.Authoritarianism and intolerance cloud the record

The third anniversary of Narendra Modi being sworn in as prime minister was celebrated on May 26 with all the bombast that has come to characterise a nationalist administration built around the image of one man, backed by his chief henchman, Amit Shah, the arch Hindu-nationalist president of Modi’s Bharatiya Janata Party.

Modi went to Assam in the north east of the country to open India’s longest bridge and, along with statements from Shah and various ministers, paraded a series of extravagant claims about what has been achieved in the three years. Many of the assertions are difficult to verify, whereas critics produced an array of more easily accessible points on which the government has failed, not least on the growth of authoritarianism and intolerance that does not fit with the traditions of a country which prides itself on being the world’s largest democracy.

PM Modi Dhola-Sadiya Bridge Assam

Narendra Modi at the Dohla-Sadiya Bridge in Assam

The most telling event of the day demonstrated how priorities focus on Hindu nationalism, even if that runs counter to the country’s economic interests. This was an announcement of a ban that had been gazetted earlier in the week severely restricting the sale of cattle for slaughter at livestock markets and animal fairs.

Billed as a protection of animals measure, it in effect supported opposition to beef eating, which the BJP’s more Hindu fundamentalist and sometimes violent activists have been spreading across the country with bans on the slaughter of India’s sacred cows.

The measure included buffaloes, which are widely eaten as beef, as well as other cattle. This will hit Muslim meat and leather traders, as well as many farmers who raise money by selling cows for slaughter after they have ceased producing milk. Experts have warned this could upset the economics of milk production and undermine India’s $5bn a year buffalo meat export market.

Kerala’s Left Democratic Front government condemned it as a “fascist and anti-federal move” adding, in a reference to people even being killed by beef-ban vigilantes, “Cattle slaughter becomes illegal at a time when manslaughter happens in the name of cow”.

That political jibe illustrates how the government’s critics believe its primary aims are slewed towards the Hinduisation of India, even though Modi’s top priority is building an economically strong India that earns respect and influence internationally.

Foreign policy lapses

Today (May 29) Modi flies to Germany for two days of talks with Angela Merkel, the  German chancellor, and her ministers, and will then go on to Spain and Russia. His foreign trips and overall policy have not yielded the gains that had been hoped when he made high profile visits around the world in his first year in office. Many multi-billion dollar promised deals and investments have failed to materialise.

Good rapport with President Obama did however help to strengthen relations with the US, while growing ties with countries to the east, notably Japan and Australia, could form the basis of a bulwark against China’s aggression.

Modi has tried to counter China’s wooing of India’s immediate neighbours, and has achieved some success with Bangladesh and Sri Lanka, but he has been inconsistent in dealings with Pakistan and relations have worsened. This has exacerbated instability in India’s northern state of Kashmir, which is mired in the worst social aunrest for many years with the government doing little to ease tensions.

At the same time, Modi seems to have abandoned attempts to develop co-operative relations with China, which holds virtually all the cards in the bilateral relationship and can use its closeness with Pakistan to destabilise both that country’s relations with India and life in Kashmir.

On May 26, Modi tweeted that his three years in power had seen concrete steps that had “transformed” people’s lives. “Sath hai, vishwas hai, ho raha vikas hai”  – “There is cooperation, there is confidence and progress is being made”.

Insufficient energy

The economy is strong with around 7% growth and various measures are in train such as the introduction of a long-delayed goods and services tax, but the contrasting view to what Modi said has been summed up well by Martin Wolf, who has been studying IndiA for over 30 years and is widely regarded as one of journalism’s best economic commentators.

Writing in the Financial Times, he says that the government “has shown insufficient energy in tackling both the immediate problems of inadequate private investment, excessive debt and feeble banks, and the longer-term problems of dreadful education, lousy healthcare, weak infrastructure, corruption, regulatory incompetence, excessive interference and government waste”.

Modi has posted graphics on various sectors such as agriculture, mobile banking, tele-density, women empowerment, electrification, and solar energy and included some of his favourite branded schemes such as Make in India and Digital India.

Make in India is said to have generated a “giant boost” to investments in electronic manufacturing that has multiplied ten times. There is however little evidence that the campaign has had much success in its primary aim of boosting manufacturing industry jobs, even in the defence manufacturing where there is most potential.

LocalCircles surveyA survey (left) of 40,000 people in 200 cities by LocalCircles, a social media organisation, found that only 8% thought Make in India had been the most effective campaign, whereas 47% voted for a direct benefit transfer scheme that pays subsidies via bank accounts.\

On Digital India, Modi’s tweets claimed that the country’s optical fibre broadband network had increased to 205,404 kms from just 358 kms in 2014, but a recent study by the Centre for Equity Studies shows that much of what was promised three years ago has not materialised. Only 37% of the optical fibre needed to reach 250,000 gram panchayats (village and small town councils) has been laid.

One of the biggest failures has been cashing in on what is called India’s “demographic dividend” with two-thirds of the population under 35 and providing jobs for new entrants in India’s labour market.

