Modi-nomics and the politics of institutional change in the Indian economy

ABSTRACT

The term ‘Modi-nomics’ gained widespread publicity across India and resonated internationally during the Bharatiya Janata Party’s (BJP) campaign for the 2014 general elections. Named after the BJP’s star campaigner and then Prime Ministerial candidate, Narendra Modi, Modi-nomics refers to his success as Chief Minister in Gujarat, a state richer, with faster GDP growth, more jobs and industry than most other Indian states. The 2014 campaign promised that the ‘Gujarat model’ of clean government and economic competence, could be replicated across the country.

In this article, we identify the promises and premises behind Modi-nomics. We take stock of claims and criticism, drawing on comparative development statistics to discuss a much lauded but also highly contested ‘success’ story. To assess whether Modi-nomics is guiding policy we draw upon Douglas North’s new institutionalism. In addition, we use a sociological understanding of institutions to argue that a central component of Modi-nomics is to achieve economic change by altering perceptions and images as well as policy. However, Modi-nomics remains highly contested within India’s domestic political arena and has unleashed other political entrepreneurs drawing on politics of entitlement (the Patel agitation) or religious sensibilities (the beef ban controversy). To gain resilience, Modi-nomics will have to combine ideational and institutional change and to reconcile the tensions arising in the process.

Keywords:

• Narendra Modi
• Modi-nomics
• Gujarat model
• institutional change
• political entrepreneur

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The IMF reports in its World Economic Outlook an Indian growth rate of 7.3% for 2014 – the same as China. The IMF furthermore predicts India to grow at 7.3% (2015) respectively 7.5% (2016). This would make India the fastest growing market economy – ahead of China with 6.8% (2015) and 6.3% (2016) and well ahead of the predicted global growth rate (3.1% in 2015 and 3.6% in 2016) and the overall growth rate in emerging market and developing economies (4.0% in 2015 and 4.5% in 2016). See International Monetary Fund (2015, p. 2).

2. For details and analysis of the 2014 elections, see: Mitra and Schöttli (2016 forthcoming).

3. On Narendra Modi’s homepage it is claimed to be the ‘Largest Mass Outreach Campaign in Electoral History of a Democracy’ (Modi 2014).

4. For recent biographies, see Marino (2014) and Menon (2014).

5. See the discussion in Fernandes (2014, pp. 12–18) on Modi’s pro-market credentials.

Additional information

Notes on contributors

Jivanta Schöttli

Jivanta Schöttli is Visiting Research Fellow at the Institute of South Asian Studies, National University of Singapore. Prior to this she was interim professor for politics at the Department of Political Science, South Asia Institute, Heidelberg University in Germany. Her PhD from Heidelberg was published with Routledge, London in 2012 entitled, Vision and Strategy in Indian Politics. She holds a Masters in Economic History from the London School of Economics and Political Science. Jivanta’s research interests include India’s international relations in particular with regards to Indian economic diplomacy and India’s strategic and commercial maritime interests in the Indian Ocean. She can be contacted at: [email protected].

Markus Pauli

Markus Pauli studied political science with a focus on political economy and international relations at the Free University Berlin, Berlin, Germany and the London School of Economics and Political Science (LSE), London, UK. Thereafter, he worked as a Project Coordinator for InWEnt (today named German Society for International Cooperation – GIZ). His doctoral thesis at Heidelberg University – within the Cluster of Excellence ‘Asia and Europe in a Global Context’ – explored the perception and impact of microfinance in South India. He is currently a research associate and lecturer at the Department of Political Science, South Asia Institute at Heidelberg University, Heidelberg, Germany. He can be contacted at [email protected].