Economy

No ‘Achhe Din’ Here: The Modi Bubble Has Now Burst

Middle-class youth who supported Modi and gave him legitimacy are now seriously doubting his economic policies. That doubt will soon turn into rage.

Prime Minister Narendra Modi addressing the Sahakar Sammelan, in Amreli, Gujarat on September 17, 2017. Credit: PIB

Prime Minister Narendra Modi addressing the Sahakar Sammelan, in Amreli, Gujarat on September 17, 2017. Credit: PIB

“The economy is in a tailspin. Yes, it can crash. We need to do a lot of good things to revive the economy”. These words are not mine, but Subramanian Swamy’s. Swamy is not a “pseudo-secular” critic of the BJP. He is a disappointed devotee of Prime Minister Narendra Modi who was, only last year, the BJP’s weapon of choice in its assault on Sonia and Rahul Gandhi in the National Herald case.

He is not the only one. Arun Shourie has been warning the country that Modi does not have a clue on how to revive the economy and has therefore turned to the most dangerous form of populism – communal polarisation – in a desperate bid to ensure victory in 2019. Still more scathing criticism has come from former finance minister Yashwant Sinha, whose critique of the government’s unbroken string of economic failures has brought forth no credible refutation, because none is possible.

Swamy is a reputed economist, and the other two are former ministers who have experience and inside knowledge to back their critiques. But what about the Aam Modi Bhakt – urban, educated, middle class and young? Does he still believe that Modi and Amit Shah are crafting a new economy in a New India, that can still bring ‘acche din‘?


Also read: Modi’s Promise of a ‘New India’ Looks Shaky Amid Economic Chaos


The answer has been given recently by Ninad Vengurlekar, a Mumbai-based mechanical engineer and co-founder of a mobile-based education company, who spent a year doing a masters in education technology at Harvard University:

“Why did I support Demonetization?” I was taken over by our PM’s audacity, his resolve, his emotional appeal, and then tears. He said give me 50 days or else persecute me. I thought, if the head of the country is so confident about what he is doing, obviously he knows something that his critics don’t. My support to demonetization came from this trust in the PM. A billion people thought like me. I was not alone.

10 months later, a friend told me, “Bewaqoof banaya Modi ne.” I said,”Shayad”. And we both laughed at ourselves. But did Modi make a fool of the country? Maybe he did. But he never intended to. He was genuine when he believed that there is black money that would be unearthed out of demonetization. It will break the backs of terror organisations. Corruption will be dealt a severe blow by killing the cash economy and digital transactions will be up. Yes, UP elections would also be on his mind.

But I was sure no sane person would put the entire country through discomfort, cause deaths, wipe out incomes of the poor, just to win UP. This was my hunch. My personal reason for support to demonetization was because I genuinely believed that digital transactions would finish the cash economy.

But I was wrong and how. The economic cost of demonetization was never thought through, especially on the poor. Millions lost their jobs, industries closed down, NPAs went up and banks came under undue pressure to recover SME loans. The spiral effect was probably never imagined to be so devastating.

Digital transactions are down. Corruption looks unconquered. Worst, all the so called “black money” has come back to the system. GDP is down to a historic low. And now RBI has stopped short of saying that demonetization was a dare gone horribly wrong.”

Vegurlekar’s is not an uninformed outburst. All the recent signals from the economy are sharply negative: the onset of deflation in agriculture, which confirms the sharp drop in rural buying power caused by the premature return of migrant labour to villages after demonetisation; the CMIE’s recent estimate that 1.5 million jobs were lost between December and April; the shrinkage of commercial bank credit to industry this year for the first time in 63 years; FICCI’s finding that 73% of the 300-plus respondents to its latest survey of industry would do no hiring for at least the next three months; and McKinsey’s finding that more than 35% of the 466-million labour force of India in now severely underemployed, with no secure jobs and no social security.


Also read: Arun Jaitley May Be the Fall Guy, But Modi Is Truly to Blame for India’s Economic Slowdown


Add to this the fact that the investments abandoned by their promoters has risen from Rs 8,60,000 crore in March 2013 to the mind-boggling sum of Rs 11,40,000 crore in 2016, that 40 of India’s most courageous (and possibly foolhardy) entrepreneurs are entering bankruptcy court, and that almost half of the $20 billion of foreign direct investment that has come in during the last year has gone into the purchase of distressed assets by international speculators, and the picture of an unravelling economy is complete.

