Posts tagged ‘BJP’


The Top 10 Misses of Narendra Modi’s First Year – India Real Time – WSJ

While Prime Minister Narendra Modi has had some major wins—including opening new sectors up to more foreign investment and raising India’s global profile as outlined in this accompanying post about Mr. Modi’s triumphs—he has also had some surprising losses.

Here are 10 that stood out:

Delhi Defeat: Mr. Modi’s Bharatiya Janata Party made big bets on the Delhi elections in February and lost almost every seat to the upstart Aam Aadmi Party. The small but high-profile local poll proved that the BJP was not invincible. Sambit Patra, a spokesman for the party admitted that the BJP had misread Delhi voters and has learned from its mistakes.

The War on Tax Terrorism: Mr. Modi came to power promising to stop the tax harassment of corporations. The decisions not to appeal tax cases against Vodafone Group PLC and Royal Dutch Shell PLC were a step in the right direction. Some foreign investors though were then slapped with huge surprise back tax bills making everyone question whether anything has changed. India’s ruling party has said it is working hard to clarify tax laws but it cannot erase cases that had been brought before they came to power.

Minority Concerns: While there has not been anything close to nationwide backlash against minority groups that many had feared, critics say the prime minister has not yet gone far enough to calm the concerns of minority communities. Some worry that people within the BJP and others with Hindu-nationalist leanings seem emboldened by the rise of Mr. Modi’s party, making them more likely to speak out and act out against Muslims, Christians and other non-Hindu communities. Mr. Modi has strongly condemned intolerance and reprimanded BJP members for controversial comments. The party says it represents all Indians and it cannot be responsible for every fringe group that makes trouble. “No one should be scared of anybody, the government supports every community,” said the BJP’s Mr. Patra.

No Big Bang: Two budgets down and still no sign of the big bang economic reforms optimists had expected from Mr. Modi. The changes he has promoted have been more incremental while attempts at some unpopular changes have been blocked in Parliament. He’s unveiled many promising campaigns to do everything from building more toilets and “smart cities” to promoting manufacturing and yoga. However, it’s too early to decide whether his campaigns represent a revolution in thinking or just rhetoric. The BJP spokesman said the party will continue to push for reform.

Paltry Profits: GDP growth has accelerated and inflation has plunged under Mr. Modi, but the Modi magic is not trickling down to the bottom line. For the fiscal year ended Mar. 31, many of India’s largest companies are expected to announce their weakest profit growth in more than five years.

Visa Glitches: On his many trips abroad, Prime Minister Modi expanded the number of countries eligible for so-called visa-on-arrival privileges. Travelers said the new visas ended up causing a lot of confusion forcing the government to rename them, more accurately, e-visas. There was a similar muddle about new rules combining the PIO and OCI visas held by people of Indian origin around the world. The change, which was meant to make it easier for people with Indian heritage to stay in India, ended up causing some angst about whether their right to remain was about to run out.

WTO Battle: One of Mr. Modi’s government’s first global moves was to reject a World Trade Organization agreement set in Bali. India had agreed to abide by the agreement before the BJP came to power but changed its mind, saying it needed more protection for its farmers. With few other countries backing its position, India eventually backed down. The Bali deal, which will simplify customs procedures world-wide, is now moving ahead; both India and the countries that pressured it to accept the agreement claim not to have blinked.

Crackdown: While Mr. Modi has been in charge, India has restricted funding of non-government organizations, including Greenpeace. It blocked the broadcasting of a BBC documentary about the 2012 gang rape of a woman on a Delhi bus. New Delhi also stopped Al-Jazeera from broadcasting in India for five days for mislabeling India’s disputed border with Pakistan.

Government officials said the government was not trying to silence critics. In the case of the non-government organization funding, officials said they were just enforcing foreign exchange laws. A court said the ban on the BBC documentary was to avoid law and order problems. Meanwhile the Al-Jazeera blackout was punishment for showing maps with “parts of Indian territory inside Pakistan,” an official of India’s Information and Broadcasting Ministry said at the time.

This Outfit: When the prime minister greeted U.S. President Barack Obama wearing this dapper suit in January, many applauded his bold choice of subliminal advertising; others called it an embarrassing display of gauche narcissism.

