India’s Modi Relaxes Labor Inspections, Reduces Compliance

Prime Minister Narendra Modi of India meets Republican House speaker John Boehner in Washington DC, September 30
Prime Minister Narendra Modi of India meets Republican House speaker John Boehner in Washington DC, September 30 (Caleb Smith)

India’s conservative prime minister, Narendra Modi, introduced a new system for labor inspections on Thursday that he said would be the first step in liberalizing the country’s notoriously inflexible jobs market.

Under the new regime, a computerized system will randomly select companies for inspections. Labor monitors will no longer be allowed to check on businesses at their own discretion, a procedure that is vulnerable to favoritism and abuse.

Inspectors, moreover, will have to upload their reports within three days and will not longer be able to modify their findings thereafter.

Companies should also soon be able to submit a single compliance form for sixteen separate labor laws — online.

“Let’s start with trust,” said Modi in New Delhi where he unveiled the measures. “Ease of business is the first and foremost requirement if ‘Make in India’ has to be made successful.”

With ten million Indians joining the jobs market every year, the country can ill afford to stifle business growth.

High compliance costs also deter small companies from formally employing workers. Estimates are just 8 percent of India’s workers have a formal job with benefits and security. The vast majority is employed informally.

Modi, a Hindu nationalist, was elected in May on promises to restore high growth rates and liberalize the world’s tenth largest economy.

Shared Values Don’t Make an Indo-American Alliance

Prime Minister Narendra Modi of India appears on Fareed Zakaria's GPS, CNN, September 21

India’s new prime minister, Narendra Modi, is confident his country can deepen ties with the United States, given the cultural and political similarities that exist between the world’s two largest democracies. But after more than a decade of trying, it should be clear to strategists in both countries that shared values aren’t enough to make an alliance.

In an interview with CNN’s Fareed Zakaria that was broadcast on Sunday, Modi said, “America has absorbed people from around the world” while “there is an Indian in every part of the world. This characterizes both the societies,” he said. “Indians and Americans have coexistence in their natural temperament.”

Modi, who took office in May after his conservative Bharatiya Janata Party won an absolute majority in parliamentary elections earlier this year, admitted that the Indo-American relationship had seen its “ups and downs” through the last century. But “there has been a big change” in the last twenty years, he said. “Our ties have deepened. India and the United States of America are bound together, by history and by culture. These ties will deepen further.”

In what way, Modi didn’t say.

The Americans would welcome a closer relationship with India to balance against China’s growing power in Asia. Modi, a Hindu nationalist, might be more likely to support such a policy than the previous, Congress government whose foreign policy harkened back to India’s nonalignment during the Cold War.

But the perception of an Indo-American alliance against China would alarm the Chinese, warned former American national security advisor Zbigniew Brzezinski in Strategic Vision (2012), “by conveying the impression that America sees China as its enemy even before China itself [has] decided to be America’s enemy.”

Moreover, an Indo-American alliance would be a gratis favor to Russia without any Russian favor in return. In fact, such an alliance would be inimical in two significant ways to long-term American interests in Eurasia: it would reduce Russian fears of China and thus diminish Russian self-interest in becoming more closely tied to the West and it would increase Moscow’s temptation to take advantage of a distracted America drawn into wider Asian conflicts to assert Russian imperial interests more firmly in Central Asia and in Central Europe.

Despite the recent deterioration in Russia’s relations with the West — due to its involvement in a separatist uprising in its former satellite state Ukraine — even Modi will be hard pressed to sever ties with the Russians. Just before he was elected, India struck a deal with them under which the Russians would supply Indian weapons to Afghanistan to prevent a resurgence of the Taliban there.

As the Atlantic Sentinel has argued before, it is primarily the Afghan war, and the strategic complexities it involves, that stands in the way of a closer Indo-American relationship.

Having contributed some $2 billion in aid over the past decade, India is the fifth largest donor nation to Afghanistan. But it doesn’t share a border with the country, hampering its aid efforts. It cannot rely on its rival Pakistan to reach Afghanistan. That country is more inclined to strike deals with Islamist insurgents in its unruly frontier region whom it sees as a useful wedge against India. Indian support for the civilian government in Kabul could therefore set the stage for a proxy war between the two South Asian countries once NATO withdraws from Afghanistan later this year.

India has had to rely on Iran — not exactly putting it in pro-American company either — to facilitate its trade with Afghanistan but that country’s port facilities at Chabahar may not be able support larger volumes of shipments. India did finance the construction of a road from Chabahar to Delaram, a town in the west of Afghanistan that is situated on its Ring Road, to transport goods into the country.