Union Minister for Finance and Corporate Affairs Arun Jaitley delivering the keynote address, at the India Economic forum, organised by the Bloomberg, in Mumbai on September 22, 2017. Credit: PIB

Union Minister for Finance and Corporate Affairs Arun Jaitley delivering the keynote address, at the India Economic forum, organised by the Bloomberg, in Mumbai on September 22, 2017. Credit: PIB

The harsh truth is that India’s once-envied entrepreneurial class has been all but destroyed, and India is being sold piecemeal to foreigners. It is not the only country that has faced such a tragic denouement by ill-conceived economic policies. In December 1998, a year into the Asian financial crisis, the chief of research at the Siam Commercial Bank, Thailand’s oldest bank, greeted this writer with the remark, “Welcome to the basement sale of Thailand “. We are now witnessing the basement sale of India.

Vengurlekar belongs to the part of the new middle class that was the mainstay of the BJP’s victory in 2014 – not because of its numbers, but because of the acceptability it gave to the party. But he now feels betrayed. What he has voiced is what millions of young people are also feeling.

Modi’s highly-personalised propaganda blitz had kept them quiet so far: “The government cannot be lying to us,” they probably said to themselves. “Maybe it is only me, and a few others like me, who have been unable to find jobs”. That doubt has begun to dissolve, and when it does, Modi and his government will face its inevitable corollary: rage. That was the sentiment that drove the Congress out of power in 2014. It is now rising against the BJP.

Is it too late for Modi to reverse the trend? This question begs an even more important one: does the government even know how to do so? And if it does, then what prevented it from taking the right decisions when it first came to power? Modi may claim, as Jayant Sinha has done, that his reforms will benefit India in the long run by simplifying procedures and making the income-generating classes more accountable to the government. But even if this were to prove the magic bullet the economy has been waiting for, its effects will not be felt in time to save the BJP in 2019.


Also read: Policy Flip-Flops Risk Undermining ‘Make in India’ Initiative, Say Industry Executives


What can and may well save the BJP is continued bickering within the opposition, combined with a total absence of understanding within it of what caused two decades of growth to fail so suddenly in 2012. Till it works that out, it will not be able to offer a credible plan for restarting growth. It will therefore be unable to provide hope to the people who are hurting most – the youth of India. So far not a single opposition party has shown that it has the slightest inkling of how this is to be done. Till one or more of them shows that it does, and offers a policy that the now-sceptical public can believe in, Modi may well continue to reign and the economy to sink.

Prem Shankar Jha is a senior journalist and the author of several books including Crouching Dragon, Hidden Tiger: Can China and India Dominate the West?

  • Ashok Akbar Gonsalves

    As a nation of morons, we deserve Modi. As a people (and here I am talking in general about the educated, social media savvy, mostly urban upper- and middle classes who should have had enough sense to have known better) who have unquestioningly believed everything this man has decreed from the heavenly pedestal that we have placed him on and who have swallowed his melodramatic pronouncements one after the other, we deserve what’s coming to us. We have let ourselves get fooled and lulled by the false Hindutva pride the Modi-BJP-RSS combine has infused in us, like children get fooled with lollipops and dolls. Suddenly, it has become more important to be a patriotic, anthem-singing, government-loving, minority-hating, inconvenient-history-erasing Hindu, than to have proper education and enough jobs for our children.
    What a fall for a country and people with such great potential!
    Yes, he will most likely come back in 2019 because the opposition is a disgrace.
    And that’s fine with me, because more than Modi and his government, it is we the people who must be taught a lesson.
    Because we have got what we deserve.

    • Amitabha Basu

      You are justified in being cynical, that we got what we deserved by electing Modi to office. However, please remember that many, or maybe most, of us did not vote for the ‘kamal ka phool’, and that many who did are getting disillusioned, maybe not fast enough for 2019. But those of us who have an alternate vision for India must speak up, write and encourage the silent and sceptical majority that if they speak and stand up against the clear and present danger, there may be a better future in store for us.

      • Ashok Akbar Gonsalves

        Hello Mr Basu, I do indeed remember that the BJP got only 31% of the popular vote and am sometimes encouraged by that. But the operative phrase here is “maybe not fast enough for 2019”, particularly given the timidity and stupidity of the opposition.
        My fear is that we will break free from this meticulously constructed, unquestioning thrall of one man only in 2024, by when the nation is in economic ruins, our children jobless degree holders, social unrest prevails and communal fires have been lit all over. Perhaps then – one hopes! – we will come to our senses, and the opposition would have got its act together, for the healing process to have any chance to begin.
        Till then, we must keep speaking up, grit our teeth and bear this punishment.

