Has Narendra Modi cleaned up India?
Next year it will surpass China, becoming the world’s fastest-growing emerging market. Its international position has improved too, with Modi’s vigorous diplomacy earning him a place alongside China’s Xi Jinping and Shinzo Abe of Japan in a new troika of strongman Asian nationalists whose interplay will define the continent’s future.
.. But India has also suffered from a wider and equally depressing interplay between politics and criminality, in which those with links to illegal activity have sought elected office, often simply to protect their business affairs. Around one third of the members of India’s parliament now have criminal cases pending against them.
.. India’s vast election are notoriously expensive—one estimate suggested that last year’s poll cost political parties in the region of $5bn. Almost all of this is given covertly, the majority from wealthy businesses.
.. Losses to the public purse were easier to calculate, however. On coal, for instance, Rai produced a report in 2012 estimating that India could have raised more than $30bn, had it auctioned mining rights, rather than gifting them to the private sector.
.. Many of these figures and those working for them prospered in what Harvard academic Michael Walton describes as “rent thick” sectors of India’s economy such as real estate, infrastructure or mining—meaning those in which income (or “rent”) often comes via influence-peddling, rather than fair competition.
.. India probably now has a higher proportion of national wealth in the hands of its billionaire class than any other major emerging economy, with the exception of Russia.
.. the country’s system of agricultural support allows nearly $5bn worth of food grains to rot in government warehouses each year, while also encouraging widespread graft.
.. Modi’s main aim is to get India’s economy moving, an area where picking fights with industrialists, for instance, could prove disruptive, in the short term at least. Yet the suspicion remains that Modi’s caution stems from an unwillingness to disturb powerful, entrenched interests. Put more simply, India’s Prime Minister wants to win re-election in 2019, in what is certain to be the most expensive campaign in Indian history. That will require money. Lots of money. Any action that might affect political funding, in particular, is likely to be avoided.
.. India is the world’s largest democracy, and perhaps its most unlikely. No country has sustained democratic rule while being as poor.