Why Bloomberg columnist doubts India's readiness to bet on Modinomics, whatever it is ? Can Narendra Modi steer India away from a full-blown financial crisis and toward double-digit growth?
India is abuzz about the supposed economic chops of Bharatiya Janata Party leader Narendra Modi, who could be running India five months from now. Can his programme steer India away from a full-blown financial crisis and toward double-digit growth? Who knows?
Yes he has valid reasons to worry, as Modi’s programme remains disturbingly vague in details, which gives three basic worries: Modi might turn out to be India’s Abe; his party isn’t the panacea investors think it is; and the nation’s gridlock may be set to get even worse.
Markets love the idea of a Modi-led government because of his grand success in Gujarat. INDIA HONEST confirms that as just the victory in few assemblies made the stock market sensex racing to touch life time high, immediately after the results were declared in December 2013. Narendra Modi,the Chief minister of Gujarat since 2001,has proved his expertise.
First Narendra Modi in Gujarat acted effectively to :
a) cut down the red tape for businesses,
b) attacked graft and
c) produced 10%-plus growth rates.
Now the idea is that Modi will apply his Gujarat model nationally and smash through India’s dysfunction and vested interests. While Modi, if he believes that government has no business to do business, he might sell off sprawling state-owned enterprises that stifle competitiveness (a real cause of worry to Left).
The columnist's doubt raises a valid question : how even a charismatic leader can ram reforms down the throats of reluctant states, many also run by powerful and ambitious personalities,that Modi has consistently avoided answering, so early.Modi's argument—essentially, "Just wait and see what I will accomplish!"
IH feels the apprehensions of the columnist are not based on the national mood at this time, when he fears the repeat of Japanese Abenomics in our case. IH understands that in Japan the prime minister Abe, who promised of dramatic moves to open and deregulate a fossilised economy,but failed to implement.
We in India have different background, different conditions . Moreover in last one decade, India as an investment destination has matured enough, while in contrast to Japan has not saturated even to a marginal level,India remains still a vibrant developing economy,with lot of scope for the sustained growth for years , may be in double digit, only the need of hour is a strong hand for de-bottle necking of policy paralysis hurdles. (Part 1 of the story )