Modi Masked His Reform Failings With Bombs and Nationalism

Iain Marlow
Modi Masked His Reform Failings With Bombs and Nationalism

(Bloomberg) -- Join us on WhatsApp for special coverage of India’s election. Sign up here.

On a cool Delhi evening in November 2016, Narendra Modi hastily called a national address to make the most consequential decision of his premiership: Effective at midnight, some 86 percent of India’s cash would no longer be valid in a bid to stamp out corruption.

Panic quickly ensued as India’s 1.3 billion people—many with no bank accounts or credit cards—rushed to exchange banned 500 and 1,000 rupee notes. The economy took a hit, thousands lost their jobs and deaths were reported in the chaos. When the dust settled, nearly all the invalidated bank notes were returned, raising questions about what it all accomplished.

Such a drastic move would be political suicide for most elected officials. But Modi managed to come away even stronger using a playbook that has put him on the verge of securing a landslide victory when votes are counted in a national election on Thursday: Heavy-handed appeals to nationalism that rally the masses to his side.

“Modi will have learnt from his first term that controlling the political narrative can yield huge political dividends,” said Katharine Adeney, director of the University of Nottingham Asia Research Institute. In the general election, she said, he’s successfully touted his record on national security, which came after India dropped bombs on Pakistan earlier this year.

The episodes show the evolution of Modi since he first contested India’s top office five years ago. Back then, he said a vote for his Bharatiya Janata Party was a vote for development, reform and jobs. He promised to clean India, make stuff in India and make India respected again on the world stage.

After winning the country’s biggest electoral mandate in three decades, he had some initial success pushing reforms. Six of nine major measures—including deregulating diesel prices and opening the coal sector to foreign investment—came in the administration’s first year, according to the Washington, D.C.-based Center for Strategic and International Studies.

Yet after that, things slowed down. As Modi’s ratings dipped during his tenure, reform talk gave way to pledges of quotas for government jobs, income support for farmers, a massive health insurance program and vows to punish arch-rival Pakistan.

“Industry had expectations that he would be a huge corporate reformer,” said Nilanjan Mukhopadhyay, who wrote a biography of Modi. “But if you are going to come and make big structural changes, you won’t be popular.”

Modi, known as a capable administrator during his almost 13 years as chief minister of Gujarat state, notched up early accomplishments by holding monthly video conference calls in which he asked hard questions of bureaucrats overseeing large but delayed projects, according to a civil servant who has worked with him for years. He also set up committees of senior officials from various ministries and had them make presentations to himself and cabinet which stretched late into the evening, the person said

Yet often programs rolled out under Modi’s watch were poorly implemented despite good intentions. One parliamentary report found many newly-constructed toilets under a countrywide drive to bolster basic sanitation weren’t connected to sewers, while villagers given gas connections failed to use them because they could not afford to refill canisters.

Instead of fixing glitches, Modi often moved onto the next challenge because he’s in a hurry to announce more policy victories, according to two senior civil servants who have worked with him for years. The launch of the national sales tax, which caused confusion among business owners and hurt growth, was one example of a policy that was needlessly rushed, one of the officials said. Both asked not to be named discussing the government’s workings.

Critics say the government neither bothers listening to criticism, nor tolerates it. One executive who criticized demonetization on national television said the prime minister’s office called their firm’s chairman the same evening, reminding them that their group also worked closely with the government. The executive, who spoke on condition they not be named, didn’t go on TV again.

Modi’s efforts to control the narrative have met resistance. Two top official statisticians quit after the government suppressed a report warning of record unemployment, and 108 economists questioned the credibility of India’s GDP data in a joint letter. The government also sparred with the central bank governor and removed the chief of the country’s top federal law enforcement agency before his term ended.

G.V.L Narasimha Rao, a BJP lawmaker and spokesman, rejected suggestions of undermining democracy, saying Modi “is a quintessential democrat who has not interfered with any institution.” What’s more, the government’s policies of support for those in need are common sense and popular. “Welfare is not populism, but a dire need to ensure basic necessities,” he said. These programs are “powering the BJP’s success in these elections.”

Before campaigning began in the current election, Modi faced a number of setbacks. The opposition Congress party had won some key state elections, and the economy was wobbly. Modi’s push to create manufacturing jobs has flopped, various indicators suggest India is facing an economic slowdown and measures intended to overhaul the economy such as a new bankruptcy law were overshadowed by job fears.

Yet Modi changed the narrative after a clash with Pakistan in February following a terrorist attack in the disputed state of Kashmir that killed at least 40 security personnel, sparking outrage among Indians. On the campaign trail, Modi repeatedly invoked the need to hit back hard at Pakistan, an archrival of India since partition in 1947.

“Your vote on the lotus will mean dropping 1000 kilogram bombs on terrorist camps,” one BJP leader said earlier this month, referring to the party’s symbol—a lotus—which is featured along with other party insignia on electronic voting machine buttons.

The calls to patriotism—and overt appeals to his Hindu nationalist base—appear to be resonating, with exit polls showing his coalition may sweep to a large majority once again. At an election rally in West Bengal, farmer Dilip Mondal, 45, bought a framed portrait of Modi alongside Hindu gods. He’d traveled seven hours by bus to see the prime minister speak. “I respect him,” said Mondal.

Yashwant Sinha, who served as finance and foreign minister in a BJP-run government from 1998 and 2004, quit the party last year. He fears that Modi’s ability to make Indian politics all about himself rather than social, economic and foreign policy issues poses a threat to the world’s largest democracy.

“The relevant issues of his five year term went completely into the oblivion,” said Sinha, whose son is still a member of Modi’s cabinet. “The opposition failed to counter Modi in this aspect.”

--With assistance from Archana Chaudhary.

To contact the author of this story: Iain Marlow in New Delhi at

To contact the editor responsible for this story: Ruth Pollard at, Alan Crawford

For more articles like this, please visit us at

©2019 Bloomberg L.P.