Indian PM’s First Year
May 26, 2015
India’s Prime Minister is celebrating a year in office by highlighting some of his achievements. Narendra Modi says his policies have helped turn India’s economy around. We look at what he’s accomplished so far and the challenges that lay ahead.
Modi steered India’s leading opposition party to victory in an election last May, pledging to revive growth. One year later, he says his government has already delivered on that promise.
"India was viewed as a country with no prospects, Modi says. “But now we have managed to regain trust. Foreign investment is rolling in."
Modi used this speech to call for the public’s support. He said he is determined to advance India’s development and make changes that benefit everyone.
Modi cut his political teeth as leader of the state of Gujarat. He was known as a reformer who built infrastructure to get the economy moving. Now Indians want him to do it on a national scale. NHK World's Abhishek Dhulia looks at his progress.
Modi has managed to attract the attention of the international community. He got Japan to agree to provide investments and financing worth about 29 billion dollars over five years.
China’s President Xi Jinping has pledged to invest 20 billion dollars in India.
US President Barack Obama visited India to attend a national celebration and strengthen ties.
India’s inflation rate has fallen from about 10 percent before Modi took office to 4 percent. More people are buying things again after years of pent-up demand.
One shopper says, “I have more money to spend than I used to."
At the core of Modi’s economic policy is his “Make in India” initiative. The goal is to draw in manufacturers from around the world.
"Many people have said they don’t want to invest in India,” Modi says. “This must change."
The Japanese government hopes the campaign will improve India’s business environment.
Modi picked Japanese bureaucrat Kenichiro Toyofuku to lead a new special team tasked with attracting Japanese businesses to India. Few foreigners are ever chosen to play such an important role in India’s government.
Toyofuku says, "In my position, officials tell me things they wouldn’t otherwise say. The responsibility is weighty. I have to give my all every day."
Toyofuku is doing his best to interest Japanese companies in an industrial complex project near the capital. Once completed, it will be India’s largest industrial park for Japanese firms.
"Since Modi became prime minister, the government’s pace has picked up a lot,” Toyofuku says. “The results of this will be evident within a couple of years."
But it’s not all smooth sailing for Modi’s economic reforms. A government minister said road and other construction projects worth roughly 28 billion dollars have stalled. One reason is the difficulty of securing land. In January, the government asked parliament to pass legislation streamlining the process of land acquisition.
This has prompted a backlash from farmers, who were major supporters of the opposition party in last year’s election. They accuse the government of trying to steal their land. Opposition parties have also rallied behind the issue and blocked the legislation.
Caught between high expectations and growing opposition, Modi is under pressure to rethink his strategy. All eyes are on him as he strains to put a charge into India’s economy.
Aki Shibuya and Sho Beppu spoke with NHK senior commentator and former New Delhi correspondent Hiromi Hirose about Modi’s first year in office.
Beppu: Hiromi, you’ve been followed Modi’s career for a while and actually you’ve met him before. How do you see his first year in office?
Hirose: He’s been very impressive in diplomatic affairs. Chinese President Xi Jinping actually flew to India for Modi’s 64th birthday. They sat on a swing together and took a walk along a river. They didn’t look like leaders involved in a territorial dispute. He’s been good at attracting investment. He comes from Gujarat, a merchant town, and he’s brought that spirit to the prime minister’s office. He’s been traveling overseas, picking up promises of investment. He’s won major commitments from Japan and China by fanning competition between them.
Beppu: But you know, we still remember when Modi was Chief Minister of Gujarat State, he was denied a visa by several countries, including the US, because it was said that he had failed to stop a series of deadly religious riots. Is Washington now welcoming him?
Hirose: Yes, very much so. President Barack Obama took him to the Martin Luther King Memorial. They talked about how King was inspired by India’s Mahatma Gandhi. It was a clear effort to emphasize common values between their countries. That was a remarkable change in the US attitude.
Shibuya: How is Modi faring domestically?
Hirose: It’s too early to say, but business leaders certainly like him. Adi Godrej is the Chairman of The Godrej Group. He says, “If all goes well and if the reforms move well, India could well have a double-digit rate of GDP growth by the next year, over 10% GDP growth. Modi is doing well. A lot of reforms have already been done.”
Modi’s reforms may appear bold. He wants to completely change how the economy is run. India’s constitution describes the country as socialist, and a planning commission creates 5-year economic plans. Modi wants to abolish that commission. The so-called “Indian DNA,” has always provided some protection for poor people. But these reforms could change that.
Shibuya: So what are the challenges ahead for Modi?
Hirose: He’ll need the support of parliament to carry out his reforms. Modi is popular with the people because his policies are easy to understand. Things like curbing inflation and cleaning up the towns. People think his economic reforms will bring more prosperity. But he’ll need to deliver on that promise if he wants to keep people on side. Indian economist and Nobel laureate Amartya Sen says that India can see only a limited development under Modi’s business-centered policies. He says you can’t just take policies that worked in Gujarat and apply them on a national scale. When Indian people stop believing they can become wealthy, they may stop supporting Modi.
Beppu: So it seems that it all depends on whether Modi can bring in his reforms on a national level, not only the limited local level of Gujarat.
Hirose: Yeah exactly, that’s right.