India's Watershed 2014 Election, A Whole New World?

May 17th, 2014
in Op Ed, syndication

Written by

"Be the change that you wish to see in the world." - Mahatma Gandhi

India has spectacularly voted for "Development, Good and Effective Performance" with a firm rejection of caste and religion based politics. It has brutally punished rhetoric, platitudes, doles, non-performance and corruption. The 33 year old BJP led by Narendra Modi has swept clean into power with a overwhelming majority of 282 out of 543 seats, in what could be called a first watershed election in India's history since its independence in 1947.


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Only 272 seats are needed to form the government.  Economy and development have overtaken the traditional fault lines. Analysts are saying that such a clean sweep for BJP could not have been possible had the Muslims, backward classes and other religious minorities voted on traditionally caste lines. It is as if India has headed the call of Mahatma Gandhi and has mandated Narendra Mod, a man who has been stridently accused of divisiveness to lead the fundamentally different secular socio-political paradigm of the country.

Unlike a cobbled together coalition government of the Congress party, BJP's Modi will form a cohesive government without messy coalition politics. He and his team are widely expected to be firm, decisive, undertake bold reforms and be focused on action.

Pro business, BJP's victory has cheered the markets on the election results declaration day.  The benchmark Sensex exuberantly rose 1,470 points to hit a new all-time high of 25,375.63 in early trade and but closed at an all-time closing high of 24,121.74.   As per Deutsche Bank , it is is expected to rise to 28,000 by December 2014. The Rupee closed 11 month high of Rs, 58.79 to a US Dollar.

Result is game changer for Indian Polity

Election 2014 is a game changing election. All Parties who have played the caste, creed, religion or dynasty card have been shown the door.  The opposition will have to reinvent itself as no party, not even Congress, can collect enough numbers without an extensive multi-party coalition.   Lok sabha has 543 seats and 272 seats are needed to form a government.  BJP on its own have 282 seats -  and with its alliance partner (the NDA) has won 335 seats.

The 129 year old Congress Party which has degenerated into dynastic fiefdom of Sonia Gandhi and Rahul Gandhi [ no relation to Mahatma Gandhi] with a  titular Prime Minister Manmohan Singh has been obliterated. It has been humiliated with only 46 seats.

Communist Parties have become irrelevant. with only 10 seats.

The voters have also become leery of activism. As an example Aam Aadmi Party's Kejriwal, Delhi's Chief minister who styles himself an Activist, was unconvincing in his election campaign.  AAP appears finished at the national level with measly 4 seats.

Regional parties in West Bengal and Tamil Nadu have won by majority in their states but nowhere else.  Detailed results on Election Commission of India Web Site ("Aladdin").

Modi during his campaigns mesmerized the electorate during his campaigns with his vision of development, effective, action oriented good, clean governance.  One of his slogan was "Less Government , More Governance". Modi cited his 10-year track record of good, action oriented governance in Gujarat. Under him Gujarat clocked a 10 percent growth, much above India's average of around 8 percent, for the 10 year period ending 2012.

An amateurish and utterly unconvincing Rahul Gandhi led the Congress campaign concentrating mainly on Modi bashing, playing the bogey secular card and his attacking Modi's alleged inaction in 2002 Gujarat violence. This was disingenuous considering the fact that in the aftermath of Indira Gandhi's assassination more than 8,000 Sikhs were massacred including 3,000 in Delhi which was directly under Congress control. Moreover Congress ruled states have a tardy record of keeping communal violence under check. While huge crowds braved the hot summer weather, with temperatures sometimes soaring to 42 degrees Celsius, to hear Modi, not many turned out to hear Rahul. Often they walked out during Rahul's speeches.

India has bought Modi story and is betting on him. Expectations are running high. Does he have the magic lamp, which he unearthed in Gujarat, that will allow him to create a shining, shimmering, splendid whole new world for the entirety of India?

