Indian Politics 
Modi’s first year in power: what it means for India?

Karan Jain on Modi's first year in office

On 26th May 2014, Narendra Damodardas Modi was sworn in as the Prime Minister of India leading the Bhartiya Janta Party (BJP) led National Democratic Alliance (NDA). The campaign that brought the Modi government into power was a meticulously planned affair, with the unanimous backing of corporate India. The backbone for the campaign was provided by 700,000 volunteers who unleashed a campaign to polarise the electorate through selective targeting of Muslims and other minorities. Modi’s PR team and the corporate controlled media served to portray a larger than life image of him, backed by the myth of the Gujrat model of ‘development’, Gujrat being the state where Modi served as a Chief Minister for three and a half terms before becoming the PM of India. Coupled with popular animosity towards the previous regime due to corruption charges, ineffectual government and slow growth, the campaign was successful in firmly establishing Modi in power, with his party winning a clear majority in the parliament.

‘Acche Din’ or Good Times, was the catch phrase used by the BJP in their election campaign to sell the dream of economic growth and job creation to the masses using effective media management. Modi’s personal PR team consisted of marketing gurus hired from top advertising firms, for which the BJP spent a third of its colossal $115 million election campaign budget (the most expensive in Indian history by any party). The Vice-President of the defeated Indian National Congress (INC) was right on the spot when he said at a party meeting, “The opposition (BJP) is very good at marketing, they can even sell a comb to a bald person”. In reality, Modi’s idea of development is but a very narrow-minded vision of economic growth with complete disregard for economic equality, social inclusion and environmental sustainability. This exclusion is manifesting itself in consistent efforts by Modi’s government to diminish the public’s ability to take decisions regarding their development, including through seeking recourse in the courts.

One of the most glaring examples of such regressive policy changes is the amendment introduced by Modi in the Land Acquisition Act of 2013. It was enacted by the previous regime to ensure a transparent process for land acquisition for the purpose of industrialisation and urbanisation as well as ensuring fair compensation and rehabilitation for displaced citizens. While the 2013 Act was not perfect in itself, it did give some negotiating rights to the public in case their land was acquired by private companies or public-private-partnership (PPP) projects. The 2013 Act mandated the consent of 80% of affected land losers in the case of private developments and 70% in the case of PPP projects. The Act also made it compulsory for the government to carry out a Social Impact Assessment (SIA) before the acquisition of land, which would include an assessment of the impact on land losers and the environment. The Ordinance for amending the Act was introduced by the Modi government in 2014, with the Bill being presented and passed in the parliament in 2015. Under the new amendment, the conditions of 70% (or 80%) consent and carrying out a SIA have been exempted for five areas – industrial corridors, PPP projects (excluding private hospitals and colleges), rural infrastructure, defence, and affordable housing. It should be noted that almost every private development can be justified under one of these five carve-outs. Effectively, the Act has ensured that there are enough loopholes so that private parties can forcefully (but legally) evict people from their land and bypass any form of assessment on the social or environmental impact of land acquisition. Land is being taken from people and given to corporations at throw away prices. Whilst certainly worrying, this trend is not on the whole surprising. The ‘Gujrat Model of Development’, which was the centerpiece of Modi’s election campaign, provided the template for the model that Modi has in mind for India. Gujrat is the state in Western India where Modi served as a Chief Minister for three and a half terms before being sworn in as the Prime Minster. Investigations by Forbes magazine have revealed that the Adani Group (an Indian MNC) has leased land from the Gujrat government, without competitive bidding, for as little as one cent per sq. meter. It has in turn been sub-let by the Adani group to other companies, including the state owned Indian Oil Company, for as much as $11 per sq. meter. There are several other cases of the Adani group being given vast swathes of grazing lands in the state, without the consent of residents and owners. Land acquisition has always been a subject of intense conflict as it leads to the displacement of entire communities in rural India. These changes are bound to exacerbate such conflicts and further entrench rural poverty in the name of ‘development.

‘Development’, ‘Job-creation’ and ‘Inclusive-growth’ are the words of choice used by the corporate houses and Modi, in order to justify such blatant violations of basic socio-economic rights. Such violations were hardly uncommon under previous regimes, but they have certainly multiplied since the self-styled ‘Iron Man’ Modi came to power. In seeking to placate major corporations, the two national budgets presented by the Modi regime have prioritized business interests over basic social needs like education and health. India’s healthcare budget, which stood at a measly 1.2% of GDP before Modi took over power, has been drastically slashed by 15% in the 2015 budget. In comparison, China spent 3% and USA 8.3% of GDP in the same period on healthcare. The education budget has not been spared either, with a 16% contraction being announced in the same budget. These clearly contradict the promises made to the electorate during the election campaign only a year ago. At the same time, the government has announced generous tax exemption amongst other benefits for the ultra-rich in the name of stimulating growth. For instance, corporate tax is being cut from 30% to 25% whilst the wealth tax will soon be abolished. At the same time, the service tax has been raised to 14%, which would adversely affect the middle and working classes by increasing the cost of consumer goods. These ‘reforms’ have been justified on the grounds of deficit reduction and fiscal prudence. But in a country where about one third of the world’s 1.2 billion poorest people live, and one which has a HDI ranked 136th in the world, stimulating growth can hardly be used to justify cuts in basic services like health and education, let alone generous tax reductions for the privileged.

Another critical aspect of Modi’s economic policy has been the drive for privatization in order to raise revenue. Public sector companies in India are widely regarded as inefficient, loss-making burdens on the government and the tax-payer. This is arguably in large measure as result of the propaganda and that has been fed to the people by successive regimes. Key strategic sectors such as ports, rail, roads, power, education and health are being handed over to well-connected businessmen despite numerous problems. While some state controlled companies are seeing divestments on large scale (the 2015 budget seeks to raise $13 billion from sale of state assets), others are seeing a gradual starvation of funds, which would ultimately lead to their collapse in the coming years.

In a country like India, where the top 100 richest families account for 25% of GDP, and 836 million people live on less than half a dollar per day, the pro-rich and anti-poor policies of the current regime can hardly be justified. The direction for India in this Parliament is clear, but what remains to be seen is how far Modi will go in undermining democratic rights for the sake of enriching big business.