Modi’s policies are more continuity than change

Modi’s policies are more continuity than change

Despite Modi’s promises of change and reform, there is a remarkable continuity in India’s public policies.

Since the late nineties, political consensus on economic reform pathways and foreign policy orientations has been higher in India than in any other democracy in the world. This is counter-intuitive as India’s democracy comes across as rapturous, chaotic and even highly divisive. By making rebels stakeholders, especially after the advent of coalition politics, India’s democracy has been successful in bringing about macro-governance consensus, with pragmatic centrism overpowering left and right-wing ideologies.

When the Narendra Modi-led BJP was about to cross the finish line in the 2014 Parliamentary polls, leaving others way behind, there was expectation among the right-wing ideologues that he would make a decisive shift in the lines of Margaret Thatcher and Ronald Reagan. After PM Modi assumed power in New Delhi, his tweets became  news feed as he shunned a media that projected him as a messiah in the run-up to the polls.

The only media interaction he had was with Japanese journalists before his moderately successful visit to Japan. A couple of weeks before he embarked on his trip to the United States, he gave his first ever international interview to CNN’s Fareed Zakaria. He followed this up with an op-ed in the influential Wall Street Journal on the day he arrived in New York City, later followed by his maiden speech at the UN.

In these events, the features of Indian grand political consensus are clear. Prime Minister Modi’s choice of words in the interview, his Wall street journal article, and his speech at the UN General Assembly indicate a broad continuity of his predecessor’s outlook and policies.

Continuity of the grand consensus

The ruling BJP and the Congress give priority to economic growth and inclusive development. The market is free, yet the state will not keep completely in the background. It will continue to make massive investments in physical infrastructure and the social sector. PM Modi’s financial inclusion program mandating state-run banks to open no-frills accounts for millions is a case in point. He did not mention any other program in detail than the no frills account program in his speech to non-resident Indians at Madison square.

The governments will also strive to make life easier for businesses to operate. The Congress Party-led government had the same objectives, like setting up a single window system, a national manufacturing policy and a skill development mission to promote manufacturing, but inadvertently made a labyrinth out of the system and took retrograde measures in the name of ensuring tax compliance. Moreover, the power structure in the Congress-led coalition regime almost made the Prime Minister lesser than ‘first among equals’, leading to a sense of paralysis in functioning. Now with Modi in power, the executive head is more powerful than in a Presidential system. He assured American investors in no uncertain terms of a red carpet welcome to revive Indian manufacturing.

Indian leaders resist power politics in international relations unless they are forced to. This has to do with the two horrendous wars India’s founding fathers had witnessed. Again, Prime Minister Modi was sounding more optimistic than any other western leader when he stated that China would continue to respect the current international order. He called the world a family (Vasudaiva Kudumbakam) in his UN speech, exactly the same made by the previous Prime Minister Manmohan Singh in his maiden UN speech.

Indian political leadership has always preferred a rule-based international order, including the way it deals with multilateral trade, which, however, must be equitable. In other words, the concerns arising out of developmental deficits must be accommodated. To the chagrin of many neo-liberals, Modi’s government scuttled the WTO trade facilitation deal after its demand for perpetual guarantees on food security subsidies were not satisfied. Again, Modi has highlighted the same in his speech at the UN where he emphasized India’s long held international position on the need to tackle collective challenges and framing universally acceptable norms of behaviour including in outer space and cyber space. He repeated like his predecessors on the need for more voices including India’s at the UN Security Council.

The grand consensus reached in India over the last two decades is here to stay. This is reassuring as dramatic policy changes could be unsettling for investors eager to take Modi on his word. However, it should also caution those who expect a radical change in India’s direction. This is true under even Modi, India’s most powerful Prime Minister after thirty years. The recipe for Indian growth is ready, but whether Modi will deliver as he promised is to be seen.

About Author

Sundar Nathan

Sundar is currently a contributing analyst for IHS. Prior to that, Sundar was a project member at the Institute for Defence Studies and Analyses. He also worked at the Janaagraha Centre for Citizenship and Democracy where he helped launch a comprehensive study of urban governance in India. He has a Masters in International Public Policy from University College London.