Mr. Modi hugs President Barack Obama while wearing a pinstripe suit with his name in the stitching. AFP/Getty

This Solo: As with most of his international trips, Mr. Modi was not shy about putting on the local attire during a recent visit to Mongolia. He should have considered ending his tryst with Mongolian culture at that though as his attempt at playing an instrument called the Yoochin—for more than two minutes—was painful to watch.

via The Top 10 Misses of Narendra Modi’s First Year – India Real Time – WSJ.


“Take money from BJP & Congress, but vote for AAP” – The Hindu

Aam Aadmi Party chief Arvind Kejriwal was on Sunday at the centre of a controversy when he asked voters in Delhi to take the money offered by the BJP and the Congress but “fool” them by voting for the AAP in the coming Delhi Assembly elections, drawing sharp criticism from both the parties.

Mr. Kejriwal asked voters to “fool” BJP and Congress by voting for AAP even after accepting the “bribe money” as the parties have been “fooling people for the last 65 years.”File photo

“It’s election time. When people from the BJP and the Congress come offering money, don’t refuse, accept … some have looted money from 2G, some have looted money from coal scam.”

“And if any party does not show up, go to its office and take the amount saying we were waiting but you didn’t come,” Mr. Kejriwal said amid cheers from the crowd.

The former Delhi Chief Minister was speaking at a rally in West Delhi’s Nawada area in support of the AAP’s Uttam Nagar candidate, Naresh Balyan.

“Take money from both the parties but vote for the AAP. We will fool them this time. They have been deceiving us for the last 65 years. Now it’s our turn,” he said.

The BJP lashed out at the AAP chief saying his comments amounted to questioning the authority of the Election Commission apart from being an affront to the voters.

“He is essentially saying that voters accept money and alcohol. His comments also mean that the EC is not working properly as money and alcohol are getting distributed,” BJP MP Meenakshi Lekhi said.

The Congress said the party would seek legal opinion to approach the EC against Mr. Kejriwal for “insulting” the people of Delhi.

“Making such statements is illegal. It is like offering money to the people,” said Ajay Maken, who is campaign committee chief of the Congress in Delhi.

via “Take money from BJP & Congress, but vote for AAP” – The Hindu.


Banyan: The enablers | The Economist

NOT since Indira Gandhi has a prime minister of India been as dominant as Narendra Modi. His clout comes from the big electoral victory in May of his Bharatiya Janata Party (BJP) after a remarkably personalised campaign; from a hyperactive prime minister’s office that makes Mr Modi look presidential; and from an opposition Congress party in tatters. But even the mightiest cannot rule alone, and Mr Modi relies on two old allies, both crucial. One, Amit Shah, engineers the electoral victories that give Mr Modi his authority. The other, Arun Jaitley, must take that authority and out of it craft policies and decisions that will launch the economic recovery which Mr Modi has promised and by which he will be judged. These two men are Mr Modi’s enablers.

Now the BJP’s president, Mr Shah is a master of the dark political arts—indeed, his hooded eyes give him the air of a pantomime villain. He has served Mr Modi for nearly three decades. The pair collaborated in the state of Gujarat, where Mr Modi won three elections and ruled for a dozen years. Mr Shah had charge of ten state ministries, including home affairs.

Long an outsider in the urbane circles of Delhi’s national-level politics, Mr Shah is uncomfortable in English and rarely gives interviews. When he makes an exception, as he did after state-assembly elections this month in which the BJP seized control of Maharashtra and Haryana, he mostly uses the time to extol his boss. Of himself, he says merely: “Sometimes you get more credit than you deserve.” Mr Shah is too modest. He ran both state campaigns, just as he crafted the BJP general-election success in India’s most populous state, Uttar Pradesh (UP). That victory was at the heart of Mr Modi’s national triumph in May.

