Posts tagged ‘Gujarat’

18/09/2014

Trade, investment hopes as China’s Xi visits India – Businessweek

Chinese President Xi Jinping landed in the Indian prime minister‘s home state of Gujarat on Wednesday for a three-day visit expected to focus on India’s need to improve worn out infrastructure and reduce its trade deficit.

Xi was greeted on the tarmac by state officials carrying fringed umbrellas to guard him from the sun in Gujarat’s main financial city of Ahmedabad.

Prime Minister Narendra Modi is expected to court Chinese business and seek investment to upgrade creaky infrastructure, banking on China’s track record at building highways, railways, and industrial zones. India is also eager to address the imbalance in their annual trade, which now totals around $65 billion but is skewed toward imports of Chinese electrical equipment and parts.

Modi and the Gujarat government are staging a lavish welcome for Xi, with billboards across Ahmedabad showing a smiling Modi and Xi. A banquet dinner was being held Wednesday night on the banks of the Sabarmati River in Ahmedabad. Modi was also celebrating his 64th birthday.

Xi has been equally effusive in expressing excitement for the visit.

China-India relations have become one of the most dynamic and promising bilateral relations in the 21st century,” Xi wrote in an article published Wednesday in The Hindu newspaper.

via Trade, investment hopes as China’s Xi visits India – Businessweek.

17/09/2014

5 Things to Look Out for During Xi Jinping’s Visit to India – WSJ

Manan Vatsyayana/Agence France-Presse/Getty Images

1 INFRASTRUCTURE

Prime Minister Narendra Modi is looking for foreign capital and expertise to build “smart cities”, high-speed trains and modern airports of the kind that China has built for itself in the past decade. The two leaders are expected to sign a deal to bring bullet trains to India and may also reach an agreement for the building of world-class railway stations and airports.

2 INDUSTRIAL PARKS

The two countries laid the groundwork for Chinese investment in industrial parks in India when Indian Vice-President Hamid Ansari visited Beijing in June. Indian officials say they expect to ink deals worth $5 billion for two parks – one in the western state of Gujarat, Mr. Modi’s home state, and the other in Maharashtra. The idea is to make it easier for Chinese companies to set up shop in India.

3 BORDER TROUBLES

Territorial disputes that have long dogged Sino-Indian ties aren’t the focus of this visit, but are sure to come up. Two reports this week – one about an alleged incursion by Chinese troops in Ladakh and another about protests by Chinese civilians and troops against the construction of an Indian canal along the disputed border – have highlighted the unresolved issues. Even after 17 rounds of talks, no solution has emerged – don’t expect one during this visit either.

4 COMPETITION WITH JAPAN

Indian newspapers have been filled with anticipation about whether China will outdo its Asian rival, Japan, in promising investments for India. Earlier this month, Japan pledged to pour $35 billion into India over five years; China is expected to go further. Expect reams of analysis of Mr. Xi’s rapport with Mr. Modi. When Japanese Premier Shinzo Abe met Mr. Modi, they bear hugged.

5 BREAKING OUT OF THE MOLD

Officials have raised hopes of a “directional change” and an “orbital jump” in Sino-Indian ties, which have long been bogged down by bureaucratic mistrust. Trade relations have flourished in the past decade, but are skewed in China’s favor– and investments have remained very low. Experts are hoping Mr. Modi – who worked with Chinese as chief minister of Gujarat – will adopt a pragmatic approach to push for Chinese money. If he succeeds, the visit may set the stage for an era of economic collaboration between the two Asian giants.

via 5 Things to Look Out for During Xi Jinping’s Visit to India – WSJ.

18/08/2014

Modi Sends India’s Soviet-Inspired Planning Commission Packing – India Real Time – WSJ

India’s prime minister used his inaugural Independence Day speech last Friday to cut off an arm of the country’s government that dates back nearly all the way to independence: the powerful, unloved and sometimes irrelevant-seeming Planning Commission.

The body was the creation of Jawaharlal Nehru, India’s first prime minister, who took from the experience of Japan and the Soviet Union the lesson that late-industrializing countries needed to use state intervention to transform their economies from the “commanding heights.” In the words of the 1950 cabinet resolution that created the commission: “The need for comprehensive planning based on a careful appraisal of resources and on an objective analysis of all the relevant economic factors has become imperative.”