An Election of Epic Proportions

Two out of three, from a total of 814 million eligible voters, cast their votes.  A total of 101 million new voters were registered since the last general elections in 2009.  Over 1,600 political parties sweated it out under relentless media scrutiny for the 543 seats. The Election Commission of India constitutionally becomes the most powerful institution when the Election Process kicks in to conduct the elections. As an example the new appointment of Army Chief needed a nod from the Election Commission before his appointment could be confirmed.

The Election Commission deployed 8 million Election Workers in 935,000 polling stations.  There were 1.8 million Electronic Voting Machines deployed. A million people were engaged in the counting activity and half a million security personnel deployed to ensure hassle-free counting. The entire process took five weeks.

See Also:

Watershed Election: India Voted Emotively

I can open your eyes
Take you wonder by wonder
Over, sideways and under
On a magic carpet ride
"Shining, shimmering, splendid..
A thrilling place
A wondrous place
For you and me"

- Lyric from Walt Disney movie "Aladdin"

The above lyrics summarize the Modi's 2014 Indian Election Campaign rather well. The last years of Manmohan's Singh Government were unmitigated disaster for Indian Economy. His ineffective and weak leadership set the country's economy in Auto Pilot to self destruct mode. The GDP growth rate has halved to under 5 percent in the past two years. He could not stop the ring of corruption scams which surfaced during his tenure. Nor could he deal with multiple power centers. Neither could he undo the internecine inter-ministry wrangles which brought about a policy paralysis.The acrimonious public bickering between the Finance Ministry and Reserve Bank Of India made matters terrible.

Absolutely inane retrospective tax laws which scared away the investors were the last nail in the economy's coffin.

Faced with runaway inflation, massive corruption scandals and non governance, India has voted for Modi ignoring his allegedly controversial role in Gujarat 2002 riots.  Modi has denied wrong doing and The Supreme Court of India has exonerated him of all charges.

He has an excellent track record in Gujarat. Land acquisitions are critical for infrastructure and Modi's Gujarat government has done an excellent job.  The Supreme Court of India, Commerce Ministry and an Accenture report gave thumbs up to transparency and effectiveness of Modi's land allotment process. Under his rule Gujarat has flourished and prospered.  Barring the 2012 riots which are a black marks for his administration, the Muslims have not been subjected to witch hunt as has been alleged.  India has bet on Modi's promise to scale up his Gujarat performance to the National level.

So what are Modi's options and what challenges he faces? How effective will he be in scaling up his Gujarat performance to the National level?

See Also:

Modi's First Challenge: Wipe out the Right Wing Hindu Nationalist hyphen

Manmohan Singh failed because he believed that he was accountable to Sonia Gandhi and her dynasty first and the Nation afterwards.  There is a fundamental lesson here to be learned by Narendra Modi as Prime Minister. Modi was formerly with RSS a right wing Hindu organization.  It still yields considerable influence on BJP.  If BJP and RSS truly believe in welfare of nation, BJP's old guards and RSS must allow Modi to function.  Conversely Modi has to be in command.  Not only must he to be firmly in command and not be distracted by internal BJP-RSS potential interference (politics) but he has to take along all his bitter political rivals.  He must control, not divorce, the divisive potential within his inner circle.

This is going to be extremely tough and tricky, but not exercising constitutional power is not an option.

Though Muslims are ambivalent about Narendra Modi they are ready to give him a chance. But it is a long way to go. To be fair to BJP stalwarts and RSS, both indicate in early sound and video bytes they understand the enormity and responsibility of the mandate given by people. Rajnath Singh is President of BJP and Modi's close co-worker. To roughly translate and paraphrase him:

"This is not a moment to gloat, but to understand the enormity of the mandate given to us by Nation. We will work closely with our allies well as as a team to fulfill the responsibility which has been given to us by the Nation"

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Modi's First Key Result Area

India has federal structure and all States are fiercely independent.  Most of the state governments are run by parties other than BJP. As a Gujarat chief minister he was in command.  As a Prime Minister his hands would be tied constitutionally as the Center depends on states to implement its policies. This means that his performance as prime minister will be dependent on the state governments' performances.  This will be his first key result area and the biggest challenge he faces.  Can Modi be a leadre more than a commander? More on this later.