Mr Modi stirs voters, but the alchemy of Mr Shah, who turned 50 this week, is to convert popularity into power. In UP the BJP’s share of the vote was 42%, compared with Congress’s 7.5%. That translated into 71 out of 80 of the national seats from the vast state, a golden return. Imbalances between vote share and seats are normal in first-past-the-post electoral systems, but achieving victory in India takes more skill and stamina than elsewhere. Mr Shah makes minute analyses of millions-strong constituencies, imposing candidates and recruiting volunteers early, often from the Hindu-nationalist RSS organisation, where he and Mr Modi were once leaders. He tailors messages according to the audience. He has, variously, presented Mr Modi as a bringer of good economic times, a Hindu strongman and a figure of humble caste. Mr Shah has turned Hindus against Muslims (notoriously, he told Hindu Jats in UP to take electoral “revenge” following communal riots in late 2013). But he has also taken advantage of Shia Muslim antipathy towards Sunnis (in Lucknow, UP’s capital). Mr Modi’s campaigning certainly helps. He led 38 rallies in the recent state elections. Congress’s Rahul Gandhi showed up for only ten.

via Banyan: The enablers | The Economist.


BJP Fares Poorly in By-Elections in India’s Most-Populous State – India Real Time – WSJ

The Bharatiya Janata Party’s landslide victory in national elections a few months ago spawned predictions of an unstoppable political juggernaut. But results of by-elections show cracks in the BJP’s dominance.

India’s governing party held onto only three of 11 seats that went to the polls for the legislative assembly of Uttar Pradesh, the country’s most-populous state. The BJP had won all these seats in the last state elections in 2012.

The regional Samajwadi Party, which governs the state but suffered a big blow in national elections, won the remaining eight seats, according to India’s Election Commission.

Just four months ago, the BJP won a historic 72 of 80 seats for the national Parliament from Uttar Pradesh on the back of a wave of support for Prime Minister Narendra Modi. This result helped propel the party to a majority in the lower house of Parliament, with 282 of 543 seats.

The magnitude of the win raised expectations that the BJP would come out on top in the by-polls, which are mid-term elections held for those seats that have fallen vacant since the previous election.

The results showed that while Mr. Modi had swung the national election by making it a presidential-style vote for or against his leadership, his charisma might not be enough to carry his party to power in state elections, where local issues and caste equations dominate the vote. It also raised questions about the BJP’s prospects in crucial upcoming state elections in Maharashtra and Haryana.

Some also saw the outcome as fallout from a polarizing BJP campaign that critics say sought to consolidate Hindu votes in Uttar Pradesh by spreading animosity against Muslims – and marked a return by the party, which has roots in India’s Hindu nationalist movement, to the religious agenda that defined its strategy a decade ago.

via BJP Fares Poorly in By-Elections in India’s Most-Populous State – India Real Time – WSJ.


Six ways in which Narendra Modi has changed Delhi


He’s undermined the hierarchy of the BJP, but bureaucrats are reporting to work on time.

Narendra Modi’s first hundred days in power may not have brought big bang economic reforms or sweeping social initiatives, but the shift in dynamics across political, bureaucratic and corporate circles has been huge. Except for the period of the Emergency four decades ago, which turned everything upside down, never have the customary power equations of Lutyens Delhi become so redundant.

1. The Bharatiya Janata Party
The biggest impact of Modi’s arrival at the seat of power has been on his own party. The Bharatiya Janata Party today is looking like a punctured balloon. This was one of the few remaining political outfits in the country that still routinely practiced internal debate. After Modi’s victory, the hush among the BJP leadership has been deafening. The party is under Modi’s thumb and is now feeling the pressure of Amit Shah’s palm as well. Apart from the overwhelming presence of these two leaders, no one is quite sure about the hierarchy in the party. Party members don’t know whom to approach for what, since everybody else seems so powerless. There is surprisingly little triumphalism or celebratory swagger among BJP leaders in the aftermath of such an astounding electoral victory.

2. The council of ministers
In the beginning there was some envy about those who got plum ministerial positions. But a few of them, such as power minister Piyush Goel, and environment and information minister Prakash Javdekar, were reported to have been ticked off like schoolboys. As a result, a ministerial post does not look so inviting anymore. Individual ministers have never before been so devoid of the powers to dispense favours. In the past, some politicians were able to wrangle such favours even if they were in opposition. The ministers are instead driven to work relentlessly from early in the morning to late in the night, driving teams of sleepless bureaucrats, some of whom appear to have more direct access to the prime minister’s office than their political superiors. The word out is that Big Brother is watching and any sign of laxity will not go unpunished.

