India under Modi

38.3.4: India under Modi

India under Modi, its right-wing, nationalistic Prime Minister, has gone through numerous neoliberal reforms that contribute to its impressive economic growth, pleasing businesspeople and industrialists but widening inequalities between the wealthy and the poor and highlighting the ongoing challenges of poverty, corruption, and gender violence.

Learning Objective

Explain who Narendra Modi is and the status of India in the 21st century

Key Points

  • Narendra Modi is current Prime Minister of India (March 2017). He is a member of the Bharatiya Janata Party and of the Rashtriya Swayamsevak Sangh (RSS), a right-wing, Hindu nationalist, paramilitary volunteer organization. Modi was appointed chief minister of Gujarat in 2001. His administration has been considered complicit in the 2002 Gujarat riots. In 2012, Modi was cleared of complicity in the violence by a Special Investigation Team (SIT) appointed by the Supreme Court of India, but the question remains controversial.
  • Modi led the BJP in the 2014 general election, which gave the party a majority in the parliament. The economic policies of Modi’s government focused on privatization and liberalization of the economy based on a neoliberal framework. Modi updated India’s foreign direct investment policies to allow more foreign investment in several industries, including defense and the railways. Other reforms included removal of many of the country’s labor laws to make it harder for workers to form unions and easier for employers to hire and fire them. These reforms met with support from institutions such as the World Bank, but opposition from scholars and unions.
  • In 2014, Modi introduced the Make in India initiative to encourage foreign companies to manufacture products in India with the goal of turning the country into a global manufacturing hub. In 2015, he launched a program intended to develop 100 smart cities and the Housing for All By 2022 project, which intends to eliminate slums in India by building about 20 million affordable homes for India’s urban poor.
  • Modi’s government reduced the amount of money spent by the government on healthcare and launched a New Health Policy, which emphasizes the role of private healthcare. He also launched the Clean India campaign (2014) to eliminate open defecation and manual scavenging. As part of the program, the Indian government began constructing millions of toilets in rural areas and encouraging people to use them.
  • In naming his cabinet, Modi renamed the Ministry of Environment and Forests the Ministry of Environment, Forests, and Climate Change. In the first budget of the government, the money allotted to this ministry was reduced by more than 50%. The new ministry also removed or diluted a number of laws related to environmental protection.
  • Massive corruption, widespread poverty, and violence against girls and women constitute some of the greatest challenges in 21st-century India. According to the 2014 revised World Bank methodology, India had 179.6 million people below the poverty line, which means that with 17.5% of total world’s population, India had 20.6% share of world’s poor. Findings from the World Economic Forum have repeatedly indicated that India is one of the worst countries in the world in terms of gender inequality.

Examples

Key Terms

Rashtriya Swayamsevak Sangh
A right-wing, Hindu nationalist, paramilitary volunteer organization in India widely regarded as the parent organization of the ruling party of India, the Bharatiya Janata Party. Founded in 1925, it is the world’s largest non-governmental organization that claims commitment to selfless service to India.
Bharatiya Janata Party
One of the two major political parties in India, along with the Indian National Congress. As of 2017, it is the country’s largest political party in terms of representation in the national parliament and state assemblies and the world’s largest party in terms of primary membership. It is a right-wing party with close ideological and organizational links to the Hindu nationalist Rashtriya Swayamsevak Sangh.
2002 Gujarat riots
A three-day period of inter-communal violence in the western Indian state of Gujarat in 2002. Following the initial incident, there were further outbreaks of violence in Ahmedabad for three weeks. Statewide, there were further outbreaks of communal riots against the minority Muslim population for three months. The Chief Minister of Gujarat at that time, Narendra Modi, has been accused of initiating and condoning the violence as have police and government officials who allegedly directed the rioters and gave them lists of Muslim-owned properties.

 

Narendra Modi

Narendra Modi (b. 1950) is current Prime Minister of India (March 2017), in office since May 2014. He was the Chief Minister of Gujarat from 2001 to 2014. He is the Member of Parliament for the Varanasi district (Utter Pradesh), a member of the Bharatiya Janata Party (BJP; one of the two major political parties in India, along with the Indian National Congress), and member of the Rashtriya Swayamsevak Sangh (RSS),  a right-wing, Hindu nationalist, paramilitary volunteer organization in India widely regarded as the parent organization of the BJP.

