Narendra Modi’s election as Prime Minister in May 2014 was initially hailed worldwide as marking the advent of a more business-friendly government in the world’s largest democracy. Encouraged by Modi’s pro-market sound bites – he vowed to “replace red tape with a red carpet,” declared that the government has “no business” in business, and campaigned on the slogan “Make in India” – investors rushed to praise him as a new messiah of development.
Modi’s Bharatiya Janata Party (BJP) gained the first absolute majority in the lower house of parliament in a quarter-century, thereby freeing it from the pressures and constraints of coalition governance. Modi’s trips abroad brought talk of new business opportunities, a wave of foreign investment, and joint ventures. He vowed to improve India’s ranking in the World Bank’s global “Doing Business” report, from a dismal 142nd place to at least 50th.
Such talk continues, but it seems increasingly removed from the BJP’s central preoccupations. In fact, Modi rose to power at the head of a family of right-wing organizations that largely do not share his economic priorities, and that are obsessed with so-called “cultural nationalism” – which is essentially just repackaged Hindu chauvinism.
The tension between Modi’s avowed economic reformism and the cultural nativism that animates his government’s electoral base is a major impediment to progress. After all, the political majority that Modi needs to pursue his economic policies depends on the organizational capacity of the very people whose chauvinism is undermining him.
In fact, Modi’s rise was followed almost immediately by a series of attacks on India’s minorities, particularly Muslims. A legislator from Shiv Sena, a far-right regional party allied with the BJP, forced a Muslim cafeteria employee to eat bread during the Ramadan fast. A more tragic fate befell a young Muslim tech worker in Pune, who was beaten to death in “retaliation” for a defamatory social-media post with which he had no connection.
Then came a nationwide scare about “love jihad” – an alleged Muslim ploy to make India a Muslim-majority country by seducing Hindu girls into romantic entanglements that would lead to their conversion to Islam. No sooner had this BJP-fueled hysteria been widely dismissed – Muslims comprise 13% of India’s population, and there have been only a handful of such marriages – than the inflammatory rhetoric mounted.
A prominent Modi supporter declared that all Indians had to acknowledge that they were culturally Hindu. A member of the Council of Ministers divided the country into Ramzada (believers in the Hindu god Ram) and Haramzada (bastards) – and was allowed to retain her post. Another BJP legislator declared Mahatma Gandhi’s Hindu-nationalist assassin to be a patriot, while a fringe party in the Modi camp announced a campaign to install the assassin’s busts throughout the country.
The galloping chauvinism has known no bounds. Modi himself made the embarrassing declaration – in a speech at a new hospital, no less – that the figure of the Hindu god Ganesh, with its elephant’s head on a human body, attested to the ancient Hindus’ knowledge of plastic surgery.
The education ministry abruptly withdrew German as an optional third language in government schools, and replaced it with Sanskrit. And the Rashtriya Swayamsevak Sangh, a volunteer organization modeled on the fascist groups of the 1920s – complete with khaki shorts and staves – declared a campaign of Ghar wapasi (“return home”), or reconversion of minorities to the Hinduism from which their ancestors had allegedly lapsed in the distant past.
The resulting controversies have convulsed the country and dominated political discourse, sidelining Modi’s economic policies in the process. Indeed, protests by opposition parties have paralyzed the parliament, making it impossible for the government to introduce – let alone pass – important elements of pending economic-reform legislation, such as a law raising the limit on foreign-owned stakes in the insurance sector to 49%.
Yet Modi has said nothing to quiet his supporters or mollify his critics, raising concerns among investors – especially foreigners – about his ability to manage his own constituents. For example, Lorenz Reibling, of the German-American firm Taurus Investment Holdings, had a few questions – beginning with the implications of recent anti-Christian and Muslim tirades and conversion propositions – before committing to a major investment in India.
As Reibling put it, “Conversion and ethnic/religious cleansing doesn’t ring well here in Germany particularly. The bizarre dream of a 100% Hindu India would be an India with little or no foreign support. That is not what India deserves.” If Christians, in particular, are exposed to an “inquisition in reverse,” he observed, they would scale back investment considerably. Similarly, Reibling added, Middle Eastern investors would respond to an anti-Muslim policy by cutting India out of their portfolios.
Reibling is far from the only investor to harbor these fears; indeed, he was merely expressing what his fellow investors abroad have been discussing among themselves. The alarm bells have already rung.
Modi has found himself in an unenviable position vis-à-vis his own supporters: He cannot live with them, and he cannot live without them. Unless he can find a way to resolve his political dilemma, hope for a “Modi miracle” in India’s economy will ebb as rapidly as it rose.
Copyright: Project Syndicate, 2015.
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