Hence the deal with Russia to route supplies through the north. India, Iran and Russia also have experience collaborating with Afghanistan’s Northern Alliance, made up mostly of ethnic Tajiks, that resisted Taliban rule before the Americans invaded in 2001.

To India’s apprehension, the United States now seek a political settlements in Afghanistan, one that includes the very Islamists militants that menace both their peoples.

India cautioned against Taliban reconciliation as early as 2010, fearing that the movement’s resurgence would allow Pakistan to regain an influence in Afghanistan. Pakistan has since claimed credit for persuading the Islamists to consider talks, undoubtedly to the alarm of policymakers in New Delhi.

Indians are only too familiar with their rival’s agenda in Afghanistan. Pakistan has been involved in numerous instances of domestic terrorism. Its intelligence service — which originally propped up the Taliban during the 1990s civil war, seeing it as the only viable political movement among the country’s majority Pashtun population — was responsible for at least one of two attacks on India’s embassy in Kabul in 2008.

The need to balance against Pakistan and its machinations in Afghanistan is a costly and time consuming effort. Besides pouring $2 billion into the country in hopes of sustaining a civilian government in Kabul, India keeps hundreds of thousands of soldiers at arms in case Pakistan invades or disintegrates and succumbs to civil war. Those are resources it cannot devote to competing with China for allies and resources in Central Asia and the Indian Ocean region.

Unlike the United States, India is locked in direct competition with China — for minerals, oil and gas as well as strategic partners. But America’s policy, including its cooperation with and support for the Pakistani army, its willingness to withdraw from Afghanistan while the Taliban remain a threat and its new cold war, of sorts, with Russia, are making it hard for India to contribute anything substantive to the “pivot” that is meant to keep Chinese ambitions at bay. Shared values or not, even Narendra Modi can’t gloss over these divergent interests and conclude that an Indo-American alliance is feasible now.

India’s Modi Wins Decisive Mandate for Economic Reform

Narendra Modi, chief minister of Gujarat, speaks in Surat, India, January 4, 2013
Narendra Modi, chief minister of Gujarat, speaks in Surat, India, January 4, 2013 (Reuters/Amit Dave)

India’s conservative opposition decisively ousted the ruling Congress party in an election that concluded on Monday, results released on Friday showed. Narendra Modi, the chief minister of the western state Gujarat, won an absolute majority of the seats in the lower house of parliament for his Bharatiya Janata Party, giving him a clear mandate to push through economic reforms.

With most of the votes counted, Modi’s party had crossed the 272 seats needed for a majority in parliament. His alliance, which includes smaller right-wing parties, won almost 38 percent of the votes, giving it 318 seats.

Congress, by contrast, looked set to win less than fifty seats of its own, down from 206. Its United Progressive Alliance got less than 24 percent support nationwide.

The result was the party’s worst since India became independent in 1947 and a blow to the Nehru-Gandhi dynasty that has ruled the country almost without interruption since. A series of graft scandals, high inflation, at 8 percent, and a feeble economic policy turned voters to the Bharatiya Janata Party which promised to replicate Modi’s growth policies in Gujarat nationwide.

Unlike in other parts of India, electricity in Gujarat, which has a population of more than sixty million, runs 24 hours per day. With some forty ports and a prosperous petrochemical industry, the state handles 20 percent of India’s cargo and 80 percent of its oil imports. Its infrastructure is modern and reliable and consistently hailed by businessmen as one of the reasons for investing in the state; the others being its efficient regulatory regime and the absence of major corruption.

Being able to govern without coalition partners, Modi is expected to usher in sweeping economic reforms, including infrastructure investments and opening the country up to international investment and trade.

Betting on a Modi victory, foreign investors had poured more than $16 billion into Indian stocks and bonds before the results were announced. The country’s benchmark stock index jumped 6 percent on Friday and the rupee broke below 59 to the dollar, an eleven month high.

The Bharatiya Janata Party does lack a majority in the upper house of parliament where it will need the backing of centrist and leftist parties to enact legislation.

With turnout over 66 percent, more than 551 million Indians participated in the election, making it the largest in history.

India’s Modi to Unseat Congress, Exit Polls Show

Narendra Modi, chief minister of Gujarat, India
Narendra Modi, chief minister of Gujarat, India (Google Plus/Narendra Modi)

Four exit polls released on Monday showed India’s conservative leader Narendra Modi on track to become the country’s next prime minister. The ruling Congress party, by contrast, could post its worst result in decades.

India’s staged election concluded on Monday with voting in the states of Bihar, Uttar Pradesh and West Bengal.

A CSDS poll conducted for the CNN-BIN television network put Modi’s alliance at 270 to 282 seats while giving between 92 and 102 to the coalition that is led by Congress.