Narendra Modi said on Friday that India could do better. The new prime minister said circumstances had changed since the commission’s creation. He said the federal government wasn’t the only driver of economic growth, and that state governments needed to be empowered to innovate. He promised the creation of a new institution that would serve as a platform for exchanging economic-policy ideas within government.

The announcement wasn’t unforeseen. The prime minister serves ex officio as the Planning Commission’s chairman. But Mr. Modi had spent his first months in office leaving the commission’s other full-time seats conspicuously unfilled. As a former chief minister of the western state of Gujarat, Mr. Modi was said at the time of his election this spring to have a strong interest in giving state governments more space to set budget priorities.

Killing the Planning Commission won’t entirely decentralize government spending in India. Federal tax revenue, according to the country’s constitution, is first distributed between the central and state governments by the Finance Commission. The Planning Commission then allocates spending to states along lines laid out in its Five-Year Plan for the economy.

That’s how it’s supposed to work, at least. Critics have accused the Planning Commission of gradually usurping the Finance Commission’s role as chief arbiter between the federal and state governments, all in the service of Five-Year Plans that are meticulously crafted but rarely achieved. The current plan, which covers 2012 to 2017, runs to three volumes and more than 1,000 pages. It covers all and sundry from boosting the manufacturing sector and increasing female literacy to promoting sports medicine and modernizing the powerloom sector.

The Five-Year Plans pervade policy making in India, at least in name if not always in effect. All federal expenditure is classified as either “plan” or “non-plan,” depending on whether it is undertaken in pursuit of the current Five-Year Plan. The Planning Commission occupies a monolithic grayish structure in New Delhi—Yojana Bhawan, or “Planning House”—just down the road from Parliament.

via Modi Sends India’s Soviet-Inspired Planning Commission Packing – India Real Time – WSJ.

15/08/2014

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.

03/07/2014

Keys to Successful Reform in India – India Real Time – WSJ

India’s new Prime Minister, Narendra Modi, won a decisive mandate from an electorate yearning for effective leadership. His government’s first budget due out next week will be an important indicator of how forcefully Mr. Modi intends to translate this mandate into actions to put India’s economy back on track.

Of course, despite his clear mandate, Mr. Modi will not have a free hand to impose reforms by decree. He is constrained by a democratic system of government and accountability to the electorate. Hence, both the strategy and the specifics of reform will be crucial to making the program a success.

A key priority is to signal greater fiscal discipline. High levels of public deficits and debt, exacerbated by wasteful subsidies and an inefficient tax system, have created many market distortions and contributed to high inflation. Populist sops have also reduced resources available for expenditure on infrastructure, education and other areas that could boost long-term productivity.

 

The government needs to commit to long-term fiscal discipline. It should move aggressively to reduce fuel subsidies, implement a goods and services tax, and step up the pace of privatization of state enterprises. These measures would not only improve the fiscal position of the government but also enhance overall economic efficiency by shifting the focus away from purely redistributive policies.

It will also be helpful to signal that the government will not look for easy targets, such as foreign firms, to raise revenues by changing the rules whenever convenient. Policy certainty is as important for domestic investors as it is for foreign ones.

via Keys to Successful Reform in India – India Real Time – WSJ.

23/05/2014

Will New Delhi Be Able to Translate Modi’s Gujarati Guidelines? – India Real Time – WSJ

As India waits for prime minister-designate Narendra Modi to take charge in New Delhi, many are wondering whether he can reproduce the policies that powered growth in his home state of Gujarat.

While the western state has long been one the richer states in the country thanks to a populace packed with entrepreneurs, it prospered even more than usual under Mr. Modi’s rule as chief minister for more than a decade.

Companies say with his leadership the state has cut corruption and restrictions on doing business. Meanwhile its networks of roads, ports and power plants are among the best in India and have even convinced some companies to move operations from other states to Mr. Modi’s vibrant Gujarat.

“He is a very good administrator and he will try to replicate the same model he had in Gujarat at the national level,” said Gautam Singh, an economist at Spark Capital.