3. Parliament
There also appears to a conscious decision by the new prime minister to bypass conventional parliamentary processes for policymaking. Standing committees are yet to be set up. Such is the apathy to parliament that even seat allotments to different parties in the new Lok Sabha are yet to begin. Clearly, Modi does not have much inclination for parliamentary debate and review to make policies.

4. The bureaucracy
Significant changes in the corridors of power are also evident. The bureaucracy, from top to bottom, is still struggling to cope with the drastic departure from the slow pace of government. Office hours are not only being imposed in terms of punctuality, but can also get extended indefinitely.

5. India Inc
The relationship between corporate groups and the Modi government in the first hundred days has belied fears, particularly of liberal-left opinion makers, that it would be a willing instrument for crony capitalists. So far this has not been the case. It has become increasingly clear that the country’s largest industrial magnate Mukesh Ambani, who was supposed to be one of the main moneybags to bankroll the Modi campaign, is not calling the shots. Even Gautam Adani, known to have been personally close to Modi when he was Gujarat chief minister, has not been patronised. Power minister Piyush Goel was said to have been pulled up for publicly hobnobbing with the industrialist whose power company was also slapped with a clear energy cess in the budget.

This is not to suggest that the new prime minister has turned his back on industrialists. He has had individual meetings with a number of them including Cyrus Mistry of the Tata group, Anil Agarwal of Vedanta and Anil Ambani, although mysteriously not the latter’s elder brother, Mukesh. The message so far has been clear. The new government was ready to consider all proposals as long as they fit into the regime’s scheme of things, but would not be manipulated through fear or inducement on specific projects or policies. Ever since the new government came to power, the vast army of corporate lobbyists in Lutyens Delhi have been sitting idle.

6. Sycophants and cheerleaders
Finally, the most striking difference between the Modi regime and previous ones, is the way the new prime minister has spurned a long queue of sycophants and cheerleaders who had expected to be rewarded for their services to the Modi campaign. Quite a few of them are in the media, or experts who are hoping to be accommodated in think tanks now that they have been overlooked for plum government posts. The impression, however, is that the prime minister is adamant about horses for courses, and will only elevate someone he feels will be able to do the job.

Those close to Modi have assiduously cultivated the image of a prime minister who has his party leaders by the scruff of its neck, the bureaucracy on tenterhooks and business magnates at an arms distance – “a tough guy who does not dance”.


Independence for Intelligence Bureau, tackling Maoism are Home Ministry’s biggest challenges

The Home Ministry is possibly the most crucial cabinet portfolio after the prime minister’s seat. Under Narendra Modi‘s leadership, veteran Bharatiya Janata Party stalwart Rajnath Singh bagged the coveted spot on Raisina Hill, an appointment that was widely predicted during post-poll speculation in the capital, New Delhi.

Singh played the part of Modi’s right-hand man for much of the former Gujarat chief minister’s gruelling campaign. But Singh did much more than help with Modi’s election trail; he was effectively Team Modi’s chief executive, managing the power games and personality clashes erupting in the party and, above all, placating the old guard’s resentment toward Modi’s popularity and apprehension about their status.

For many days after the BJP-led National Democratic Front swept the election, Singh said that he would be glad to continue as the party president and was not angling for a cabinet berth. Yet he got possibly the most important cabinet position, besides the prime minister’s, and accepted it with great alacrity.

But many people did advise him against moving to Raisina Hill’s North Block, where the ministry is located, and to stay on as the party president, a position they said was more powerful than a cabinet berth. But Singh has his own political ambitions and the cabinet berth certainly has greater national prestige.

Today, it’s unclear why exactly Modi’s right-hand man is in the government, especially after Singh’s outburst last week following reports that his son had been upbraided by the prime minister for allegedly accepting bribes in exchange for arranging police postings. The battle for that primacy is between Singh and Arun Jaitley, the finance minister who is doubling up as defence minister, both wily politicians who know how to navigate the BJP and its various spheres of influence.

via – News. Politics. Culture..


Wounded Congress desperately seeking alliances for upcoming assembly elections

The Congress party is losing legislators but is keen to show it remains a political force as polls approach in Maharashtra, Jharkhand, Haryana and Kashmir.

