How will Narendra Modi change India?

The Bharatiya Janata Party's landslide victory in parliamentary elections has ended an era of shaky coalition governments in India. The desire for change among the country's youthful electorate after a slump in economic growth, years of policy drift and a spate of corruption scandals appears to have overridden concerns about Narendra Modi's pro-Hindu leanings and religious riots that occurred on his watch in Gujarat 12 years ago. There certainly is a significance of the power shift and what the world can expect from a Modi-led government.

About the secret behind success the BJP campaigners would say that they did everything right. Besides running a presidential-style campaign centred on Modi and his claims of good governance, the BJP made ample use of communalism and, for good measure, also underwrote it with caste. One cannot say that making use of the religious polarisation caused by the religious riots in western Uttar Pradesh was the right thing to do. But that is what the BJP did to divide the electorate on religious lines. The fielding of Modi from the Hindu holy city of Varanasi was aimed at religious polarisation which helped the party in eastern Uttar Pradesh and the adjoining areas of Bihar. Describing the predominantly Muslim town of Azamgarh as a "den of terrorists" by BJP's main campaign manager for Uttar Pradesh also served the same purpose. The BJP also played the caste factor in Uttar Pradesh. In short, the BJP used a complex set of campaign strategies, taking religion, caste and other local factors into account.

Given the massive majority that the BJP and its allies will command in parliament, the minorities are bound to be apprehensive of the huge mandate received by the Hindu nationalists. It is for the new government to reassure them of their safety and their access to justice as citizens of India who are not unequal to anyone. Any kind of triumphalism by the supporters of the BJP and other Hindu nationalists would increase the insecurity of the minorities. There is a risk of Modi being unwilling or unable to control the Hindu nationalist fringe of his party. He has no dearth of factional rivals.

But some maintain the view that a country as complex as India cannot be run through sheer majoritarian ideology, the sooner Modi realises it - if he hasn't already - the better it would be for him and his longevity as the new leader of India. Except for Sushma Swaraj, the last leader of the opposition in the Lower House of parliament, there is no one in the BJP who does not suffer from majoritarianism. She distanced herself from Modi after the 2002 communal riots in Gujarat and has not endorsed his leadership qualities.

So far as Kashmir is concerned Modi will not probably try to implement his party's long-standing position on abolishing Indian-administered Kashmir's special status in the near future, and it should not be on top of his agenda. To abolish the special status of Jammu and Kashmir, Article 370 of the Indian constitution would have to be abrogated. Any amendment to the constitution requires two-thirds majority in parliament. Modi does not have that luxury in either house of parliament. The BJP-led coalition is particularly badly placed in the Upper House (Rajya Sabha): it has only 64 seats in a house of 240. There are currently five vacancies and 12 more will arise this year. Even if the BJP and its allies were to win all these seats, they would still be short by a long shot of the half-way mark.

It is well known that Modi is unforgiving of his critics. The police officers and bureaucrats who investigated the Modi government's role in the 2002 killings of Muslims in Gujarat may have to worry about retribution. He has already punished and marginalised some of them. More misfortune could come their way.

Modi faces stupendous challenges on the economic front. Along with high investor expectations, he has favourable tailwind in terms of a recovering world economy, a rise in the stock-market indices and a strengthening rupee. Foreign and domestic investors have wagered heavily on a pro-business policy under a Modi-led government. Investors would want him to decontrol diesel and gas prices, continue with economic reforms, privatise state-run firms, address the question of subsidies on basic commodities, reform labour laws, increase the cap on foreign direct investment in the insurance sector from the current 26 per cent to 49 per cent, and address the issue of bad loans of banks which form 10 per cent of their total lending at present.

The buoyant market sentiment would allow more Indian companies to tap into the domestic and international markets with new equity issues. The renewed buying by foreign institutional investors in the Indian equity market has strengthened the rupee, which has both positive and negative consequences. Positive, because it will make imports cheaper and reduce the pressure on government finances due to the high cost of oil subsidies. And negative, because exporters will be up in arms as their earnings go down. Everybody will get definite indications of the direction of the Modi government's economic thinking when he presents a budget in late June or early July.

It does not seem easy to be replicated the so-called Gujarat model of efficient and investor-friendly administration across the country, as many voters seem to desire and the corporate houses who backed him would expect him to do so. They would be eyeing easy access to state-owned public resources - land, water, forests and mines - coming their way. Investors are bullish about him and not about the current state of the economy. They will all be betting on the future of the economy. Modi has promised "single-window clearances" for investors and he may move in that direction somewhat. One major issue has been environmental clearances for big projects. There, he may run into the courts and people's movements. The so-called Gujarat model focuses on growth and not on social-sector investments. Many of the latter are in the ambit of state governments and the BJP does not control all of them. States like Kerala, Tamil Nadu and Himachal Pradesh have done very well in terms of human-development indicators - that is, growth that goes hand in hand with the well-being of all. They will continue with these measures.

What Pakistan and Bangladesh as neighbours may expect from a Modi government? It is difficult to expect any constructive engagement with Pakistan - certainly not in the near future - unless it meets India's concerns about terrorism emanating from territory under its control. If anything, Modi's Pakistan policy would be more muscular and aggressive. Water-sharing through the Teesta River accord, exchange of enclaves, rationalisation of the international border and the question of illegal immigration may continue to mar relations with Bangladesh. Modi has been pretty aggressive on the issue of illegal Bangladeshi immigrants. On the Teesta River accord, he would need the co-operation of the government of West Bengal state, which may not be an easy task. His own party has opposed the rationalisation of the international border with Bangladesh as it involves some transfer of land from India to Bangladesh and vice-versa.

The US, Europe and wider Islamic world can do business with Modi. The US has already made overture towards him, although it was late to make up with him compared to the UK and Canada. With the West Asian countries, he would have an inherent "image" disadvantage. However, as this region is, and will continue to remain a major source of energy for India, Modi would want good relations with them. It is important to understand that Indian foreign policy is not going to be about "big bang" ideas. It has been more about continuity ever since the nuclear tests of 1998 under Prime Minister Atal Bihari Vajpayee, till the signing of the India-US nuclear deal under Prime Minister Manmohan Singh in 2006 and beyond. One would expect that to continue. In the ultimate analysis, India's foreign policy is not determined by the ideology of the government of the day or the personality of the prime minister. Though one cannot say that they have no impact at all either, but it cannot change the nature of India's permanent interests.

Not beyond any more than the normal tensions that occasionally flare up as far as religious strife is concerned are foreseeable in multi-religious India even if Modi delivers on his promise of growth and change and wins re-elections. The bigger problem is of inequality of access to social and economic opportunities, resources and justice. They will continue to get reflected in social strife unless aggressive corrective measures are taken. The Maoist insurgency would continue to threaten the country unless the needs of tribal communities are taken on board and governance in insurgency-affected and insurgency-prone areas is improved.

The writer is a retired Professor of Economics, BCS General Education Cadre.

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