A Nielsen poll for ABP News had the right at 281 seats while a third, by Cicero for the India Today group, predicted Modi and his supporters would take between 261 and 283 seats. 272 seats are needed to form a government.

Polls are notoriously unreliable in the country of 1.2 billion where more than 814 million were eligible to vote. Final results are due to be released on Friday.

Regardless of the final tally, the elections looked certain to result in a massive defeat for Congress which has ruled India almost without interruption since independence and currently has 206 seats in parliament of its own and twenty more from its allies. Now in power for a decade, the party has been discredited by graft scandals and a feeble economic policy.

Whereas outgoing prime minister Manmohan Singh spearheaded India’s economic liberalization as finance minister in the 1990s, he was unable to unite his coalition, which covers the entirety of the left-wing political spectrum, behind a credible reform effort in recent years. Growth was cut in half from an almost 10 percent high before the global financial crisis to under 5 percent in 2012 and last year. Inflation peaked at over 11 percent in late 2013 and now stands at just over 8 percent.

Yet in its election manifesto, Congress promised more of the same statist policies that have held India back in the past, including guaranteed access to health care and housing. Such an expansion in entitlements would risk exacerbating a deficit that is likely to come in at 5 percent of gross domestic product this fiscal year.

Modi, by contrast, held up his record as chief minister of Gujarat, a position he has held since 2001, as a template for the country. Unlike in other parts of India, electricity in the state, which has a population of more than sixty million, runs 24 hours per day. With some forty ports and a prosperous petrochemical industry, Gujarat handles 20 percent of India’s cargo and 80 percent of its oil imports. Its infrastructure is modern and reliable and consistently hailed by businessmen as one of the reasons for investing in the state; the others being its efficient regulatory regime and the absence of major corruption.

Modi downplayed his Hindu nationalism on the campaign trailing, promising “politics of development, not of revenge.” His opponents nevertheless reminded voters that he presided over an outburst of sectarian violence in central Gujarat in 2002 that followed the murder of Hindu pilgrims. Hundreds of Hindus and Muslims were killed in the rampage and while Modi’s government responded by imposing curfews in the cities and called in the army to prevent the crisis from worsening, he was still accused of, at best, doing too little to stop the riots.

The Supreme Court later acquitted Modi of wrongdoing and under his leadership, Gujarat saw no repeat of the communal tension that was once so endemic in the state.

Narendra Modi: The Man to Lead India into Growth

Narendra Modi, chief minister of Gujarat, India
Narendra Modi, chief minister of Gujarat, India (Google Plus/Narendra Modi)

After a decade in power, India’s Congress party appears to have lost both the ability and the will to push through the reforms the country needs to grow and provide jobs for the millions of young Indians who are joining the labor market each year.

The only alternative in the elections that start on Monday is Narendra Modi, the conservative Bharatiya Janata Party’s prime ministerial candidate. Read more

Modi’s Star Rises as Party Defeats India’s Congress in State Elections

Narendra Modi, chief minister of Gujarat, speaks in Surat, India, January 4
Narendra Modi, chief minister of Gujarat, speaks in Surat, India, January 4 (Reuters/Amit Dave)

India’s conservative leader Narendra Modi appeared to have galvanized his party ahead of a national election next year with impressive gains in the states of Delhi and Rajasthan.

Modi’s Bharatiya Janata Party also held on to its majorities in Chhattisgarh in Madhya Pradesh in central India. Exit polls suggested the ruling Congress party had further lost ground in Mizoram in the northeast but to local parties.

The results were a blow to the party that has ruled India for much of its independence. Especially middle-class voters have grown restless since it last assumed power in 2004. Rising inflation, now at 7 percent, and a string of corruption scandals have undermined confidence in the coalition government it leads.

Prime Minister Manmohan Singh, who initiated the liberalization of India’s economy as finance minister in the 1990s, is due to step down next year and would leave the left in disarray. His coalition, which includes a variety of leftist parties from centrist to communist, has been unable to unite behind a convincing economic policy. Growth was cut in half from an almost 10 percent high before the global financial crisis to 5 percent in 2012. It is not expected to come in higher this year.

In dozens of public appearances across the states where elections were held last week, Modi touted his pro-business credentials in Gujarat, an industrial state in the west of India where the Hindu nationalist has governed since 2001, clearly presenting himself as an alternative to the incumbent administration.

Despite high growth and increased per capita incomes, critics point out that Gujarat’s human development has stalled under Modi’s leadership. The state is still the thirteenth most poorest out of 28 and near the bottom in terms of education. But officials maintain that its lackluster performance in both regards is in line with national trends.