Still reeling from its decimation in the Lok Sabha elections, the Congress now has to contend with legislators in several states quitting the party to join the Bharatiya Janata Party. There are rumours that even veteran Delhi Congress leader Dr AK Walia is in talks to join the BJP.

What makes the situation worse is that members of legislative assemblies from regional parties are also joining the BJP, making it hard for the Congress to compete.

The party is now desperately looking to form alliances with regional parties and even independent MLAs to save face in the upcoming state elections in Maharashtra, Haryana, Jharkhand and Jammu and Kashmir.


With the Jharkhand Vikas Morcha deciding to merge with the BJP, it is becoming increasingly difficult for the Congress to establish any sort of stronghold in the state. The party’s general secretary in the state, BK Hariprasad, says it is looking to put together an alliance with the Rashtriya Janata Dal, with which it has already reached an agreement in Bihar. The party is also working on a tie-up with Janata Dal (United), which split with the BJP before the general elections.

The party already has an alliance with the Jharkhand Mukti Morcha. However, the district presidents in the region are not keen to continue with it, following the JMM’s demand that it be allocated 25-30 of the 81 seats in state polls due at the end of the year.

“The party has a stronghold in the state and it will perform much better if we contest on our own instead of seat sharing,” a district president of the Congress said. “The leadership should not concede to the demands of the regional alliances and deprive our own people of a chance to contest the polls.”

via – News. Politics. Culture..


Modi Targets Bureaucrats, Manufacturing and Toilets in Independence-Day Speech – India Real Time – WSJ

In his first Independence Day speech Friday, Indian Prime Minister Narendra Modi listed the issues he plans to focus on as the leader of the world’s largest democracy: bickering bureaucrats, women’s rights, manufacturing jobs, trash and toilets.

“You might say Independence Day is an opportunity to talk about big ideas and make big declarations. But sometimes, when these declarations are not fulfilled, they plunge society into disappointment,”said Mr. Modi, who is the South Asian nation’s first prime minister born after India gained independence from Britain 67 years ago. “That’s why I’m talking about things we can achieve in our time.”

Mr. Modi’s Bharatiya Janata Party was propelled to power by Indians who, hungry for better jobs and a higher standard of living, grew frustrated with slowing growth under the previous Congress-led government. Since coming to power in May, Mr. Modi has made some cautious policy moves, disappointing some of his supporters who had expected immediate and bold change from his administration.

Addressing the nation from the ramparts of New Delhi’s regal Red Fort Friday, Mr. Modi said he plans to set the government in order and stop bureaucratic squabbling, underlining his focus on administrative processes rather than economic overhauls. As “an outsider” to New Delhi, he said, he has been shocked since taking office to find that “there were dozens of governments inside the government,” each with “its own fiefdom.”

“Departments are fighting each other, suing each other in the Supreme Court,” Mr. Modi said. “How can they move the country forward?”

In his nearly hour-long speech delivered largely in Hindi, Mr. Modi reiterated his focus on making India a global manufacturing hub and export powerhouse.

Offering a new slogan in English, “Come, make in India,” Mr. Modi invited the world to come to India to manufacture.

“Sell anywhere in the world but make it here,” he said. “Electricals to electronics, chemicals to pharmaceuticals, automobiles to agro-products, paper or plastic, satellites or submarines — Come, make in India.”

Mr. Modi questioned why India needs to import “every little thing,” and urged the country’s youth to open factories and export goods.

Manufacturing makes up only around 15% of India’s gross domestic product as most of its rapid expansion over the last decades has come from the service sector. During spring elections the BJP said it planned to create millions of new jobs if elected. Economists say one of the best ways India can generate employment is through exports.

While India’s labor costs are among the lowest in the world, it has consistently failed to become an export powerhouse like China and Asia’s other largest economies.

Prime Minister Modi also announced initiatives aimed at modernizing India: a nationwide drive for cleanliness that would boost tourism, a program for parliamentarians to transform villages, one by one, into “model villages,” encouraging politicians and companies to build more toilets so people don’t have to use the outdoors and a push to open bank accounts for all Indians.

