Dhiraj Nayyar’s new book shows Narendra Modi's understanding of markets is in no way inferior to that of his critics
Unlike his peers in academia or financial journalism who run down the Modi government’s demonetisation drive and GST roll out, Nayyar categorises these moves as “radical reforms” intended to benefit the economy in long run
Dhiraj Nayyar’s Modi and Markets: Arguments for Transformation was perhaps published earlier than it should have been. The title would have made for a more timely read, had it coincided with the RBI deputy governor Viral Acharya’s critique, wherein he cautioned “…governments that do not respect the central bank’s independence will sooner or later incur the wrath of financial markets”.
Unfortunately, economist-turned-journalist Nayyar could not incorporate this theme into his book, which is a collection of his articles as they appeared in various publications. Nayyar’s writing is devoid of academic jargon, and the text would be easy to follow even for those uninitiated in elementary economics. The accessibility of Nayyar’s work, however, does not dilute the seriousness of the content.
It is apparent right from the get-go that Nayyar favours what is called ‘Modinomics’. He critically examines the policies initiated by Prime Minister Narendra Modi through his own understanding of economics, and explains these in a lucid and interesting manner.
A case in point is the book’s second chapter — “The real importance of Modi’s rise: A CM as PM” — which elucidates the advantages Modi had on account of serving as the chief minister of an economically prosperous state like Gujarat for nearly 13 years. In next chapter, Nayyar claims that the paradigm of governance that Modi pursued was radically different from previous regimes.
Nayyar’s views carry some weight, as he also served the NDA government as officer on special duty (OSD) — Niti Ayog, the policy planning body which is now entrusted with the task of encouraging development through “cooperative federalism”. Ever since the planning commission wound up, the Niti Ayog has devised various schemes to initiate competition among states and even districts, in a bid to encourage faster growth. “The Modi model is a delicious prospect for India’s democracy, federalism and governance,” Nayyar writes, quite upfront about his prognosis. “That will remain Modi’s real legacy”.
That Nayyar sees hope for India in the BJP’s politics is evident in the chapter titled “For Moral Capitalism” as well. His erudition as an economist comes through when he dwells on the Nehruvian fascination for Fabian socialism, the Soviet model of control and command economy; the inability of PV Narasimha Rao to do a Deng Xiaoping in opening up India. At the same time, Nayyar also contextualises Deen Dayal Upadhyaya’s integral humanism in the ongoing economic debate and writes: “Modi has an intellectual anchor in his (Upadhayaya’s) quest”. This description of Modi — though it may run afoul of many from the Sangh Parivar — is nevertheless an acknowledgement of his adherence to an economic path suited to India and one that is not divorced from the party’s ideology.
Unlike his peers in academia or financial journalism who run down the Modi government’s demonetisation drive and GST roll out, Nayyar categorises these moves as “radical reforms” intended to benefit the economy in long run. At the same time, he is conscious of John Maynard Keynes’ famous saying: “In the long run we are all dead”. Politics is all about the short-term while nation-building is a long-term goal. Here, Nayyar finds an amalgam of both views in Modi, which — the writer argues — augurs well for the nation. He points to Modi’s ability to take non-populist measures as a chief minister, without suffering any dent to his political popularity. In other words, Modi can take non-populist decisions, yet score a political victory.
In his book, Nayyar also refers to a “third India” (other than ‘Bharat’ and ‘India’, often categorised as ‘poor’ vs ‘rich’ in the political context). He points out that over 700 million Indians could be called “neo-rich” — neither rich nor poor, these individuals belong to a class which is constantly aspiring to break the economic ceiling, and scaling up the ladder. This class, which has moved ahead with time, is not fascinated by worn-out socialist slogans glorifying poverty for the sake of politics.
In Nayyar’s understanding, any politician who can read the mood of this class right will hold the key to power. And Modi is apparently more qualified than Rahul Gandhi, Arvind Kejariwal and others, to understand the pulse of this class because of his own social and economic background. Coming from a poor background, Modi finds much more acceptance in this class as compared to the others.
The ease of reading the various articles collected in this book means you won’t find yourself putting it down. Nayyar is able to weave a compelling story around the complex subject of political economy. Readers may perhaps draw their own conclusions about the book being an outright eulogy to Modi’s policies. That, however, wouldn’t be true, as Nayyar is also quite critical of the government’s prevarication on certain economic reforms and (its) conservative Hindu political agenda.
A first reading of this book clearly reveals that the Modi government’s understanding of the market is certainly not inferior to Viral Acharya’s, whose caution has a political rather than economic undertone. One only wishes Nayyar could have included this aspect in his book as well.
Modi And Markets: Arguments for Transformation | By Dhiraj Nayyar | Westland | 232 pages
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