Born to a Gujarati family in Vadnagar, Modi helped his father sell tea as a child and later ran his own stall. He was introduced to the RSS at age eight, beginning a long association with the organization. He left home after graduating from school, partly because of an arranged marriage, which he did not accept. Modi traveled around India for two years and visited a number of religious centers. In 1971 he became a full-time worker for the RSS. During the state of emergency imposed across the country in 1975, Modi was forced to go into hiding. The RSS assigned him to the BJP in 1985 and he held several positions within the party hierarchy until 2001, rising to the rank of general secretary.

India's Prime Minister Narendra Modi in 2015

India’s Prime Minister Narendra Modi in 2015. Modi was also declared winner of the Time magazine reader’s poll for Person of the Year in 2014, a feat which he repeated again in 2016. Forbes Magazine ranked him the 15th Most Powerful Person in the World in 2014 and the 9th Most Powerful Person in the World in 2015 and 2016. In 2015, Modi was one of Time’s “30 Most Influential People on the Internet” as the second most-followed politician on Twitter and Facebook. In the same year he was ranked fifth on Fortune Magazine’s first annual list of “World’s Greatest Leaders.”

Modi was appointed chief minister of Gujarat in 2001. His administration has been considered complicit in the 2002 Gujarat riots, a three-day period of inter-communal violence. Following the initial incident, there were further outbreaks of violence in Ahmedabad for three weeks. Statewide, communal riots against the minority Muslim population occurred for three months. According to official figures, the riots resulted in the deaths of 790 Muslims and 254 Hindus. 2,500 people were injured non-fatally and 223 more were reported missing. There were instances of rape, children being burned alive, and widespread looting and destruction of property. Modi has been accused of initiating and condoning the violence as have police and government officials who allegedly directed the rioters and gave them lists of Muslim-owned properties. In 2012, Modi was cleared of complicity in the violence by a Special Investigation Team (SIT) appointed by the Supreme Court of India. The SIT also rejected claims that the state government had not done enough to prevent the riots. The Muslim community reacted with anger and disbelief. In 2013, allegations were made that the SIT had suppressed evidence, but the Supreme Court expressed satisfaction over the SIT’s investigations. While officially classified as a communalist riot, the events have been described as a pogrom by many scholars. Other observers have stated that these events met the legal definition of genocide and called it an instance of state terrorism or ethnic cleansing.

 

India Under Modi

Modi led the BJP in the 2014 general election, which gave the party a majority in the parliament, the first time a single party had achieved this since 1984. Credited with engineering a political realignment towards right-wing politics, Modi remains a figure of controversy domestically and internationally over his Hindu nationalist beliefs and his role during the 2002 Gujarat riots, cited as evidence of an exclusionary social agenda.

The economic policies of Modi’s government focused on privatization and liberalization of the economy based on a neoliberal framework. Modi updated India’s foreign direct investment policies to allow more foreign investment in several industries, including defense and the railways. Other reforms included removing many of the country’s labor laws to make it harder for workers to form unions and easier for employers to hire and fire them. These reforms met with support from institutions such as the World Bank, but opposition from scholars within the country. The labor laws also drew strong opposition from unions. The funds dedicated to poverty reduction programs and social welfare measures were greatly decreased by the Modi administration. The government also lowered corporate taxes, abolished the wealth tax, reduced customs duties on gold and jewelry, and increased sales taxes.

In 2014, Modi introduced the Make in India initiative to encourage foreign companies to manufacture products in India, with the goal of turning the country into a global manufacturing hub. Supporters of economic liberalization supported the initiative, while critics argued it would allow foreign corporations to capture a greater share of the Indian market. To enable the construction of private industrial corridors, the Modi administration passed a land-reform bill that allowed it to acquire private agricultural land without conducting social impact assessment and without the consent of the farmers who owned it. The bill was passed via an executive order after it faced opposition in parliament, but was eventually allowed to lapse. In 2015, Modi launched a program intended to develop 100 smart cities, which is expected to bring information technology companies an extra benefit of ₹20 billion (US$300 million). Modi also launched the Housing for All By 2022 project, which intends to eliminate slums in India by building about 20 million affordable homes for India’s urban poor.