The source of power behind Mr. Modi’s magic is debatable but most agree it comes from his ability to simplify government and set deadlines as well as his facility to push through unpopular policies.

Like he did in Gujarat, he is expected to streamline the number of departments and different ministries to make his entourage of key policymakers more nimble and powerful. In New Delhi, Mr. Modi will likely combine related ministries such as coal, renewable energy and petroleum for better policy implementation, said Mr. Singh.

One of the biggest successes of Mr. Modi was in energy, which has made Gujarat one of the few states in India with a power surplus.

Across India, power companies are often forced to give away power and depend on massive state subsidies. They are also hurt by theft during transmission and distribution. With little incentive or money to expand, the power generating and distributing companies have failed to keep up with demand. The resulting frequent power interruptions force other companies to set up their own expensive, captive power-generating units.

Gujarat has been able to cut power subsidies where many states haven’t been able to muster the political will to do so. It separated the power supply lines for households and farmers, helping target power subsidies. This meant non-agricultural users had to pay higher tariffs but they received a more reliable power supply.

While Mr. Modi was in charge, Gujarat took steps to ease India’s ridiculously restrictive labor laws which make it difficult for larger companies to hire and fire people as they please. Gujarat used its own version of special economic zones to promote industry. In these zones companies were given more freedom to adjust their workforces depending on demand.

One Goldman study suggests that if a similar easing were to be applied across India, 40 million jobs would be created in the next ten years.

Land acquisition is another perennial problem for companies as well as local governments as they look for spots to build facilities and infrastructure. While businesses wanting to set up operations in most states have to go through tedious procedures to get land, Gujarat has been able to significantly cut down on the red-tape by building a huge land bank that was earmarked for setting up industrial units. A recent study by Accenture to identify best practices in different states showed Gujarat’s policies were indeed helping. It now takes just 45 days for applicants to get possession of land in the state, the study showed.

via Will New Delhi Be Able to Translate Modi’s Gujarati Guidelines? – India Real Time – WSJ.

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17/05/2014

India’s Modi gets hero’s welcome as he brings new era to New Delhi | Reuters

Hundreds of Indians thronged the leafy streets of New Delhi on Saturday to greet Narendra Modi‘s triumphant march into the capital after he decimated the Nehru-Gandhi dynasty and the ruling Congress party in the biggest election victory the country has seen in 30 years.

Hindu nationalist Narendra Modi, the prime ministerial candidate for India's Bharatiya Janata Party (BJP), gestures towards his supporters from his car during a road show upon his arrival at the airport in New Delhi May 17, 2014. REUTERS/Adnan Abidi

Modi leaned far out of his car, waving a victory sign to jubilant supporters, in a drive from the airport to the headquarters of his Bharatiya Janata Party (BJP) in the center of town.

A Hindu nationalist who critics fear will be divisive and autocratic, Modi toned down religious issues in his pitch to India’s 815 million voters and won the world’s biggest ever election with promises of economic development for all.

The three-times chief minister of the western state of Gujarat is an outsider to Delhi’s power circle. The low-caste son of a tea stall-owner, his rise to power signals the end of an era dominated by the descendants of India’s first prime minister, independence hero Jawaharlal Nehru.

“Four to five generations have been wasted since 1952, this victory has been achieved after that,” Modi said, in a jibe at the Nehru-Gandhi family and the Congress it dominates.

Describing himself as a “worker”, he hailed grass-roots campaigners who showered him with pink rose petals as he arrived at party headquarters. There he met other party leaders and was expected to start discussions about forming a cabinet. Modi will not formally take office until after Tuesday, the party said.

Modi has given India its first parliamentary majority after 25 years of coalition governments, with his party winning more than six times the seats garnered by Congress.

With almost all 543 seats declared by Saturday morning, Modi’s BJP looked set to win 282 seats, 10 more than the majority required to rule. With its allied parties, it was heading for a comfortable tally of around 337 – the clearest result since the 1984 assassination of prime minister Indira Gandhi propelled her son Rajiv to office.

During the campaign Modi was explicit about wanting to end the dominance of the Nehru-Gandhi family on Indian politics. He may have achieved the goal, with Congress reduced to just 44 seats, less than half of its previous worst showing.