To be fair to BJP and Modi, they have reached out to non BJP states, but good intentions have to be translated into sustainable actions and results. Kashmir deserves special mention and his initiatives on Kashmir will be keenly awaited. We now move on to the Economy and other areas.

The Indomitable List

We present an almost indomitable list. Modi understands this. He says that Congress was given 60 years, the Nation should give him 60 months.

1.  Economy

Here are few sobering thoughts about overarching, macro trends. A reality check is in order regarding the hype of Modi's campaign. For a decade till 2012, under Modi, Gujarat grew 10 percent while the rest of the country grew 8 percent. India has Federal structure where the States are fiercely independent. Therefore there is a fundamental difference between leading a State and the Nation. However there are some misgivings. To quote a UNICEF report,

"Although Gujarat is recognised as one of the most prosperous states in India with very good infrastructure of highways and ports, and strong petrochemical and automobile industries and agro products, a lot needs to be done to improve socio-development indicators.....every second child under 5 is malnourished .

The 'Child Mortality Estimates Report 2012' released by Unicef in New York has said that in 2011, around 50 per cent of global under-five deaths occurred in just five countries of India, Nigeria, the Democratic Republic of the Congo, Pakistan and China.
Incidentally, India's toll is higher than the deaths in Nigeria, Democratic Republic of Congo and Pakistan put together."

Modi is enamored with the China model and dreams of building things like bullet trains and a 100 new cities.  However, globally economies are slowing . The Chinese model of growth is showing cracks. Many pundits have argued that Modi should copy Chinese model but we vehemently disagree. India is a bottoms up story and China is top down. India has to have its own models-period.

See also:

2. Infrastructure

As said earlier India has a federal structure and each state fiercely follows independent policies. Land acquisition is a State subject and center has no control can stall the the infrastructure building process. In Gujarat Modi, since he was in command, he did a commendable transparent job of land acquisition which quickened the infrastructure growth.  Tata's Nano project in Bengal became unstuck. It was being built on fertile green land and was vehemently opposed at ground level.  The project was shifted to Gujarat after Modi offered the Tatas a land parachute.  What is being argued here is that at national level land acquisition needs broad consensus and more reforms. Where is all the capital going to come from? The Bankers are skeptical.

Let us assume that Modi uses his magic lamp, electrifies the infrastructure projects through a cooperative process. How much increase in GDP growth can happen in next five years? From sub 5 percent will it go to 9 percent and how quickly? And Chinese model is not portable. Modi achieved a growth rate of 10 percent for Gujarat. How much can Infrastructure Growth rate be accelerated? There are no clear cut answers.

Read also

3. Job Creation

While growth is important, job creation is equally important. Various estimates indicate that India needsto create 10 million jobs for the next three years. This is a tall number indeed. Growth worldwide has been job deflationary due to automation. So what kind of meaningful employment will be generated. Will it be Spitting on the moon? . Or will it be handing out doles? Again the crystal ball is very murky.

Perhaps India is sitting on demographic time bomb. If enough jobs are not created, then the younger population who have reposed great faith in Modi might take to the street.

Read also:

4. Poverty Alleviation

India's poverty rate is projected to drop to 22%, says a UN report. The UN Millennium Development Goals Report, however, suggested that even though progress has been made in reducing poverty, South Asia continues to lag in terms of nutrition, sanitation and gender equality. India has shabby track record in treatment of its Girl child and Women. These are big issues and Modi's Government has to galvanize the processes. More importantly the rampant corruption which leads to funds leakage has to be stopped.

5.  Education

Education is a priority area. Will Modi's action orientation make the difference. For example girls drop out from schools because they have no toilets.  The previous government was known for lofty goals and no implementation.  So to reduce dropout rates and implement "Right To Education", toilets will have to be constructed.  You can't make this up.