Modi’s government reduced the amount of money spent by the government on healthcare and launched a New Health Policy, which emphasizes the role of private healthcare. This represented a shift away from the policy of the previous Congress government, which had supported programs to assist public health goals, including reducing child and maternal mortality rates. Modi also launched the Clean India campaign (2014) to eliminate open defecation and manual scavenging. As part of the program, the Indian government began constructing millions of toilets in rural areas and encouraging people to use them. The government also announced plans to build new sewage treatment plants.

Notable Indian exports include refined petroleum oils, diamonds, gold, jewelry of precious metal, rice, and cars.

India Exports by Product (2014) from Harvard Atlas of Economic Complexity. Modi’s reformist approach has made him very popular with the public. At the end of his first year in office, he received an overall approval rating of 87% in a Pew Research poll, with 68% of people rating him “very favorably” and 93% approving of his government. At the end of his second year in office, an updated Pew Research poll showed Modi continued to receive high overall approval ratings of 81%, with 57% of those polled rating him “very favorably.”

In naming his cabinet, Modi renamed the Ministry of Environment and Forests the Ministry of Environment, Forests, and Climate Change. In the first budget of the government, the money allotted to this ministry was reduced by more than 50%. The new ministry also removed or diluted a number of laws related to environmental protection. These included no longer requiring clearance from the National Board for Wildlife for projects close to protected areas and allowing certain projects to proceed before environmental clearance was received. Modi also relaxed or abolished a number of other environmental regulations, particularly those related to industrial activity. A government committee stated that the existing system only created corruption and that the government should instead rely on the owners of industries to voluntarily inform the government about the pollution they were creating. In addition, Modi lifted a moratorium on new industrial activity in the most polluted areas. The changes were welcomed by businesspeople, but criticized by environmentalists.

 

Challenges in 21st-Century India

Corruption has been one of the pervasive problems affecting India. In 2015, India was ranked 76th out of 168 countries in Transparency International’s Corruption Perceptions Index. The largest contributors to the corruption are social welfare programs and social spending schemes enacted by the Indian government. The media have widely published allegations of corrupt Indian citizens stashing millions of rupees in Swiss banks. Swiss authorities, however, denied these allegations, which were subsequently proven in 2015-2016. The Indian media is mainly owned by corrupt politicians and industrialists who also play a major role in most of these scams, misleading public with wrong information and using media for mud-slinging their political and business opponents. The causes of corruption in India include excessive regulations; complicated tax and licensing systems; numerous government departments, each with opaque bureaucracy and discretionary powers; a monopoly of government-controlled institutions on certain goods and services, and the lack of transparent laws and processes.

Poverty in India continues to be a critical issue, despite having one of the fastest growing economies in the world. According to Global Wealth Report 2016 compiled by Credit Suisse Research Institute, India is the second most unequal country in the world with the top one percent of the population owning nearly 60% of the total wealth. Another urgent problem facing India’s economy is the sharp and growing regional variations among its different states and territories in terms of poverty, availability of infrastructure, and socio-economic development. Six low-income states – Assam, Chhattisgarh, Nagaland, Madhya Pradesh, Odisha, and Uttar Pradesh – are home to more than one-third of India’s population. Severe disparities exist among states in terms of income, literacy rates, life expectancy, and living conditions. Following Modi’s liberalization, the more advanced states have been better placed to benefit from reforms, with well-developed infrastructure and an educated and skilled workforce that attract the manufacturing and service sectors. There is a continuing debate on whether India’s economic expansion has been pro-poor or anti-poor. Studies suggest that the economic growth has been pro-poor and has reduced poverty in India although the statistics continue to paint a dire picture. According to the 2014 revised World Bank methodology, India had 179.6 million people below the poverty line, which means that with 17.5% of total world’s population, India had 20.6% share of world’s poor.

Women in India continue to face numerous problems, including violent victimization through rape, acid throwing, dowry killings, marital rape, and the forced prostitution of young girls. In 2012, the Thomson Reuters Foundation ranked India as the worst G20 country in which to be a woman. Although this report has faced criticism for inaccuracy, findings from the World Economic Forum have repeatedly indicated that India is one of the worst countries in the world in terms of gender inequality.

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