India's economic woes piercing Narendra Modi's aura of invulnerability

The fear is that Modi is already beginning to lean more heavily on that first leg of his, Hindu nationalism, now that his economic strategy is losing some of its sheen

LATEST NEWS :  The immense popularity of Narendra Modi, India’s most dynamic prime minister in decades, has always rested on two legs: Hindu nationalism and his tantalising promises to build on the country’s go-go economy. That second leg is now looking a little shaky.

In the last two years, India’s consumer confidence has plummeted, construction has slowed, the fixed investment rate has fallen, many factories have shut down and unemployment has gone up.

Fingers are pointing at Modi. Just about all economists agree that two of the prime minister’s biggest policy gambles — abruptly voiding most of the nation’s currency and then, less than a year later, imposing a sweeping new sales tax — have slowed India’s meteoric growth.

“Things have been worsening, worsening, worsening,” said Himanshu, an economics professor at Jawaharlal Nehru University in New Delhi, who uses only one name.

Still, the economy here is far from failing. The stock market continues to soar, major rail, road and port projects are unfolding across the country, and foreign investors poured $25.4 billion into India from April to September, up 17 per cent from the period in 2016.

The government on Friday predicted that the country’s gross domestic product would grow by 6.5 per cent in the 2017-18 financial year. While that is the lowest number the country has seen in four years, India’s economy is one that most countries would love to have.

But it does not feel that way to the huge number of Indians negatively affected by  Modi’s policies, and the grumbles are growing. So are social tensions, especially those that divide Hindus from Muslims, and upper caste from lower caste. The fear is that  Modi is already beginning to lean more heavily on that first leg of his, Hindu nationalism, now that his economic strategy is losing some of its sheen. Even in Gujarat, the state considered the strongest of  Modi’s strongholds, where people have been cheering his rise for the past 20 years and line up in dusty fields by the thousands just to catch a glimpse of his saffron scarf and groomed white beard, many feel betrayed.

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