August 1, 2014

India's Time For Growth

From Forbes

India's Time For Growth
This story appears in the August 18, 2014 issue of Forbes Asia.

Rich Karlgaard
Forbes Staff

I was filled with dread as the giant Airbus 380, which looks like a flying baby Beluga whale, dropped me and 524  other  passengers at Mumbai’s Chhatrapati Shivaji International Airport. Welcome to India, the land of dreams and utter dysfunction. Get ready for a one-hour shuffle through customs, I thought, followed by car confusion and a two-hour drive to the Taj Mahal Palace hotel.

Except that didn’t happen. Passing through customs was a breeze. Getting into the car, I looked over my shoulder at the stunning Terminal 2, possibly the most advanced and certainly the most beautiful airport building in the world. The ride to the Taj took 40 minutes.

These are surface impressions, of course. But if the India of five years ago made one worry that a country so gifted in software could never do hardware—or infrastructure—well, it’s time to rethink that image. The ducks are lining up for India. The world’s largest democracy could blow its advantages yet again, but I don’t think it will.

One reason is Narendra Modi. A Hindu nationalist and leader of the Bharatiya Janata Party, Modi became India’s 15th prime minister in May. He had previously been chief minister of Gujarat, a small northwestern state of 60 million people. During his 12 years at the Gujarat wheel Modi cut red tape and taxes and made Gujarat investor-friendly. The state now leads India in economic growth and employment.

The question is whether Modi’s methods can scale to a country of 1.2 billion. He is, by temperament, strong-willed and not adverse to bulldozing his political opposition. A supply-sider, Modi believes economic growth and investment create the conditions for shared prosperity, not the other way around. In this he diverges from India’s recent leaders and anyone named Gandhi. If you cheer for Modi, you hope he’ll be like Lee Kuan Yew, the father of modern Singapore. Mr. Lee was often criticized for using a strong hand that stretched Western notions of democracy.

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