41 / 54
India, Article:
Modi – Nomics: The Optimistic Case for the
World´s Third Largest Economy
By
Payden & Rygel,
Los Angeles, California, USA, Spring
2015,
Point of View, Our Perspective on Issues Affecting Global
Financial Markets
Narendra Modi, the son of a tea merchant, has quickly become one of the world’s
most talked-about leaders. But does he bring real change or is his election just
another fanciful Bollywood love story for the 1.2 billion Indians living in the
world’s third largest economy?
Nearing the end of his first year in office, Modi has cut bureaucratic inefficiency,
made steps toward putting India’s fiscal house in order, and advanced India’s
quest to become the next manufacturing hub of the world. While many of the
benefits may arrive years down the road, we are optimistic that the reform
momentum Modi personifies will thrust India forward and boost the country’s
economic growth prospects.
The Personification of Hope
Modi swept to victory with an election campaign analogous to American
President Barack Obama’s in 2008. Modi used Twitter hashtags, 3D hologram
appearances and catchy slogans to create the “Modi Wave,” which swept the
nation. Modi’s calls for economic growth through “minimum government and
maximum governance” resonated with young Indian voters.
Modi himself embodies the “Indian Dream.” He rose to fame during his ten years
as the Chief Minister (Governor) of Gujarat, the fourth largest Indian state (India
has 29 states) by gross domestic product (GDP). During his tenure he provided
24-hour electricity access–a rarity in India that made the state a darling for
industrialists. As a result, Gujarat grew 10% per year between 2004 and 2012,
well above the Indian average of 8.25%.1
Can he replicate his success in Gujarat for the rest of people of India?
Moving the Bureaucratic Behemoth
For decades India has been plagued by politicians who made election promises
to rein in bureaucracy and increase efficiency but failed to deliver.
Using his political capital and reputation of “CEO-style” leadership from his days
in Gujarat, Modi quickly inspired India’s notoriously inefficient bureaucrats to
IAFEI Quarterly | Issue 29 | 39