Those who've been following my rants know that I'm not a fan of Hindu nationalist Narendra Modi, who won a decisive victory in India's national elections last week, delivering a historic "shellacking" to the ruling Congress Party. His campaign shrewdly buried his Hindu extremism and articulated a message of economic hope calculated to boost the spirits of Indians reeling from a lost half-a-decade of economic growth. Many have compared his mantra of "good governance, small government" to Reagan's, never mind that Modi's sarcastic and condescending personal style couldn't be more different than Reagan's cheery amiability.
Be that as it may, I note in a piece up at Time that if Modi is going to turn around the country's economy, he'll have break at least five campaign pledges right off the bat:
1. Stop Propping Up Inefficient Public Sector Companies
More than 20% of India's economy consists of poorly run, federally owned companies…
But last month, Modi made the face-palm inducing statement that beating up on these companies has "done much damage" to them.
2. Abandon Gaudy Infrastructure Projects
There is no doubt that India needs to improve its infrastructure – pathetic even by developing countries' standards – if it wants to boost productivity and growth…
But Modi has produced an infrastructure development plan as gaudy as Liberace's Christmas tree, complete with "bullet trains in four directions."
3. Kill Wasteful Subsidies
Modi's stump speeches repeatedly, and rightly, reminded voters that the Congress Party's game of "vote-bank politics" – handing welfare subsidies to special constituencies to win votes – was ruining the country without improving living standards. Modi's solution? More subsidies.
4. Let in Big Box Foreign Retailers
Modi, this fearless reformer who prides himself on having attracted a record amount of foreign investment in Gujarat, agreed to scrap the law [that allows Big Box stores such as Walmart into India's retail sector]. Why? Because it threatened millions of small mom-and-pop storeowners, his party's core base.
5. Keep Inflation Hawk Raghuram Rajan as India's Central Banker
Modi is admittedly between a rock and a hard place on this [whether to prioritize growth over slaying inflation]. But Reagan, his role model, allowed the central bank to first squeeze out inflation, and so should he.
Go here for the whole piece.
Here is an excellent discussion I moderated at the Asia Society back in February about how much of an economic reformer Modi was really going to be with AEI's Sadanand Dhume, Columbia's Arvind Panagariya, who is slated to become Modi's economic advisor, and Carnegie Endowment's Milan Vaishnav.