Mr. Modi also used his speech to address an issue the new opposition has been demanding discussion on: religious violence. A Hindu nationalist leader accused of not doing enough to stop communal violence in the state of Gujarat in 2002 when he was chief minister there, Mr. Modi Friday urged Indians to stop communal fighting. Just this week, opposition parties accused the BJP of polarizing Indians on religious lines and analysts have blamed Mr. Modi of not addressing recent tensions.

“Who benefits from this poison of communalism? It is an impediment to growth,” Mr. Modi said. “Let us choose peace instead and see how it propels our nation forward.”

via Modi Targets Bureaucrats, Manufacturing and Toilets in Independence-Day Speech – India Real Time – WSJ.


The BJP’s real opposition turns out to be a far-Left-far-Right combination

When the final results of the general election were tallied up, it was hard not to marvel at the sheer size of the Bharatiya Janata Party’s victory and the unprecedented defeated delivered to the Indian National Congress. With the BJP emerging not just as the single largest party but also the first since 1984 to cross the halfway mark by itself and the Congress not even having enough seats to automatically be given the Leader of the Opposition post, there were genuine concerns about unbridled majoritarianism. Where would the opposition to the BJP come from?

Since the Congress continues to occupy the muddled middle and has pinned all its hopes on  Rajya Sabha numbers, where it has more seats than the BJP, the answer actually turns out to be an unusual combination of players both to the right and the left of the BJP. From labour law reform to the introduction of further foreign direct investment in insurance, it is BJP-affiliated organisations making common cause with pro-labour and Leftist outfits that have caused the most headaches for the new government.

With the Left and Right managing to converge on swadeshi issues, those who fall more in the pro-market camp within the BJP — many of whom were seen as the intellectual leaders of the campaign that brought Prime Minister Narendra Modi to power — are starting to get disconcerted with  government’s actions.

FDI in insurance

This appears to be the new government’s first big legislative battle, as the opposition parties have attempted to use their superior numbers in the Rajya Sabha to stand in the way of an attempt to increase the foreign direct investment cap in insurance from 26% to 49%. The government can resort to a joint sitting of the houses to bulldoze its legislation through the Parliament, but it is the reaction from trade unions and state insurance companies that has got the BJP concerned.

Crucially, the Bharatiya Mazdoor Sangh, the BJP-affiliated organisation that counts itself as the largest centrally organised trade union in the country, has joined forces with an array of other labour organisations as well as employees of state insurance corporations in threatening to strike if the cap is raised. The communist parties have always been staunch opponents of additional foreign investment. They have now come together with outfits like the BMS to prevent a move that finance minister Arun Jaitley has said is crucial to help reinvigorate economic activity.

Genetically modified crops

Shortly after representatives of the Swadeshi Jagran Manch and the Bharatiya Kisan Sangh met with environment minister Prakash Javadekar, he announced that the government was putting field trials of the genetically modified crops on hold. The news prompted loud howls from many who believe GM crops are important for Indian agriculture to take its next step forward. But it was welcomed by both the Sangh Parivar organisations that had met Javadekar as well as by many on the Left who have sought to halt GM crops for years now.

Swadeshi education

The Akhil Bharatiya Vidya Parishad, the BJP’s Youth Wing, sensed during last year’s Delhi University Student Union elections that opposition to the new Four Year Undergraduate Programme could be a key plank in remaining popular on campus. Incidentally, the FYUP had been opposed by the more left-wing organisations on campus from the very get-go, so the ABVP joined up with them to call for a roll-back of the four-year programme. The agitation quickly became a national issue, and eventually the FYUP was rolled back.

This ABVP-Left combine has now re-emerged in the agitation against the Union Public Service Commission’s Common Scholastic Aptitude Test, which is being fought on grounds that it is biased towards urban students. Yet again, the combined forces have managed to extract a concession from the government — despite opposition from the more reformist sections of the BJP.

Labour law reforms

Trade unions from across the country are meeting this week to try and decide how to approach the issue of labour law reforms, after the Rajasthan government last month passed legislation that made it easier for companies to retrench employees. These unions include both those on the Left, including the Communist Party of India (Marxist)-backed Centre of Indian Trade Unions  as well as the BJP-affiliated Bharatiya Mazdoor Sangh. Any decision to strike or launch a nationwide campaign by these groups could have a significant impact on a government that has insisted it is working primarily for the poor.