Modi’s landslide win gives him ample room to advance reforms started 23 years ago by current Prime Minister Manmohan Singh but which have stalled in recent years.

Despite his party’s pasting, 81-year-old Singh was magnanimous in his final address to the nation on Saturday, wishing the incoming government success. Later, he tendered his resignation.

“I am confident about the future of India,” he said in his televised message. “I firmly believe that the emergence of India as a major powerhouse of the evolving global economy is an idea whose time has come.”

Unlike Singh and his predecessors, Modi will not have to deal with unruly partners to implement reform. That could usher in profound economic changes, with some supporters imagining him as India’s answer to former British leader Margaret Thatcher.

via India’s Modi gets hero’s welcome as he brings new era to New Delhi | Reuters.

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08/05/2014

Four Reasons Why Narendra Modi Makes Some Indians Nervous – Businessweek

The question always comes up in New Delhi these days, somewhere between polite introductions and drinks: What would the reign of Narendra Modi, who seems increasingly likely to be the next prime minister, mean for India?

BJP candidate Narendra Modi addresses an election rally on April 10 at Gopal Maidan in Jamshedpur, India

One man, pro-business and a glass of whiskey in hand at the club, told me recently that Modi and his Hindu nationalist Bharatiya Janata Party (BJP) will bring needed centralization to a government that at times seems unable to impose its writ. Another—a highly educated liberal in socks, slacks, and polo shirt on the sofa just before lunch—wondered aloud whether the nation is forsaking its secular mooring for a dangerous populist.

Prediction in politics, especially in a nation as large and complex as India, is bound to be wrong much of the time. But public remarks by BJP officials and conservative Hindus apparently taking note of political winds are worth considering. (To be sure, there have been sharp words from both sides. For example, video surfaced of a candidate from the ruling Congress Party saying that he would “chop” Modi into tiny pieces.) Beneath the back and forth of explanation and disavowal, the consistency and vehemence of the messaging suggest an approach that, in a nation with a history of sectarian bloodshed, has some worried:

1. A conservative Hindu politician told a crowd that there are ways to discourage Muslims from purchasing property in Hindu neighborhoods. According to one account, Pravin Togadia allegedly met with protestors outside a home owned by a Muslim businessman and gave the occupant 48 hours to vacate the house. Togadia advised his audience to use stones, tires, and tomatoes, according to the Times of India. Togadia disputed that version of events and claimed through an online post that he was only offering advice on using the legal and governmental channels “if they felt that they are being forced into any selling of their houses.” (The newspaper subsequently said it has video confirming the initial report.)

The anecdote takes on broader significance for two reasons: The incident occurred in the western state of Gujarat, where some 1,000 people, mostly Muslim, were killed in brutal riots that included death-by-sword in 2002. The chief minister of Gujarat at the time of that bloodshed, as is still the case, was Narendra Modi. But as ever in Indian politics, there are caveats: A Supreme Court-appointed panel found no evidence that Modi’s decisions prevented the 2002 riot victims from receiving help. While Modi and Togadia have a shared background in Hindu nationalist politics, the two men do not now get along well.

2. A BJP parliament candidate informed a rally that those who do not support Modi will soon have no place in India. With senior BJP leadership standing by, Giriraj Singh said that Pakistan, the Muslim nation to the west, is where such people belong. BJP officials were quick to publicly express displeasure with Singh’s remarks, but he did not back down: “I stand by my statement that those trying their best to stop Modi from coming to power have no place in India and should go to Pakistan.”

3. A senior Modi aide was accused of telling voters they could get revenge by voting for Modi. Amit Shah was speaking in a north India district earlier this month near the site of riots last year that included murder and reports of gang rape. One account described how a “crowd of Hindu men came brandishing guns, swords and machetes, shouting that Muslims should go either to Pakistan or Kabristan (graveyard).”

4. Modi has signaled his desire to distance his campaign from militant sentiment and focus on shared national goals. As he tweeted on Tuesday:

I disapprove any such irresponsible statement & appeal to those making them to kindly refrain from doing so.