        • joy

          I do not foresee any quick turn around to this, the genies let loose on the minds of common folks will aquire a life of their own modi or no modi. This is going to get a lot worse before it gets better. And even then it will not be anywhere near same again.

          In certain ways we would have lost our innocence for good by the time this is through.

          But then a civilization goes through many a tumult like this and evolves in it’s own ways for better or worse.
          It will for sure impact beyond our life times.

          Well, who has been able deny time it impacts, we could simply fight our little wars and hope things end better than what is playing out as we walk today.

    • Chandran

      You have very little time window to rant against Modi govt. You’re making best use of that limited time. It will not be long before economy picks up.

    • Chandran

      Keep complaining since you have a very small window period before the economy roars.

      • Ashok Akbar Gonsalves

        Yes, I sure will. Nice of you to be so encouraging.

  • Marvin Gaye

    Finally the voters deserve what they get. The bjp can easily inflame communal passions and is already nurturing its vote bank. It has now understood the arithmetic behind winning election. It won a brute majority with only 30 percent of votes. Now with a nonexistent opposition it might win more seats with lesser votes. The door buster sale of India will truly be over by them. One nation, one market.. for whom exactly? We all know it is for the corporates.

  • Chandrasekaran

    The acid test of NDA’s inability to reach poor for the last three years, which is on display has left huge disappointment to the public. The castles built in air start vanishing. Why and How did Modi fail has become a national debate, albeit with the contrary claims of achievements of the maximum governance. The corruption plank which catapulted Modi to centre stage looks highly anaemic with income returns submitted only by 18 ministers ! Modi’s veto looks too feeble on cow vigilante. The gross failures in UP, MP, Haryana and Rajasthan pull down the rating of BJP. The same side goals of Yashwant Sinha, Gurumurthy, and Subramaniyan Swamy portray NDA’s rule in dim light. The saner counselling of Swaminathan, and Amarthyasen which Modi turned down has resulted in Indian economy sagging beyond level. .

  • Ashok Akbar Gonsalves

    Yes, mea culpa! Lovely name, btw! 🙂

  • Ashok Akbar Gonsalves

    Yeah, right. And you are showing your perpetual delusion.

  • Ashok Akbar Gonsalves

    Irrelevant. BJP got well below 50% of the popular vote, which means most of the nation did not support it.

  • Ashok Akbar Gonsalves

    Sad but true.

  • Ashok Akbar Gonsalves

    Just read some of the comments and you will realize how right you are.

  • Ashok Akbar Gonsalves

    You obviously live in a different world.

  • Ashok Akbar Gonsalves

    Right, I know – he has made you proud of being an Indian.

  • Ashok Akbar Gonsalves

    He is desperate, no doubt about that.

  • Ashok Akbar Gonsalves

    Yes, no doubt he is a good “roarer”. If only roaring could lead to good governance.

  • Deshaabhimaani Damodardas Subo

    What kind of a Man shri Modi could be, if he listens to the fool of a mechanical Engineer of that idiotic organisation and economic philosophy called Arth Kranthi from Pune, With ideas that resemble more a sexual fantasy than economics unheard of from any sane economist, and gambles with the future of a country of 1.3 billion people?

    This prime minister would bulldoze the sane advise of one of the sanest economists that ever headed the RBI, listens to this fool from Pune, does not consult any other of the hundreds of sane men with knowledge of economics but also love him as his fans, does not trust his own cabinet members and shepherds them to a meeting hall and gives a lecture to them before lecturing the country announcing demonetisation of a scale and severity that the world has never seen before!

    What does he think of his ability to grasp economics of a country as big as and as ancient and diverse as India?

    Where does he get his acumen and knowledge that gives him such confidence to ignore everyone and everything he is bound to listen to and consult as per the constitution?

    Not the Board of the RBI, not the cabinet, not the opposition leaders, not any past or present ministers of finance of India, not his predecessor prime minister Shri Manmohan singh, not the President of the Country in Office, not a past and present comptroller and Auditor General, not anyone from IMF OR WORLD bank or Bricks Bank?

    He trusts this fool of economic sexual fantasies from Pune that has so many delusions and illusions and masturbates with outlandish thoughts of a new world order of economics?

    What does give this prime minister that KIND of confidence about his own ability to ignore and distrust everyone but this fool and may be some sycophant IAS FELLOW from Gujarat days, or a psychopath secretary ?