Foreign relations

The Modi government’s decision to vote against Israel at a United Nations forum shocked many supporters, who believe that India must be stand with Tel Aviv and remain steadfast against Islamic terrorism. It came as a pleasant surprise to those on the Left, however, who have always pushed India to speak up for those who live under Israeli occupation in Gaza and the West Bank.

The foreign relations convergence of the Left and Right was given a bigger boost after the Modi government decided to stand in the way of the World Trade Organisation’s Bali Package. Although the two factions here are unlikely to work together in pressuring the government to make decisions, particularly in the neighbourhood, the pressure to keep India relatively insulated from the West is likely to gain purchase from both sides.

via – News. Politics. Culture..


Insurance Bill Struggle Pokes Another Hole in the Notion of Modi Magic – India Real Time – WSJ

The new government in New Delhi is struggling this week to get an insurance-industry liberalization bill— an important part of its campaign to revamp the economy—to the floor of the upper house of Parliament.

Opening up the insurance business to more foreign investment was one of the main deregulation measures unveiled in Prime Minister Narendra Modi’s first budget last month.

But already it is bogged down. Mr. Modi’s Bharatiya Janata Party does not control the upper house and other parties want to stall a vote on the bill.

The legislative tussle is a sign of the challenges Mr. Modi faces, despite his party’s landslide electoral victory and the BJP’s lower-house majority, as he tries to push through even modest changes in the way India manages its economy.

Mr. Modi swept to power this spring on a surge of anti-incumbency sentiment and hope that the BJP could break the policy deadlock in the capital. Supporters expected Mr. Modi bring the “achche din,” or good days, back to Asia’s third-largest economy.

But India’s complicated national politics, its decentralized federal system and Mr. Modi’s own desire not to get too far ahead of public opinion in a country long used to large-scale welfare schemes and a heavy state hand in the economy, is likely to slow any change.

The new administration’s national budget, announced in July, was bland and disappointing to many. It did not include the kind of big-bang reforms many optimists had anticipated.

In response to criticism of the budget, India’s new Finance Minister Arun Jaitley told a television news channel that the government is waiting for the right time to implement some changes.

“You don’t do reforms in a manner that the political system is unwilling to accept them,” Mr. Jaitley said during a July interview on Headlines Today. “The more challenging ones, you go on that course in times to come.”

Last week, Mr. Modi’s government blocked an important trade agreement that all 160 members of the World Trade Organization—including India—had agreed to in December. India demanding more freedom ratchet up market-distorting food subsidies.

“This is an inauspicious start for the new Modi government,” said Orrin Hatch, a Republican U.S. senator from Utah and member of the Senate Finance Committee in response to India’s decision.

M. J. Akbar, a BJP spokesman, says the party is happy with its progress. He said the government has focused on dealing with inflation, encouraging growth and reaching out to neighboring countries.

“On the insurance bill, the government has shown complete firmness in pushing it through,” and will use a joint-session of Parliament to vote on it if the upper house refuses, he said.

Still, the gradual deflation of the Modi bubble can be seen in the stock and currency markets. The benchmark Sensex index, has basically been going sideways for the last two months, after a sharp run up as the scale of Mr. Modi’s election win became clear.

The rupee has also been giving up some of this year’s gains against the dollar.

Of course the less excitable analysts and executives have always said the complexity of running the world’s largest democracy means that decision making will remain a slow and often painful process, even with a majority in the lower house of Parliament.

Many of the biggest challenges to improving the lives for India’s 1.2 billion citizens—such as reducing corruption, building modern infrastructure and providing hundreds of millions of good jobs–will take years, if not decades, surmount, even with the right policies and a charismatic leader.

“If a handful of people decide that (the progress so far) is insufficient, we have to ignore them and recognize that the majority of India is both relieved that the return of governance as well as the return of hope,” said the BJP’s Mr. Akbar. “Files are being cleared after ages of stagnation.”

–Prasanta Sahu contributed to this story.

via Insurance Bill Struggle Pokes Another Hole in the Notion of Modi Magic – India Real Time – WSJ.

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