Read also:

India: Right To Education-Lofty Goals, Hasty, Poor Drafting and Slow Implementation: Econintersect

Girls don't have bladders of steel : DNA India

Reign in the over zealous Babus, avoid jingoistic pressures and provide transparent tax laws

Over zealous babus have to be firmly dealt with. High on the list are the ridiculous retrospective income tax law which has frightened investors both international and domestic.  The previous Finance Minister Pranab Mukherj,i who is now the President, was ill advised and introduced the infamous retrospective tax amendments.  This is not to exonerate multinationals who are known to use transfer price mechanisms to evade taxes, but rules of the game cannot be changed retroactively.

This must be handled immediately. On the other hand he has to be careful that institutions are not trampled and multinational organizations are not let off the hook for legitimate obligations.  It is indeed a fine line tight rope walk.May we suggest he should bring in William Black as an adviser if Prof. Black is agreeable?  He specializes in White Collar Crime.

See Also:

Have a heart to heart talk with Raghuram Rajan the present RBI Governor


Central bankers have mainly two tools with which they think they can control inflation or currency values -- interest rates and amount of fiat currency that print.

The Indian RBI governor Raghuram Rajan thinks no differently but with a caveat. He has no role for the Indian Rupee as a fiat currency and believes that US Dollar should be the Indian fiat currency. Hence his outbursts against US FED.

Worst, he believes that he can function in vacuum on his own in his make-believe world of interest rates with no regard to sovereign goals and ground realities.

This is rather unbelievable but understandable; he has no experience in being accountable for results. His appointment as RBI Governor was hyped up in press calling him an Oracle who predicted the Lehman crisis.  (Well, well others also predicted the crisis!)  He became the knight in shining armor who would save India from a financial disaster.

But his past one year has been lack luster and filled with canned responses. Does his unsolicited advice to Bernanke and the US FED vindicate that he is living in an unreal single dimensional world of Fisher equations or some obscure maths that he wants to keep a secret?  Do his public outbursts on the US FED and Indian Government (we thought he was part of the Indian Government) demonstrate that he has no experience of how sovereigns work and that he is unwilling to adapt?

Bernanke sparred with Rajan publicly , in Washington DC and Mumbai. We apologize for puncturing holes in Raghuram Rajan's secret one dimensional model, which seem to be responsible for his public outbursts......but he is just out of depth, not in touch with reality on the ground and clueless. While no two economists agree, it might be not out of place to point out that, according to Prof Philip Arestis of Cambridge University and Prof Malcolm Sawyer of Leeds University, effects of interest rates on inflation, are small.

While on interest rates perhaps the Government should have Steve Keen as an economic adviser if he is agreeable?  He has richer broad based conceptual model of how multisectoral economies function.

A heart to heart talk is definitely in order with Raghuram Rajan and he should be nudged to toe the sovereign line. We encourage Raghuram Rajan to introspection and to rise to the occasion. We urge him to be open to Modern Monetary Theory and other hetrodox theories that are outside of his mainline education.

We hold no grudge on him flying off abroad so many times. But we beseech him to takes a tour of the length and breadth of India to understand realities on the ground. As a realty check could he make public the number of tours he has taken abroad and in India (New Delhi and Mumbai don't count).  Beyond that we endorse BJP's Subramium.Swami (a Ph D. in Economics from Harvard), who has said, "Raghuram Rajan is free to go."

See also:

Firm Foreign Policy not run by random default events

US: Obama administration has welcomed the new Government. There is an urgent need to put interactions on proactive path rather than muddling through especially after the Nanny gate episode which generated too much acrimony . Some serious rethinking has to be done on both sides as to why the episode occurred and why both sides acted immaturely.

Nothing much has changed since RIC and The New Silk Road was written in 2011.

Continuity has to be maintained and there is no reason to believe that there will be any fundamental change though there might be change of emphasis.

Relations with China and Japan are expected to improve.

Pakistan continues to be a flash point. He is expected to talk over the Pakistani's ISI and reach out to the civil society led by Nawaz Sherif.

Concluding Remarks

Given the enormity of the complex task, uncertain economic environment, an impatient electorate with unrealistic time frame expectations, it is going to be uphill journey under a garrulous media.  We are absolutely sure that Team Modi will give India more than their 100 percent and will work as best as they can. In his victory speech in Vadodara, workaholic Modi has thanked the nation and said that he will dedicate every moment of his life to 1.25 billion Indians. He reached out to opposition parties saying, "there are no rivals in politics only competitors ". His mantra post election is:"Sab ka sath, sab ka vikas" which translates to "Everyone's support, everyone's progress".

