Will post Covid India be economically stronger?
Unlike his predecessors in India and abroad, Mr. Modi has been far less fierce in exercising strong economic will in his second term. A couple of opportunities (some would say crisis) came and went and our finance minister (with guidance from PMO) didn’t bat for a radical approach to come out of each one of them. Result? Well the economic growth is dragging along and we have clearly not provided an alternative to China. That cake went to Vietnam.
In their ruling style or the way they approached the elections, both, Mr. Modi and Mr. Trump have been mass influencers like the Margaret Thatchers or Ronald Reagans of the world (minus the radicalism). This is an era of superstars in Politics. Personalities who are flamboyant, marketing experts and egotistic. A combination of these traits tends to make these personalities more inclined to populist social schemes rather than strong economic will. People expected the govt to be bold in tax reformation in this union budget but to no avail. The land acquisition bill was never reintroduced. Make In India has not really taken of. And the strict lockdown in Covid might be lauded by many as proactive and bold but India hasn’t prepared itself to lift the lockdown. Therefore the extensions and no end to this pandemic in sight. Countries like New Zealand and South Korea with mass testing and countries like Sweden with strategy of herd immunisation are fairing much better. Now many are questioning the cost benefit of this extension of lockdown and whether this will lead to more deaths due to hunger than Covid itself.
In the current scenario, where many believe India would benefit from this pandemic on the economic front, there are critics who argue that Mr. Modi is not as bold as he was when he got elected in 2014. He has transformed himself into a socialist leader who understands that great economics doesn’t win you elections, hero worship does. I recently read an article by a Wall Street veteran. She claimed that India will not be able to become the preferred destination of choice for companies looking to move out of China in the post Covid world and her reasons were more or less on the lines of the discussion here.
Lastly, I would like to end by sharing a discussion I had with a few colleagues at my workplace. Many believed that India will never become a developed nation and will always be a developing nation as we our socialists at heart and capitalism is too scary for us. I think many leaders in India understand this hence they all are trying to forge an image which is of a socially aware leader rather than a disciplined head of a financially prudent company. If it is up to the Company’s employees to choose a CEO, will they ever choose a financially prudent and profit maximising person to lead them? I am not sure. Maybe I wouldn’t. I would rather choose someone who reduces layoffs and attrition and provides social benefits along with monetary ones. Probably that is why the corporate world is run by boards and shareholders. Since politics is run by shareholders who are also employees, any leader who gets re-elected becomes bolder, not economically but socially and the same might be true for our motherland hence double digit GDP growth might still be a few years/decades away.
