Five Promises Narendra Modi Will Have to Break

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…

Instead, 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.