[Analytics] India’s wrong turns

India's Prime Minister Narendra Modi looks on at the ASEAN-India Summit on the sideline of the 35th ASEAN Summit in Bangkok, Thailand, 3 November 2019 (Photo: Reuters/Athit Perawongmetha). Sketched by the Pan Pacific Agency.

Article 14 of India’s constitution says that ‘[t]he State shall not deny to any person equality before the law or equal protection of laws within the territory of India’. Yet earlier this month India’s parliament passed legislation that identifies religion a basis for a fast-track to Indian citizenship for minorities from neighbouring countries, East Asia Forum reported.

Muslims need not apply. This might seem innocuous enough. But apart from undermining the founding principles of India’s proud constitution — in contrast with the non-secular Islamic Republic of Pakistan next door — it defeats the purpose of any change designed to help oppressed minorities and is a calculated insult to India’s 200 million Muslims.

India’s Prime Minister Narendra Modi looks on at the ASEAN-India Summit on the sideline of the 35th ASEAN Summit in Bangkok, Thailand, 3 November 2019 (Photo: Reuters/Athit Perawongmetha).

Welcome to the priorities of Prime Minister Narendra Modi’s India.

As the Indian economy continues to tank due to the self-inflicted wounds of inept economic policy, its leadership is ever more preoccupied with pandering to its Hindu nationalist base. Boosted by Modi’s election successes with the prospect of economic opening and reform, India has collapsed from being one of the world’s fastest growing economies to risking being a developing economy also-ran. Growth has plummeted to its lowest rate in more than six years.

Forget all the Indian boosterism both inside and outside the country, the Modi government has failed to grasp the strategic chance for economic reform, fumbled the execution of the reforms it’s tried to undertake — witness the demonetisation and consumption tax disasters — and tinkered at the edges with others. The numbers say it all. If India’s per capita GDP grew at 7 per cent a year (its average growth over the past two decades), it would just about catch up to the per capita levels of China today by 2030. Growth this year is heading south of 5 per cent.

Prime Minister Modi stepped back from the future when he rejected the massive deal to open up to liberalisation in Asia through not signing onto the Regional Comprehensive Economic Partnership (RCEP) agreement in Bangkok in November. India’s Look East and Act East policies have come to nought. The nationalist and protectionist political sentiment overwhelmed the good sense of India’s negotiators in RCEP at Bangkok. India once more appears to be an international trade agreement spoiler with an unerring instinct for self-harm.

India’s economy sorely needs the boost that RCEP-stimulated reforms would give to long-term growth, employment for a bulging workforce and poverty alleviation. Such Indian wrong-calls have continued to condemn India (and South Asia that it dominates) to economic welfare indicators just a small fraction of those of East Asia — South Asia has just 2.7 per cent of global trade compared with East Asia’s 30.1 per cent, 2.2 per cent of global foreign investment compared with East Asia’s 48.1 per cent, and 4.0 per cent of global GDP compared with East Asia’s 30.2 per cent, while they account for 23.9 per cent and 30.7 per cent of the global population respectively.

How can the Modi government’s failure to capitalise on the chance its massive electoral success opened up for big reform be understood?

This has been a time of ‘living triumphally for India’s Bharatiya Janata Party (BJP) and its Hindu-chauvinist support group, the Rashtriya Swayamsevak Sangh (RSS)’, says Robin Jeffrey in our lead essay this week. ‘Decisive action’ Jeffrey says, was the catch cry of the BJP’s torrential communications strategy. But decisive action to what end?

Remember during the election campaign, Modi trumpeted a ‘surgical strike’ in February 2019 by India’s air force on terrorists in Pakistan after the killing of more than 40 Indian paramilitary police in a suicide bombing in Kashmir. Some may have been sceptical but many voters lapped up a tale of bold decision-making and retaliation.

There was relentless promotion of a grab bag of achievements.

‘The revised Goods and Services Tax was expected to streamline internal trade and revenue collection. A report on a New Education Policy promised a revamp of the entire education system. A scheme to provide poor rural households with bottled gas for cooking freed women from noxious fumes and time-consuming fuel gathering. The government also proclaimed success for its Clean India public sanitation campaign launched in 2014. A national health program held out the hope of affordable medical care for all. The courts, educational institutions, the banking system and the police increasingly reflected the ‘Hindu values’ of the ruling party and its zealous supporters. A National Register of Citizens promised to identify and root out non-Indians, especially Muslims’, Jeffrey reports.

And now there is the Citizenship Amendment Act.

‘Political fortunes in India can fall fast’, notes Jeffrey. ‘What’s different now is that neither Indira nor Rajiv Gandhi could call on the millions of believers and workers that the RSS can command. Nor was the zeitgeist flowing, as it does today, in favour of chauvinist movements peddling simple, mythologising appeals through the power of digital technology’.

This is the chauvinist, inward-looking political milieu in which India has chosen nationalism, protectionism and suspicion over openness, regionalism and cooperation internationally. Modi lost his nerve again and is locking India into an unpromising future.

The gap between India and East Asia will widen, making it tougher for India to integrate with the regional and global economy on favourable terms down the track.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

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