Is Modi too big a man for India?

Is Modi too big a man for India?



MAY 5, 2014

OSAKA – There is the widespread notion in India and abroad that, although voting goes on until May 12, it is all over bar the counting and the celebratory announcement of the results: Narendra Modi, the controversial leader of the Bharatiya Janata Party and chief minister of Gujarat state, is all set to become the next prime minister of India.

Modi has a lot of powerful people rooting for him. Most Indian big business is certainly for him, putting its money where its mouth is.

Additionally, foreign institutional investors have poured more than $10 billion into India this year on the expectation of a stable and pro-business government from May with Modi in charge. Here is a man who “can get things done” as one expatriate Indian businessman put it, singing from the common hymn sheet of support for him.

Modi has picked up some strong intellectual support also. Professor Jagdish Bhagwati, described as the most famous living economist not to have been awarded a Nobel prize, told Reuters that he saw himself as serving on an advisory council if Modi becomes prime minister.

There is a feeling, with which I can sympathize, that the old government led by Congress, nominally led by Manmohan Singh but subject to who knows what string-pulling from the Gandhi family and other old barons, has lost its way. Ten years in power is too long and too many temptations too far for any government in any country.

Governments in the United Kingdom, including Margaret Thatcher on the right and Tony Blair in the center, have demonstrated that seven or eight years in power sap the energy and imagination of any government.

Far be it from me to try to rain on Modi’s parade even before he has had a chance to celebrate, but there are some issues of concern which have been glossed over in the hope that he may be a saving genius for India.

I am not talking of whether Modi was involved in the 2002 Godhra riots and killings, though some Indians still believe that doubts over his role disqualify him from the highest office.

The U.S. has refused to grant him a visa because of lingering questions concerning his responsibility, but Washington would not want to continue denying a visa to someone voted into power by the people of India.

Sensing that power is within his grasp, Modi has been presenting himself as a potential ruler for all, someone who would concentrate on good governance, greater economic growth and employment. His record was sullied by his slowness to condemn some incendiary speeches from his party members, with one claiming that all Modi dissenters would be “packed off to Pakistan.”

But Modi eventually intervened with a Tweet that said he disapproved of such statements.

It is a sign of the desperation of Congress and its supporters that they have been making personal attacks on Modi himself and his origins from a poor family. But Modi showed his ability to turn a phrase in returning the attack, sending a Tweet that “Manner in which Cong, SP & BSP are mocking my poor background shows their mindset. Yes, I am proud I sold tea … I never sold the nation.”

Meanwhile there are signs that some Muslims are reconciled, not merely resigned, to Modi becoming prime minister. The most famous is veteran journalist M.J. Akbar, who raised eyebrows recently when he joined the BJP, to widespread murmurs that this was a matter of opportunism, or “the economics of politics” as one blogger put it. Akbar once compared Modi to Hitler.

The biggest problem with the rise of superhero Modi as the potential savior of India is that it follows the “Big Man” model, which is flawed anyway, but flawed many times over in the case of diverse and complex India.

The rise and downfall of Indira Gandhi should have taught that. After victory in the war that created Bangladesh, she had power that an emperor could only dream of. But she wasted it continually looking for rivals to destroy. The economy suffered, even though she dressed it in “socialist” clothes that simply created new vested interests.

India long had problems generating economic growth. Even in the post-Independence days of Indira Gandhi’s father Jawaharlal Nehru, the ruling Congress Party was described as a giant banyan tree under which many sheltered but nothing grew.

Modi has some clear ideas and has shown himself to be a man who is impatient for results. But unlike, say Xi Jinping in China, he has to work in a democracy and subject himself to a fractious parliament with policies distilled through a bureaucracy jealous of its powers and resistant to change.

China too, despite its vastness and regionalism, is united by a common language and under the rule of the Communist Party, whose sway extends to the smallest and remotest municipalities. China has nothing like India’s regional strength or regional political parties who want their say in national politics. Unless he wins a sweeping victory, a prime minister Modi will have to make accommodations with rivals even from the first day.

He may also have to change some of the cherished “small-town” economic policies of his own BJP at least — according to economist Bhagwati — if he wants to step up India’s opening to the world to aim again for double-digit growth rates.

Of course, Modi’s supporters point to his record in Gujarat of “getting things done”, with a growth rate superior to India’s economic growth. People have already begun to talk of “Modinomics”. Gujarat under Modi has grown by 6.9 percent a year in the 2000s against the national average of 5.6 percent, a superior, but hardly stellar, performance. Maharashtra, the richest state in per capita income, grew in the 2000s by 6.7 percent and Bihar, India’s poorest state, picked up speed to grow by 6.9 percent, so Modi did not have his own special magic economic formula.

If Modi hopes to project Modinomics on a national stage, consider that Gujarat’s performance on human development in the 2000s fell below India’s. For Modi or for any new prime minister, a key task is to offer opportunities to several hundred million Indians who live below the poverty line with limited education and few job prospects.

Their joining the economy is a surer way of boosting growth, rather than by playing into the hands of already rich Indian and foreign capitalists, many of whom have made their billions by playing on scarcity and rent-seeking.

Will Modi bite the big business hands that fed his coffers by subjecting them to competition that could release new ideas and energy?

Does Modi have the imagination and the plan and the skills to work with others to get things done where it really counts — at India’s grass roots where often there is no grass?

Recent biographies paint him as the ambitious, typical Big Man of politics, perhaps too big for India.

Kevin Rafferty was executive editor of the Indian Express newspaper group.


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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