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Article prophesising and diagnosing doom on the Indian economy: https://time.com/6969626/india-modi-economy-election/
Some of it is really staggering - 10 million manufacturing jobs were lost even before Covid. Indian manufacturing employment halved in 5 years (up to 2021 but doesn't seem to have recovered that much, though output is rising). Even in output it's still quite low as a % of the economy, falling as a proportion the 2010s. Meanwhile there are 60 million extra farm workers: deurbanization and deindustrialization. India is at the bottom of the Global Hunger Index, below North Korea and above Afghanistan.
I note that the article author wrote a book on Modi despotism so can't be considered unbiased, yet he has a lot of pretty ominous links. Some of them are structured in a deceptive way - 'crude imports' being down 14% goes against the article's overall message of trade increasing, even if goods exports decreased. It's always good to read these kinds of articles with a sceptical eye, economics is so broad that you can paint all kinds of pictures. It looks like India is focusing very heavily on services rather than manufacturing, leaving it rather vulnerable to AI disruption, as self_made_human has predicted. Vietnam exports more manufactured goods, while India's overall exports are much higher.
There's also this fun website that graphs exports by type: https://atlas.cid.harvard.edu/explore?country=104&queryLevel=location&product=undefined&year=2021&productClass=HS&target=Product&partner=undefined&startYear=undefined
India is ICT nation, the tech support stereotype. China and Vietnam do manufacturing. Russia and Australia dig things out of the ground. The US does services and manufacturing.
Experts without specific takes are the worst bunch. If Modi hating is your full-time job, then have your attacks honed to perfection. These 'everything is horrible' articles are exhausting and teach you nothing.
"India's is doing badly because Modi......" Come on, keep going. Modi how ? What specific policies did Modi enact that ruined the economy ? What alternatives does the opposition propose that will fix the economy ?".
IMO, This article correctly points out the main challenges to economic development in India.
(quotes from the article)
Simplifying tax laws means consolidating the tax code at the national level. States see this as a powergrab and Modi gets termed a fascist.
Judicial reform requires parlimentary inference in the indepdendent judiciary. Democracy watchers view this as a powergrab and Modi gets termed a fascist.
Non-BJP states have among the strongest labor protections in the nation (Delhi, WB, Kerala, Bihar, ex-UP, ). When BJP regains control, it tries to weaken them. Ofc, he gets called a corporate sell out.
Modi has many failings. I would be sympathetic towards the opposition if they agreed with informed economists on Modi being too-left wing. Instead, critics of Modi call every pro-market move fascist and his political opposition encourages dragging India back to Nehruvian-era socialist isolationism.
To avoid being hypocritical, here are his specific failings from my perspective.
Lack of eggs (protien) in school diets
India uniquely underperforms on child wasting. The reason goes back to 1970s and the introduction of the wheat, rice & simple carb heavy diets post green-revolution. Under-nourishment is low because because peopel get sufficient calories. However, the lack of protien causes child-wasting.
Indian farm laws massively subsidize wheat, rice and simple carbs, and that's all poor families can afford. Modi tried to fix this by removing grains-specific subsidies in the 2019 farm-bill. This bill recieved massive push-back from opposition and the elite global left for being anti-farmer. Under pressure, Modi's revoked the bill. This was his first mistake.
We need more eggs in school lunches. More protein. Modi hasn't done anything towards this, neither has anyone else.
Demonetization
Demonetization (2017) was a disaster. It is known. That being said, the article primarily focuses on post-covid recovery (or lack there off). India's economy is in a recent (2023-24) rut. I don't have an answer to what recent change has caused this.
Unsufficient progress on ease of doing business
Land acquisition
Modi has failed to pass the land acquisition bill over 2 terms. It has been touted as the biggest impediment to doing business in India. Modi claims he will bring the reforms in during a 3rd term. But he had a big-enough mandate from 2019-2024. The reason for this failure, was due to global and national pressure because the bill was percieved as anti-farmer.
Judicial reform
The slow moving judiciary is the 2nd biggest impediment to doing business in India. India's judiciary is full independent, so the Govt. doesn't have much power here. Afaik, there is massive resistance to any Judicial reform by the Modi govt. So both sides continue to be in an uncomfortable marraige, while cases pile on.
Simpler tax codes
Modi hasn't exactly failed here. It is more so that he hasn't pushed enough. GST was implemented, good. It remains unpopular among the opposition, the left and the global elite. But, he got it through However, other campaign promises remain in 'draft' phase... Overall, I find this to be an insufficient reform. Good start, but taxation remains insanely complex.
Overall, I remain cautiously bullish on India.
From a resource standpoint, it is agriculturally self-sufficient, has an incredible appetite for solar power and has an adequate water supply. Societally, it has strong family structures, a commitment to education and a stable fertility rate. You can't underestimate the long term benefits of this.
Some tax reform, eggs and weaker labor laws should keep India over water for the next decade. If the ease of doing business genuinely improves, then we might just be in for a bumber decade.
If India misses this decade of population-pyramid perfection, then we're FUCKED big time.
Good points. India's fertility is anything but stable though. There's getting old before you get rich and then there's getting old before you're out of poverty. https://data.worldbank.org/indicator/SP.DYN.TFRT.IN?locations=IN
I have no problem with Modi personally, running such a big country democratically is a big ask. US democracy is not exactly high performance governance, how is anyone supposed to manage 4x the population with a small fraction of the wealth?
IMO India needs to follow the standard industrial route out of poverty. Special economic zones, foreign investment, light industry -> heavy industry -> high-tech industry and then services. Doing this in a democracy is very difficult, as you point out. Getting the tax and judiciary right is easy for autocracies, hard for democracies. Plus there's an excessive focus on IT and software. Software is all well and good but what about hardware? What about making the solar panels? Without manufacturing there's no firm base for development, skipping from agricultural to service-economy has never been done AFAIK. Vietnam has been on the right path and is pulling ahead.
https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=IN-VN
Agreed on all counts. There are zero real democracies that have managed a transition from poverty to wealth. They all grew as autocracies and converted to democracies once stable.
India is unlikely to become autocratic, but the current setup has too many checks and balances. I am a big proponent of reducing states rights and opening the judiciary (primarily by allowing fast track appointments for those who excel at standardized testing , setting targets for case clearance as part of promotions and limiting the supreme court to matters of constitution, rather than morality).
That's a good start. India has fair elections. Let those elected to the parliament choose the path for the nation. Too much beaurocracy is no good.
Zero?
Iceland, Ireland and Finland come immediately to mind.
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