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Doing economic reforms, the Narendra Modi way Ashok Malik November 01, 2012 Email to Author First

Published: 08:21 IST(1/11/2012) Last Updated: 08:28 IST(1/11/2012) share share on facebookshare on linkedinshare on googleshare on emailmore. 13 Comments email print Two opinion polls related to the Gujarat election of December 2012 have been pub licised this past week. The first, commissioned by Headlines Today and India Tod ay, gave the BJP a conclusive majority and 128 seats in a legislative assembly o f 182 members. The second, commissioned by CNN-IBN and the Week, did not go into seat projections but said the BJP would get 50% of the vote and the Congress only 36%. Both polls indicated a comfortable degree of satisfaction with Narendra Modi and his government. In the Headlines Today-India Today poll, two of every three Guj aratis--67%--felt the current model of industrialisation was positive and creati ng jobs. In the CNN-IBN-Week poll, 43% said Gujarat had developed more under the BJP than under previous Congress governments. Fifty-eight% felt Gujarat's devel opment had benefited in the past five years. Of course, these were not the only questions and figures on the economic situati on in Gujarat. There were others in the CNN-IBN-Week poll that suggested: A positive rating for Modi because he had built on a historical legacy (67% felt road conditions in Gujarat, traditionally ahead of the rest of India, had impro ved further in the past five years) A positive rating for Modi because he had addressed distribution and access chal lenges, particularly in rural areas (63% felt supply of electricity had improved ) Continuing challenges for Modi (42% felt just the rich had benefited from econom ic development in Gujarat, though only a slightly smaller 40% felt both rich and poor had benefited) Given the sense of let-down Indian voters have for governments they elect, Modi' s ratings are staggering. They speak for a trust in him and a sense of optimism. Even if a Gujarati citizen hasn't benefited (or benefited adequately) from the economic boom of the past decade, he or she still feels there is hope and implic itly trusts Modi's model. What is the larger message from this? It is that economic liberalisation, the ro lling back of the state from areas where it is not needed and market-based refor m can work in India and win votes. Modi has proved it. However, two caveats need to be entered. First, there is the language in which this phenomenon is packaged. Rather than t alking of strengthening the market system, Modi talks of empowering civil societ y, entrepreneurship and the citizen. Rather than front-ending industrialisation, he talks of job creation, development of soft skills (to make young Gujaratis m ore employable in emerging sectors of the economy) and using technology to help the farmer. Second, there is the honesty of purpose. Too often in India has facilitating pri vate sector entry become a camouflage for crony capitalism. The UPA government h as suffered enormously on this score, and so have governments of various parties in the states. Allocation of finite resources--land, minerals, spectrum--has no

t been transparent and above board. This opaque process has delegitimised what i s a legitimate and necessary transfer. Why has this not happened in Gujarat? After all Modi and his government have bee n accused of giving land at concessional rates or offering tax breaks to compani es, but none of these charges has blown up into a public scandal. Why? It must be understood that it is within the remit of the government--any governm ent, of any party, in any state--to transfer finite resources to third parties t o propel economic growth and create jobs. This is a policy decision it has every right to take. However, what it does not have the right to do is pick and choos e those third parties in a dodgy manner, without an easily understood logic. The government's decision has to be driven by the enlightened idea of helping the s tate and society at large, rather than the narrow idea of rent seeking by influe ntial elites. Modi's probity has been critical here. For example, when he helps Tata Motors bu y land for the Nano plant, or offers it tax breaks, his voter believes the chief minister is doing this to trigger a manufacturing surge in Gujarat, and not bec ause his sister's husband is running a JV with the Tatas. What Modi has established is capitalism, reimagined for the Indian context and i mbued with Indian characteristics, can be politically successful in this country . Crony capitalism is quite another matter.

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