Early in the morning of August 15, India’s Independence Day, Narendra Modi, the country’s prime minister, delivered a forceful extemporaneous speech, calling for national unity in fighting poverty, improving sanitation, and protecting women from sexual violence. There was one area in which the speech fell short, though: economics. Contrary to Modi’s campaign promises, his address included barely any pro-market content.
It is, of course, too early to grade “Modinomics.” It would be unreasonable to expect the new prime minister to have already enacted profound reform. And members of his Bharatiya Janata Party (BJP) have, in less prominent venues, spoken about the need for policy change, typically emphasizing the importance of improving the business climate and curbing bureaucracy.
Without deeper reforms, however, these would be only modest improvements. To be successful, Modi must do much more. His party campaigned on inaugurating an era of pro-market policies after years of mismanagement under the Congress party. India does need fundamental change: its rural land rights system is a mess, its manufacturing has been strangled by labor market restrictions, and its states are poorly integrated. But, so far, the new government has squandered major opportunities to establish its economic vision: in the new budget unveiled in early July; at the World Trade Organization (WTO) talks in late July, and at the Independence Day speech.
Worse, the government has not created its own opportunities to launch a reform platform by scheduling a major event or speech around it. It is beginning to seem that Modi the campaigner is distinct from Modi the prime minister, and that perhaps he and his staff do not intend to make a decisive shift to greater market competition and, ultimately, greater prosperity.
A fair assessment of Modi and his government depends in large part on what the public expects of the new team. Does India need only to reduce corruption and become more business-friendly? Or does it require more sweeping reforms? If it is the former, Modi
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