It is now Modi’s India. And, Modi’s India is a place of grand ambitions, great expectations and high hopes. As a native of India who has found success in America through business enterprise, my hope is that Modi will change the course of economic history in India.
The people of India need relief and recourse. While campaigning, India’s newly-elected prime minister, Narendra Modi, painted a picture of a vital and vibrant 21st century India –an India that would rival and might eventually outpace China’s dramatic growth of the past decade. He emphasized economic development and job creation throughout the nation. He specifically called for building dozens of new cities, manufacturing hubs, bullet trains and hydroelectric power plants. The Indian people need a politician in whom to believe. By overwhelmingly voting in his favor, they expressed their view that they had found it in Modi.
Indeed, Modi is driven, disciplined and dynamic. He comes from a lower caste Hindu family and rose from the lowest rungs as a tea seller in his youth. After he joined the hardline Hindu nationalist organization , the Rashtriya Swyayamsevak Sangh, the leaders of the Bharatiya Janata Party (BJP), an offshoot of that movement, chose him to head the state of Gujarat in 2001.
As chief minister of Gujarat, Modi established a reputation in the pressas a “development man” and the “strong man.” Near the outset of his tenure, he created a program to bring electricity to all of Gujarat’s 18,000 villages. He also attracted substantial foreign investment to the state. Between 2004 and 2012, Gujarat averaged growth of more than ten percent.
This record of economic growth drew Indian voters to Modi and BJP like a magnet. The BJP won 282 seats to gain a simple majority of the 543 seats in the Lok Sabha, the lower house of Parliament, as announced on May 16 — the first time a single party gained the majority since 1984.
The ruling party, the Indian National Congress (commonly known as the Congress party) and the ruling coalition of parties, called the United Progressive Alliance (UPA), sowed the seeds of their own undoing by failing the economic aspirations of Indians. The upper echelons of the Congress party have been rocked by a series of corruption-related scandals and, because of this and other reasons, the country has suffered from governmental and policy paralysis.
This paralysis brought the Indian economy –which had been one of the fastest growing in the world until recently –to a grinding halt. The economic performance of the past few years is the worst that it has been since the 1980s. Between 2010 and 2013, India fell from 51 to 60 in overall rankings of nations by the World Economic Forum. Earlier this year, Gallup reported that a record 35 percent of Indians polled felt that the national economy was getting worse. And, also earlier this year, Pew reported that 89 percent of people felt that rising prices were a ‘very big problem.’ These numbers and the election results prove that in this 2014 election in India –just as it was in the United States in 1992 (“It’s the economy, stupid.”), a simple edict held true: It is the economy, yaar (a colloquialism in India akin to “dude.”)
For his supporters, Modi is the perfect antidote to all that ails India at the moment, including corruption, misgovernance, and lack of muscular leadership. In Gujarat, he built a record that contrasts quite favorably against that of the central government over the past five years, especially in governance, development and foreign investments.
As a result, Indian markets have reacted positively to Modi. According to Reuters, since the BJP nominated Modi as its prime ministerial candidate, India’s National Stock Exchange rose 17 percent. On Monday, May 12, as the voting ended, the stock markets closed at a second straight record high. When it was announced that Modi won, the stock market set another record.
Over the next year or two, we’ll see whether the euphoria in the financial markets and electorate is deserved. Key policies he intends to implement include: curbing inflation, fighting corruption, increasing use of the internet in the private sector and government and making the government more transparent and accountable.
Nonetheless, it won’t be as easy for Modi to accomplish economic growth on a national basis as it was in Gujarat. India is diverse. Regional parties hold sway in a number of key states. The BJP holds control in only five of 29 states. Congress and other opposition parties still dominate the upper level of Parliament, Rajya Sabha. So, designing and implementing programs with national scope and impact won’t be a cakewalk.
In addition, despite gaining substantial support from Muslim voters, Modi will have to secure the confidence of India’s Muslims, which make up close to 15 percent of the population. Much of the community hasn’t forgiven him even 12 years after the 2002 Gujarat riots which resulted in Hindu mobs killing over 1,000 Muslims. Many blame him for not intervening to stop that slaughter. India’s secular elites have also remained skeptical of the BJP leader, though he has been able to win over some of them in recent years.
Realizing Modi’s ambitions won’t be a self-fulfilling prophecy. Success will depend on hard work and sustained efforts. Success starts, however, with a bold and inclusive perspective.
India has such a perspective today. Time will tell how that perspective transforms India. But fixing India’s economy is key to Modi’s success.
Frank Islam is a philanthropist and chief executive officer of FI Investment Group. He is on the International Advisory Council at the United States Institute of Peace. He can be reached