Modi can probably present himself as a champion of India’s striving class anyway. In his speeches, he ridicules his most likely opponent, Rahul Gandhi, the son of former prime minister Rajiv Gandhi and grandson of former prime minister Indira Gandhi, as a “prince,” contrasting the Cambridge educated politician’s privileged upbringing to his own modest background. Modi’s father was a tea seller.

The class rhetoric could help Modi win votes from Congress’ traditional power base, the rural poor. The party doles out generous farm subsidies and food handouts that have made it popular in the countryside.

Rahul Gandhi, despite not having been formally nominated as its prime ministerial candidate, also boasts of Congress’ success in welfare but this seems to have failed to capture the imagination of many of India’s aspirational young voters.

India’s Conservative Leader Modi Outmaneuvers Rival

Narendra Modi, chief minister of Gujarat, India, June 11, 2012
Narendra Modi, chief minister of Gujarat, India, June 11, 2012 (Google Plus/Narendra Modi)

After a disastrous election defeat and a stint as absentee leader of the opposition, Lal Krishna Advani finally resigned from India’s opposition conservative party on Monday at the culmination of its national conference held in Goa. That conference was meant to sew up the final minutiae of the Bharatiya Janata Party’s electoral strategy for next year’s general election. The Indian press labeled the resignation as some kind of major churning being set in motion.

Ostensibly this churn is a result of the meteoric rise of Narendra Modi, the supposedly divisive chief minister of Gujarat state. Advani, as the story goes, believed Modi’s divisiveness to be detrimental to the party’s electoral prospects. The reality is that Advani, like most Indian politicians, used identity politics to further his own career. This had little to do with inclusiveness and everything to do with an internal power struggle.

What happened at the BJP conference in Goa was simply a reflection of ground reality. For too long, the BJP’s leadership has been far removed from dissatisfaction in its lower ranks that came from two successive election defeats. Each of these defeats resulted in selective demotions of people not in the Advani faction of the party. For example, despite being the prime ministerial candidate in 2009 and suffering a crushing defeat, Advani continued to wield power within the party through his protégés. These protégés were Arun Jaitley, who became leader of the opposition in the upper house, and Sushma Swaraj, who became leader of the opposition in the lower house.

That Arun Jaitly had managed the failed 2009 campaign was glossed over, as was the fact that Sushma Swaraj lost to chief ministership of Delhi so badly in 1998 that the right hasn’t been able to stage a comeback there in fifteen years.

The writing on the wall was clear enough for the BJP rank and file. Losers cannot win elections. For a long time the BJP’s adherence to supposedly Hindu principles of respecting elders and not questioning the hierarchy held but at some point pragmatism had to take over. Since the lost 2009 election, a slow but perceptible shift away from the Advani faction has taken place. At the time, Jaitley and Swaraj curiously hid behind Modi’s rising star to avoid censure. While formally acting as Modi’s champions, though, they were in fact persistently undermining his chances from within.

The second source of opposition to Modi came from within the BJP’s second rung of leadership, known as the “lost generation.” The first generation were the grand old men: Advani himself, former prime minister Atal Bihari Vajpayee and former party leader Murli Manohar Joshi. All of them had their chance of winning the prime ministership. Only Vajpayee made it.

The second rung comprises the likes of former foreign and finance minister Yashwant Sinha — who, like Advani, refused to attend the Goa conference and accept the new power alignment. The assumption was that owing to his precocious talent and education he would be the obvious heir apparent. This was not to be.

The third-generation leadership is centered around Modi, assisted, sincerely this time, by Jaitley and Swaraj who worked hard to ensure that succession would skip a generation. They hoped to subsequently edge Modi out.

Modi, as it turned out, would not let himself be outmaneuvered. While he wasn’t officially nominated for the premiership, he will lead the BJP into next year’s election. The party will therefore likely focus on development and have a very right-wing approach to economic policy. It will try to steer clear of social issues, knowing that Modi’s reputation can only bring negatives to the table — even if minorities in Gujarat are better off than anywhere else in the country.

So Modi has won even if he didn’t get it all. What’s next?

It is doubtful that Modi will have the internal administrative powers to overhaul the BJP’s hopelessly divided rank and file. In all probability, it will cruise to another election defeat given that the Congress is relying once again on true and tested preelection populism that has proven so detrimental to India’s economy in the past. The danger for Modi is that while he is now the face of the party, he isn’t formally its lead candidate. He might be scapegoated for defeat but not benefit from any gains.

Secondly, the final battle for the BJP has just begun and will be played out in earnest following the 2014 elections. Modi has proven time and again that he wants power, not the trappings of it. Until he gets what he wants, the BJP will likely remain in flux.