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Two years on, Modi struggles to realize India’s dreams

By Victor Mallet
Indian Prime Minister Narendra Modi.
Valeriy Melnikov | Host Photo Agency | Ria Novosti | Getty Images

Narendra Modi's sweeping victory in the May 2014 Indian general election prompted jubilation among his Hindu supporters in Varanasi, the northern city on the Ganges he had chosen as his parliamentary seat.

The energetic leader of the nationalist Bharatiya Janata party seemed to usher in a radical change from the sclerotic Congress government he had deposed, promising jobs for the young, toilets for the poor and economic reforms for investors and entrepreneurs.

Two years on, and even Mr Modi's supporters in Uttar Pradesh, the country's most populous state, are beginning to wonder if the prime minister will be able to achieve half of what he has pledged — whether the target is a clean-up of the polluted Gangesor the revival of Indian manufacturing.

"Modi's a realist," says one retired banker in Varanasi, "but he hasn't achieved anything yet. People say he needs more time."

Higher up the Ganges in Kanpur, the industrial city once known as the Manchester of India, business leaders say the erratic supply of electricity has improved slightly. But there are few new jobs for the 1m or so young Indians who enter the workforce each month: lack of power, the difficulty of acquiring land, restrictive labour laws and constant interference by bureaucratic and corrupt government inspectors have made sure of that.

"Definitely his vision is perfectly OK," I.M. Rohatgi, who runs an education business and heads the Merchants' Chamber of Uttar Pradesh, says of Mr Modi. "But the implementation is taking time."

Before he took office, Mr Modi's liberal enemies feared he would become a powerful, authoritarian prime minister who would impose or allow his religious backers to impose fundamentalist Hinduism on India's heterogeneous population.

There has been some of that. One Muslim businessman in Kanpur said he was worried about "intolerance" following the lynching of a man in Uttar Pradesh on suspicion that he had eaten beef (cows are holy to Hindus).

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P. Chidambaram, a Congress leader and former finance minister, says the government is "on a dangerous path" of promoting polarisation, while the BJP's Arun Shourie, a disenchanted former confidant of Mr Modi, laments the "intimidation and silencing" of the government's critics.

Yet the principal complaint about Mr Modi is not that he is a domineering Hindu puritan but that he has failed to do much for economic development.

"His concept of development is a few large, shining and conspicuous projects," says Mr Shourie, referring to such Modi-led campaigns as "Make in India" and "Digital India". Or, as Mr Chidambaram puts it: "Where are the jobs?"

Business leaders say it is unfair to suggest that nothing has been achieved, although few of them would agree with Jayant Sinha, minister of state for finance and a former McKinsey partner, when he says "we are fundamentally changing the nature of Indian capitalism" to help entrepreneurs.

On Mr Modi's watch, India has accelerated road-building, invested in the ageing rail network, launched an ambitious solar power plan, opened accounts for more than 200m previously unbanked Indians, and increased the foreign investment limits for sectors ranging from insurance to defence manufacturing.

But it has failed to repeal the previous government's retroactive tax law, which has targeted Vodafone and Cairn Energy among others and sapped investor confidence. Nor has it so far been able to break the grip of the Congress party on the upper house of parliament to enact a long-awaited goods and services tax that would benefit business and the economy by turning India into a single market.

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Mr Modi also faces intense resistance to change from Indian bureaucrats and is undermined by ineffective cabinet ministers he seems unwilling to sack. He sometimes finds his initiatives blocked by state governments — such as that of Uttar Pradesh — controlled by parties other than the BJP. Banks are constrained from new lending by a mountain of bad loans for infrastructure and industry dating back to previous administrations.

Priyankar Upadhyaya, a political scientist at Banaras Hindu University in Varanasi, says Mr Modi "desperately" wants economic development and finds himself stuck in a "trap of expectations" set by hopeful voters.

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"He knows that in 2019 [the year of the next general election] people are going to look at these issues."

Mr Modi has already been distracted from government by state elections, including one next year in Uttar Pradesh, whose 200m inhabitants make it politically the most important in the union.

"I think he really wants to bring about change," says Prof Upadhyaya. "But the problem is that the system on which he depends is mired with issues."

For Harsh Pati Singhania, director of JK Organisation, a family-controlled industrial conglomerate centred on Kanpur, the Modi government is on the right course but needs to focus on implementing its plans.

"India," he says, "for any government or administration is not so easy to govern."

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