    Where does he think his wisdom comes from to trust this one fool every sane economist of any training and education would dismiss as an idiot with delusions and fantasies more akin to sexual dreams and desires than economics?

    Does he get it from his days of humble upbringing as a very normal child, or as a young man helping his father run his Tea shop making and dispensing Chai, or his Rss pracharak gurus or work as a pracharak that gave him what little education and knowledge he has about the world and India, or the bunch of thoughts of she late Guru Golwalkar, or his political mentors in the BJP office in New Delhi before he was sent to Gujarat?

    Why is he not humble enough to leave economics to economists by telling them his politics and seek their prescription for achieving his political philosophy, be it of RSS OR OF WHAT little acumen he acquired as a normal sane ordinary Indian and as an rss pracharak that has seen some down to earth life?

    How can he gamble the present and future of the economy of a nation of 1.3 billion people based on his quirk belief in a fool from Pune that has zero training and education in economics or politics?

    That fool may know some gears and livers of mechanics, he may know some physics, he may know some mathematics but how would he know economics?

    Is it not very dangerous for this country to have such a gentleman as prime minister?

    People of India, intellectuals of India, economists of India, politicians of India, civil servants of India, educated patriots of India, you all have a duty to study and understand the thought process, the life background, the different training and life experiences this person named shri Narendra Modi, the Prime Minister of India has acquired over the course of his life and their relevance and fitness that enable him to preside over the destiny of this great and ancient country of 1.3 billion people in the manner he does, and he did in Gujarat in 2002, before and after , and india since 2014.

    If you don’t do that duty of your’s , it is only history and future that will be left to do that job! But they will not only judge shri Modi and his policies! They will judge you too!

    And also will be judged the innocent and/or ignorant men of Nagpur! Your thoughts for this country may be noble, but your actions in putting this Man in charge of this country will be judged minutely in this world, and in the world above!

    You can not plead ignorance and innocence before history or God!

    Be ye know that sir!

  • Ashok Akbar Gonsalves

    You are missing the point I was trying to make. The ineptness of the opposition is a completely different matter. My point was that why are we – the people – not holding this government accountable for its failed policy decisions, why are we not asking it tough questions and putting pressure on it to perform instead of diverting attention from issues that matter with its stupid communalism and Hindutva narratives. It takes us for fools and we are proving it right.
    Why should the absence of a political opposition stop us from protesting against the government’s mistakes?

  • Ashok Akbar Gonsalves

    All standing in line together is unity?
    Our economy has become cashless to a great extent?
    Grow up fast, young man. And learn to think for yourself.

  • Ashok Akbar Gonsalves

    You have spoken personally to the man on the street, have you? Why dont you read the many articles in The Wire that vividly describe the man on the street’s “voice, presence and hope”?

  • Ashok Akbar Gonsalves

    Inspired by North Korea, arent you?

  • Ashok Akbar Gonsalves

    I think you are right. The “Rohingya model” is what this government, prodded on by the RSS and its other saffron tinted ideological mentors, wants to implement when it comes to our minorities. Which means – no citizenship and therefore no rights, live a ghettoized life at the rough edges of society, at the mercy of the puffy chested Hindu majority who will then loudly claim that “Modi has made us proud for the first time ever in history” or some such infantile nonsense.
    While 25 year olds go knocking from door to door looking for the jobs promised by “Achhe Din”.

  • Ashok Akbar Gonsalves

    Long term? Sure. Try selling that to the young men and women with useless degrees looking desperately for a job, and see what they do with your “long term”.

  • Ashok Akbar Gonsalves

    “The only avenue we, the people, have to express displeasure of the government’s lack of performance, is during the elections.”

    No. That might have been true many years ago, but not anymore. With various social media forums available, it is no longer difficult to express visible displeasure at the government, nor to mobilize people to show collective dissent, even between elections. Why should we wait five years to show our annoyance?

  • Ashok Akbar Gonsalves

    The Wire has published enough reality check articles on the state of the economy, the havoc wreaked by demonetization with very little or at best dubious benefit, how the jobs have dried up etc. Please read them and you will get the response to your specific points.

  • Ashok Akbar Gonsalves

    Are you his mother, by any chance?

  • Ashok Akbar Gonsalves

    “Long ranging effect”, meaning long term? Ah, of course – that’s the new spin now, isnt it. Didnt Modi puff his chest in Nov and scream “mujhe sirf 50 din dijiye”? Now that has changed to long term? And try consoling desperate job seekers with this long term “time series moving averages” nonsense and see what they do with it.

  • Sajal Aggarwal

    hahahahaa