India's spectacular mandate has bet on Modi's magic lamp to whisk it away from the present stagnation, despondency, paralysis and loss of national pride. The country has waited patiently for 60 years; an additional 60 months, hopefully should not that big a deal.

India is celebrating. After it settles down, it look forward expectantly though somewhat anxiously to 'A Whole New World'. [BJP 2014 Election Manifesto] .

Wishing Godspeed to Team Modi.

Few afterwords

The Election Process is sometimes a source of wonder to many outsiders. In the words of US States Department Spokes Person:

"We congratulate the people of India on their participation in the largest-ever free and fair democratic election in human history," she said, hours after a record number of Indian voters concluded casting their votes in the nine-phase Lok Sabha elections. These elections are an inspiring example of the power of the democratic process in action, and the United States, like so many others around the world, has great admiration and respect for the vibrancy, diversity and resilience of India's democracy." - Times Now TV

To Indians the election process, though serious business, is a festive celebration of renewed optimism, new hopes and aspirations. There were dances, there were God-men, villains and the inevitable riotously funny spoofs on politicians. Indian news channels regaled in tripping politicians and making mince meat of them on numerous live debates. The 2014 Election Jamboree is over and India settles down to its humdrum activities.

"This is indeed India! The land of dreams and romance, of fabulous wealth and fabulous poverty, of splendor and rags, of palaces and hovels, of famine and pestilence, of genii and giants and Aladdin lamps, of tigers and elephants, the cobra and the jungle, the country of a hundred nations and a hundred tongues, of a thousand religions and two million gods, cradle of the human race, birthplace of human speech, mother of history, grandmother of legend, great-grandmother of tradition, whose yesterdays bear date with the mouldering antiquities of the rest of the nations-the one sole country under the sun that is endowed with an imperishable interest for alien prince and alien peasant, for lettered and ignorant, wise and fool, rich and poor, bond and free, the one land that all men desire to see, and having seen once, by even a glimpse, would not give that glimpse for the shows of all the rest of the globe combined......"  - Mark Twain in Following the Equator Part 4 CHAPTER XXXVIII

To a casual observer nothing seems to have changed... India continues to be a land where poor and rich coexist , perhaps an exotic country to visit and a land of incredible diversity.  To many extents they are right....and in some ways they are way of the mark.

BJP's election symbol is Lotus. Goddess Saraswati is often depicted holding a white Lotus . She symbolizes cosmic knowledge, creativity, education, enlightenment and music. She is known in Burmese as Thurathadi, in Chinese as Biàncáitiān, in Japanese as Benzaiten and in Thai as Surasawadee. The other Goddess Laxmi is often depicted standing on a red Lotus. Laxmi is Goddess of material and spiritual wealth as well as fortune.

Modi has been elected from Varanasi, arguably a 5000 years old city. Legend says that Varanasi was founded by Lord Shiva, who is the God of creative destruction, transformation and a patron of Yoga and arts. Is it a coincidence or an omen, that a humble tea vendor from "OBC, backward class" has replaced Manmohan Singh, a Ph D. in Economics, as India's Prime Minister?

Where will India be in 2025 compared to Mark Twain's India of the 1800s? Prediction is very risky business. Three links provide long term view of India by non-Indian commentators:

We leave you with few images of the 2014 Election Jamboree.

Image: Supporters of India's ruling Congress party dance at an election rally in Mumbai on Monday

The court gave organisers the permission on conditions that there shouldn't be any political activity in the events. (PTI)





Narendra Modi is spoofed using an iconic scene from Charlie Chaplin's "The Great Dictator"


Manmohan Singh's Facebook LookBack video

Source :


A spoof super-hero movie trailer featuring Rahul Gandhi - Click image to view.


Rahul Gandhi

Modi seeks blessings of his mother after his victory.


Victory Celebrations: Source NDTV




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