Modi’s reforms could speed up India’s transformation
Prime Minister Modi’s reform agenda received relatively high marks at a high level panel at Asia Society, New York City, hosted by the former Australian PM Kevin Rudd, who is now the President of Asia Society’s Policy Institute (ASPI). An impressive lineup of participants included journalists, policy makers, diplomats and business executives, led by the Indian ambassador to the US, Arun Kumar Singh.
Rudd, who chaired the session, stressed the geostrategic importance of India. He said the twin questions that concern the citizens of the world are the rise of China and India. These are of equal importance to the work of Asia Society. Having been a PM himself, he said, the work of democracies is loud and noisy, “of which India is a particularly loud and noisy democracy.” Making the political economy work requires “a special kind of alchemy,” and we want to see how far Modi has come in the first year.
The US-India Joint Statement, ‘Shared effort; progress for all,’ issued on Jan 26, 2015, when Obama visited India’s Republic Day is “a remarkable document”, Rudd said, and it is seen in the same way “across Beijing to Tokyo and elsewhere.”
Rudd also talked about the visit by the Chinese President Xi Jinping to India and Modi’s visit to China. “The remarkable photograph of PM Modi standing with the entombed warriors in Xi’an with very cool shades was, I thought, a remarkable piece of political chutzpah. I enjoyed it very much as a political observer, apart from its foreign policy content,” Rudd said.
Modi’s visit to China was “long and substantive and, having spoken to many on either side, was productive and there is much more to come,” according to Rudd.
In addition to India’s relationship with China and the US, India’s place in the wider Asian context is significant. ASPI is trying to rebalance its own policy initiatives, with an eye towards including India as a member within the larger APEC family, and advising India and China to collaborate towards curtailing HFCs for the upcoming Paris climate summit, COP 2015.
Ambassador Singh presented a record of government’s achievements for the first year, highlighting a consensus on India’s growth projections to be the highest in the world at 7.5percent for the next year, according to IMF. The Modi government has been “corruption-scandal free” for the past year, bringing down the “transaction cost” of doing business in India.
“The PM’s vision of making India a global manufacturing hub, with the state-of- the-art infrastructure, respect for IPR, a friendly bureaucratic regime, and a skilled work-force has created opportunities for businesses. The broad direction for the economy has been set,” said Ambassador Singh.
The macroeconomic picture has improved considerably. Thus, under Modi India has attracted $41.22 billion in FDI, a 30 percent increase from the previous government; in some sectors, such as railways, the government has increased FDI to 100 percent.
Modi has deployed “diplomacy for development” as his mantra for the first year, reaching out to more than 100 countries, big and small, displaying a more confident and outgoing nation. His foreign outreach has been truly global; the ambassador called it “omnidirectional diplomacy.”
Indian diaspora has been called upon in an unprecedented manner to help transform Indian society and economy. With Modi’s personality and dynamism drawing in large audiences in major cities such as NYC, Toronto, and Melbourne, there is a renewed sense of optimism about India’s past, present and future.
Most commentators agreed that the feeling of India’s revival has been inspired by Modi. The senior Indian diplomat and national security advisor Shivshankar Menon said there was a new openness via-a-vis the West. Ashley Tellis, Carnegie Endowment for international Peace, spoke in-depth about renewed US-India partnership.
Rakesh Mohan, executive director at IMF, stressed that the first year was “a year of repair.” India needs a growth rate of 8 percent or higher for next two decades to catch up with the Chinese economy. While Modi may have made significant strides, Mohan claimed, private investment in India was still lagging. India has been growing on average at 6.5 percent for the past 35 years despite the various shifts in government, and according to many institutional investors, this is likely to continue.
Sandra Peterson, Global Chairman, Johnson & Johnson, expressed serious concerns about the healthcare sector and the lack of innovation long overdue, but she seemed less troubled about corruption.
Senior journalists Indrani Bagchi, Times of India, and Shekhar Gupta, Mediascape and NDTV, highlighted the consistencies between the previous administration’s policies and the current BJP government.
Gupta jested the current batch of BJP administration is far better at “politics” than the previous government, while the Congress Party had better intellectuals, economists and policy makers, who were poor executioners.
Bagchi suggested the honeymoon with Modi may soon be over because he has not secured the seats his party expected to win in the Rajya Sabha. Yet she spoke about the acute sense of religious revival Modi has ignited with a “missionary” zeal to clean up public spaces, including, government and bureaucracy.
Thus, it remains to be seen whether reformer Modi will be able to accelerate India’s long awaited transformation.
Dinesh Sharma is associate research professor at Binghamton University’s Institute for Global Cultural Studies in Binghamton, N.Y. He is the editor of The Global Obama: Crossroads of Leadership in the 21st Century, published by Routledge Press. His previous book, Barack Obama in Hawaii and Indonesia: The Making of a Global President, was rated as the Top Ten Black History Book for 2012.
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