Petty statements by those claiming to be BJP’s well wishers are deviating the campaign from the issues of development & good governance.

However, many still point to his remarks during an interview with Reuters last year about the 2002 riots:

“Another thing, any person if we are driving a car, we are a driver, and someone else is driving a car and we’re sitting behind, even then if a puppy comes under the wheel, will it be painful or not? Of course it is. If I’m a chief minister or not, I’m a human being. If something bad happens anywhere, it is natural to be sad.”

There was an expression of sadness in those words. And there was, too, the unavoidable fact that he’d compared the dead to dogs.

via Four Reasons Why Narendra Modi Makes Some Indians Nervous – Businessweek.

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24/04/2014

Mumbai Shop Owners: Cut Taxes and Tame Corruption, Please – India Real Time – WSJ

As Mumbai’s traders hit the polls Thursday, many said they voted in favor of lower taxes and against corruption. High income and sales tax, import duty and rising prices have made it tougher to do business, many shop owners said.

Chetan Pishtoi at his plywood store, Sagar Ply, in South Mumbai. Shanoor Seervai/The Wall Street Journal

“In the past, I voted for the Congress,” says Chetan Pishtoi, a plywood-shop owner at Colaba market in South Mumbai, referring to the political party that currently leads India’s national government. “But now my eyes have opened. I see what [Narendra] Modi has done in Gujarat. If he wins, maybe he will do the same for India,” says Mr. Pishtoi, 30 years old.

Mr. Modi, the prime ministerial candidate of the rival Bharatiya Janata Party, is campaigning on the economic strength of the western state of Gujarat, where he is chief minister.

Mr. Pishtoi says food prices rose so much in recent years that he had to give his employees raises. “The public in Mumbai are sleeping hungry and the government hasn’t done anything about it,” Mr. Pishtoi says. Tomatoes and onions, he says, are priced beyond the reach of many.

Raju Lalwani at his men’s clothing store in Mumbai. Shanoor Seervai/The Wall Street Journal

Raju Lalwani, who runs a men’s clothes store, is also concerned about inflation. “Cloth has become so expensive, and even the tailors charge too much for stitching,” Mr. Lalwani says. “If the political party changes, maybe business will improve.”

His shop, Lovely Silk Stores, has been a family-run business for three generations. But the 58-year-old says his children won’t inherit the business. His son is studying to be an accountant, and his daughter is in grade 12.

via Mumbai Shop Owners: Cut Taxes and Tame Corruption, Please – India Real Time – WSJ.

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11/04/2014

India Under Narendra Modi Could Be Japan’s Best Friend – Businessweek

The results of national elections in India, expected to be announced on May 12, could mean good news for Japan and not such good news for China. Narendra Modi, the leader of the Hindu nationalist opposition party, has long been a favorite of Japanese Prime Minister Shinzo Abe, who would like to foster military and economic ties with India. Modi, the front-runner in the contest to be India’s prime minister, and Abe also share an antagonism for China. Modi has criticized the government of Prime Minister Manmohan Singh for being too accommodating toward China and has pledged to take a tougher line on issues such as the border dispute between the two countries that has festered for decades.

A supporter of Narendra Modi dons a mask of the Hindu nationalist candidate

Abe has clashed with China in a dispute over the ownership of several islands in the East China Sea. When it comes to the Chinese, “the Japanese are extremely apprehensive,” says P.K. Ghosh, senior fellow at the Observer Research Foundation, a New Delhi think tank. “It doesn’t take a genius to say India can be the largest friend of the Japanese.”

Abe has long treated Modi as a kindred spirit. Even after the George W. Bush administration put Modi on a travel blacklist for his alleged role in the 2002 riots that killed about 1,100 people, mostly Muslims, in Gujarat state, Abe welcomed Modi to Japan. The Indian politician, who was exonerated by the Indian courts, visited in 2007 during Abe’s first term as prime minister and then again when Abe was opposition leader in 2012. “Japan has worked very hard to improve relations with India,” says retired Indian General Vinod Saighal, author of Revitalising Indian Democracy. With a Modi victory, he says, relations “will get a boost, certainly.”

via India Under Narendra Modi Could Be Japan’s Best Friend – Businessweek.

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