Don’t Believe Modi’s Economic Success Story

Tim Sahay in Foreign Policy:

While campaigning for the U.S. presidency, Joe Biden sharply criticized the Modi government’s human rights record, writing how two of its landmark laws are “inconsistent with the country’s long tradition of secularism and with sustaining a multi-ethnic and multi-religious democracy.” Today, Indian Prime Minister Narendra Modi leads a country that is suddenly at the center of U.S. strategy in Asia. And Biden has changed his tune, inviting the prime minister to a state visit this week.

It’s widely understood that when U.S. elites refer to India having a functional free press, judiciary, and democracy, they are either dishonest or in denial about how the country’s political system has developed under Modi. But the same is true when they praise India’s economy. The U.S. government seems to be operating under the assumption that Modi’s India can sustain the country as it decouples from Chinese manufacturing. There is little reason to believe that is true.

Modi’s “Gujarat model” shot him to the prime ministry in 2014. As chief minister in Gujarat, he had led a developmentalist state: midwifing new industries, repairing bureaucracies, and making huge electricity and infrastructure investments. The state’s growth rate boomed as subsidies were given to politically connected conglomerates and to state-owned players.

But the model has failed when extended to the national stage. While Modi has succeeded in selling himself to his constituents and the world as India’s great modernizer, builder, and attractor of capital, the country’s growth under Modi has flagged.

More here.