April 6 :
"Acchhe din aane waale hain" (good times are coming) was Narendra Modi's campaign slogan in 2014, when he was riding high in the election.
The value of the Indian stock market has increased thrice since Mr. Modi assumed power, and he is well positioned to secure a second term as prime minister in elections beginning on April 19. India's GDP is nearly double its size compared to its previous year.
The percentage of Indians with sufficient money and a willingness to take financial risks has increased dramatically, going from about 2% to nearly 5% of the population, which is a major factor in the stock market's meteoric growth. On the other hand, there is a significant income gap. The wealthy few, particularly a small group of very large and tightly controlled companies, are responsible for most of India's economic progress.
An estimated 90% of India's 1.4 billion people live on less than $3,500 each year. However, the expansion of welfare programmes under Mr. Modi has made living more bearable in the poorest rural districts. Free grain bags, toilets, petrol tanks and building supplies are just a few of the tangible advantages. Modern conveniences brought about by purely commercial advances have altered the character of free time in rural areas, such as the introduction of LED lighting, inexpensive cellphones, and almost free mobile data.
In contrast to the United States, which has been going through a "vibecession" and feeling down despite positive economic news, India has been feeling just the opposite. The signals are all over the place, but the energy is great. Consumers in India are now the most optimistic in the world, according to surveys conducted abroad.
The Modi economy is making even non-Indians happy. Morgan Stanley and JPMorgan Chase are among the many banks that are hastily increasing the weighting of India in their worldwide bond and equity indices. According to Chris Wood, a highly esteemed Asian market expert, the Indian markets could fall by as much as 25% if Mr Modi is not re-elected this year.
Even though Mr. Modi frequently accuses the previous government of ruining the country, India's growth rates over the last decade have been quite similar to those of the previous decade. This is an odd aspect of the optimistic outlook on the Modi economy.
While the Indian economic success story is undeniably true, it is also a reflection of what may be the most striking feature of Mr. Modi's tenure as prime minister: his mastery of all power levers, with showmanship taking precedence.
In New Delhi, Mr. Modi's visage is more visible than that of any other democratically elected leader in the world. Before last September's Group of 20 meeting, his slogans claimed credit for almost every good thing that happened in this economy that was just starting to take off.
Even those who are pessimistic about the Indian economy are excited about the current bullish mood. Most Mumbai-based financial experts estimate growth of 6 to 6.5 percent for the current fiscal year, whereas official data predict 7.3 percent. It would still be better than the US and maybe China, even if the lowest projection only reaches 4.5%.
No amount of doubt is ever voiced. People in the economics field who rely on government contracts should be cautious not to be too forthright. Due to the raids and closures of independent think tanks, there is a growing scarcity of economists who do not collaborate with the government.
When compared to Mr. Modi's predecessor, the renowned economist Manmohan Singh, the level of message control is significantly higher. Despite occasional 10-percent growth, India gained the reputation of a "flailing state" under Mr. Singh's administration.
Indian government institutions have been undergoing a transformation under Mr. Modi's leadership. On a national level, political rivalry has been virtually eradicated, and he has capitalised on hatred towards the 200 million Muslim citizens who make up the country's minority.
In purely economic matters, Mr. Modi has also exercised governmental authority, with mixed results at best. The infrastructure is in absolute disrepair. The fact that construction is progressing at all is encouraging, even though there is considerable overbuilding. The responsiveness of welfare programmes has increased.
India has made great strides in digitalization, particularly in the realms of banking and commercial operations. The initiative started under Mr. Singh's administration, but Mr. Modi has continued it. Aadhaar is a biometric identification system that forms the basis of the "India Stack," a collection of digital platforms that enables Indians access to cheaper and faster peer-to-peer transactions than Americans.
We have changed the tax system. For example, similar to Europe's value-added tax, India's Goods and Services Tax has brought more of the economy into the formal sector, enabling the government to collect more money from more individuals and companies. As a result, monies were made available for both public expenditure and private funding through the reduction of corporation tax rates.
On November 8, 2016, at 8 o'clock in the evening, Mr. Modi unilaterally stated that all large currency notes were instantly useless, which is one negative entry in the digital ledger. That was meant to prevent criminals from having access to "black money." Economic activity was instead hindered.
The Indian government's ability to move swiftly and, often, unchecked has distorted reality and exacerbated inequality in other ways as well. The largest corporations have reaped enormous profits. According to Marcellus Investment Managers of Mumbai in 2022, out of the $1.4 trillion in wealth generated by the most illustrious stock index between 2012 and 2022, 80% went to just 20 corporations. Those businesses have the ability to communicate with the government on an individual basis.
Gautam Adani is the best example of the dangers and consequences of corporate wealth concentration. Prior to his unexpected rise to the position of world's second-richest person in 2022 (after Elon Musk), very few people outside of India were familiar with his name.
After Mr. Modi's election, the flagship stock of Mr. Adani's group increased by eight times its size following his re-election in 2019. It nearly doubled in the year following his election. Constructing solar farms, ports, roadways, and bridges at record speeds, the Adani Group effectively became the government's logistics arm.
Then, a New York short-seller accused Mr. Adani's enterprise of fraud last year, resulting in a $150 billion loss for Mr. Adani. Mr. Adani has recovered much of the money he lost, but the incident did show a danger in Modi's plan to let the very few at the very top accumulate tremendous influence. He disputed the allegations.
Aside from businesses, the recent rise in India has been disturbingly uneven for individuals. Its consumer market attracts a lot of international investment because it has the biggest population in the world. Free food rations are provided to the poor in an effort to combat malnutrition; the majority of Indians live in rural areas, and 75% of them are considered poor by most standards. Even if that calls for prudence, it does provide space for improvement.
There have been years-long waiting lists for vehicles like the Mercedes G 63 due to the growing sales of luxury products, particularly after the pandemic. Motorcycles and scooters carry more people in India than all four-wheel drives put together, but sales have remained flat.
When it comes to the economy, the jobs situation is the worst. The official unemployment rate in India is around 7%. Even more are chronically underemployed. Tragically, Indians seeking better economic opportunities overseas have lost their lives in the last month while attempting to cross the US-Mexico border, fighting in Ukraine as poorly prepared mercenaries for Russia, and filling the void left by Palestinians compelled to leave Israel's workforce.
Even so, it appears certain that India will rise to the top of the global economy. By some estimates, it will overtake Japan and Germany to become the third largest economy in the world in the not-too-distant future, having already surpassed Britain to claim the fifth spot.
Opportunities for Indians are anticipated to increase as more multinational enterprises are projected to swarm to India. Although they are still a tiny fraction of the population, even in smaller places you can find people who can't afford the kind of lifestyle that most Americans take for granted.
Companies without political ties continue to face obstacles from bureaucracy. However, progress is being made, which is encouraging. Projects that previously needed two years to obtain permission can now be finished in just fifteen days.
Along with the acchhe din, Mr. Modi also promised "minimum government, maximum governance," which makes him seem like a free marketeer from the 1980s in the United States. Both theory and ideology have failed to characterise his economic strategy in practice. In an effort to determine what will work, he has flung everything against the wall. His throwing has been continuous and forceful. Economists no longer use the term "flailing state" when discussing India.
