aug 2014

Capitalist hero: how Modi made reforms work for Gujaratis

Ashok Malik   November 01, 2012
First Published: 08:21 IST(1/11/2012) | Last Updated: 22:42 IST(9/6/2013)

Two opinion polls related to the Gujarat election of December 2012 have been publicised this past week. The first, commissioned by Headlines Today and India Today, gave the BJP a conclusive majority and 128 seats in a legislative assembly of 182 members. The second, commissioned by CNN-IBN and the Week, did not go into seat projections but said the BJP would get 50% of the vote and the Congress only 36%.

Both polls indicated a comfortable degree of satisfaction with Narendra Modi and his government. In the Headlines Today-India Today poll, two of every three Gujaratis--67%--felt the current model of industrialisation was positive and creating jobs. In the CNN-IBN-Week poll, 43% said Gujarat had developed more under the BJP than under previous Congress governments. Fifty-eight% felt Gujarat's development had benefited in the past five years.

Of course, these were not the only questions and figures on the economic situation in Gujarat. There were others in the CNN-IBN-Week poll that suggested:
A positive rating for Modi because he had built on a historical legacy (67% felt road conditions in Gujarat, traditionally ahead of the rest of India, had improved further in the past five years)

A positive rating for Modi because he had addressed distribution and access challenges, particularly in rural areas (63% felt supply of electricity had improved)

Continuing challenges for Modi (42% felt just the rich had benefited from economic development in Gujarat, though only a slightly smaller 40% felt both rich and poor had benefited)

Given the sense of let-down Indian voters have for governments they elect, Modi's ratings are staggering. They speak for a trust in him and a sense of optimism. Even if a Gujarati citizen hasn't benefited (or benefited adequately) from the economic boom of the past decade, he or she still feels there is hope and implicitly trusts Modi's model.

What is the larger message from this? It is that economic liberalisation, the rolling back of the state from areas where it is not needed and market-based reform can work in India and win votes. Modi has proved it. However, two caveats need to be entered.

A file photo of Gujarat chief minister Narendra Modi and Tata group chairman Ratan Tata. HT Photo

First, there is the language in which this phenomenon is packaged. Rather than talking of strengthening the market system, Modi talks of empowering civil society, entrepreneurship and the citizen. Rather than front-ending industrialisation, he talks of job creation, development of soft skills (to make young Gujaratis more employable in emerging sectors of the economy) and using technology to help the farmer.

Second, there is the honesty of purpose. Too often in India has facilitating private sector entry become a camouflage for crony capitalism. The UPA government has suffered enormously on this score, and so have governments of various parties in the states. Allocation of finite resources--land, minerals, spectrum--has not been transparent and above board. This opaque process has delegitimised what is a legitimate and necessary transfer.

Why has this not happened in Gujarat? After all Modi and his government have been accused of giving land at concessional rates or offering tax breaks to companies, but none of these charges has blown up into a public scandal. Why?

A file photo of Gujarat chief minister Narendra Modi and Tata group chairman Ratan Tata. HT Photo

It must be understood that it is within the remit of the government--any government, of any party, in any state--to transfer finite resources to third parties to propel economic growth and create jobs. This is a policy decision it has every right to take. However, what it does not have the right to do is pick and choose those third parties in a dodgy manner, without an easily understood logic. The government's decision has to be driven by the enlightened idea of helping the state and society at large, rather than the narrow idea of rent seeking by influential elites.

Modi's probity has been critical here. For example, when he helps Tata Motors buy land for the Nano plant, or offers it tax breaks, his voter believes the chief minister is doing this to trigger a manufacturing surge in Gujarat, and not because his sister's husband is running a JV with the Tatas.

What Modi has established is capitalism, reimagined for the Indian context and imbued with Indian characteristics, can be politically successful in this country. Crony capitalism is quite another matter.

(The writer is a political analyst based in Delhi. He can be reached at malikashok@gmail.com. The views expressed are personal.)

The story was first published on 1st November, 2012.


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