Writing on thewire.in news and analysis website, M.K. Venu, a leading economic columnist, says that there has been a “sheer decline” in the creation of new jobs in the organised sector which includes textiles, metals, leather, gems and jewellery, information technology, call centres and automobiles from an average of 950,000 a year between 2009 and 2011 to 155,000 in 2015 and 231,000 last year. Venu reckons that unorganised small business new jobs will have followed a similar trend.

Corruption 

Modi repeatedly says he has “zero tolerance on corruption”. That seems to have had an impact on central government ministers and the top grades of bureaucrats, but not on the lower levels of government employees, nor in most state governments. A new bankruptcy code could have some impact, but the government has made no attempt to introduce a Lok Pal anti-corruption ombudsman that was planned by the last Congress government.

There is also scant evidence that its dramatic demonetisation project last November, when the validity of 86% of bank notes was cancelled overnight, has had a permanent effect on corrupt deals, money laundering and general graft, though there are some reports of, for example, real estate companies being more cautious about taking large payments in cash.

Piyush Goyal, minister for power, coal, and mines, reports that the number of villages without reliable access to electricity has been reduced from just over 18,000 in 2014 to around 4,000, and says he is aiming for the whole country to have round-the-clock access to electricity by 2019, three years ahead of an official government timetable. There is however no way that power will be in widespread use throughout the villages, even though it if it reaches them.

Overall, the LocalCircles survey showed that the 44% of the people said the government had met their expectations with 17% saying the expectations had been exceeded and 39% being dissatisfied.

The real question however is whether Modi will be able to say in two years time that he has delivered on what he was elected to do, namely change the way that India is run by making the machinery of government cleaner, more effective, and less bureaucratic, and whether he has created jobs and opportunities for the young.

“My prime minister is focused on speed and scale, he doesn’t like small targets,” Goyal told the Financial Times.

That must also mean that he does not like slow small results, which inevitably leads to extravagant claims of success, but there is no other national leader, or potential leader, to challenge Modi. The political opposition is weak, despite a current attempt to unite on the choice of India’s next president, so he is on strong ground.

Currently it looks therefore as if the BJP has a good chance of being re-elected in 2019. No-one knows however whether the growth of often intolerant Hindu nationalism, which horrifies India’s liberals and strikes fear among Muslims and some other minorities, will affect people’;s judgement on how well Modi has done..

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Sotheby’s New York and Pundole in Mumbai scored in recent sales 

Christie’s yesterday scored at its annual early summer auction in London of South Asian modern art with sales totalling £5.9m ($7.66m) and over 90% of the 69 lots finding buyers. This helped to rebuild its regional reputation after a poor auction result in Mumbai last December and a subsequent cost-cutting decision to stop holding the high profile annual event in the city.

tyeb_mehta_untitled woman on rickshawThe top work yesterday was by Tyeb Mehta, one of India’s most famous and successful artists of the 20th century, whose 59in x 39in untitled oil on canvas (right) depicting a woman on a rickshaw was bought by a leading collector from India with a hammer price of £2.3m. Mehta often focused on social issues, saying “the rickshaw is not a simple means of transport, but a sign of bondage”.

That £2.3m comfortably exceeded the top £2m estimate and, with a total (pre tax) price of £2.74m ($3.56m, Rs19 crore) including buyers’ premium, set a new world auction record for the artist, beating his previous high of £1.97m ($3.24m) set in 2011.  

A total of 14 lots sold above $100,000, but there was nothing apart from the Tyeb Mehta above £300,000. This illustrated the problem that auction houses face finding works that are fresh to the market. Some auctions did badly two or three years ago because they were recycling works from trade sources, and that led to the current focus on new collections. Christie’s and other auction houses are also tempting bidders by trimming over-ambitious pricing and are accepting bids that are lower then low estimates.

“The auction saw one of the highest rates of participation from new clients in the past years, which is likely related to the fact that the majority of works offered were  hitherto unseen on the auction market and consigned from important private collectors,” said Sonal Singh, Mumbai-based director, Christie’s India.

Souza the-herald Saffrnt

Painted in 1994, the Tyeb Mehta had been in an Indian collection and was being auctioned for the first time. Another of his works, Thrown Bull, that sold for £245,000 had been hidden away for many years in Oxford University’s Nuffield College, being passed from room to room by those studying there.

A rare work (left) by F.N.Souza, another leading artist from Mehta’s generation, has been sourced from South America for an on-line auction being staged between June 6 and 7 by Mumbai based Saffronart.

Titled The Herald, this 48in x 23in oil on canvas dates from the early 1960s when the artist often focused on Roman Catholic subjects. Having been owned by a South American collector for decades, it will be facing its first auction and has been given a broad $300,000-$500,000 estimate to test the market.

Christie’s decision to abandon its annual Mumbai auction after only three years and focus instead of two South Asian auctions a year in New York and one in London was part of a slimming down of its international operations, which are increasingly focused on the Chinese market. It is closing one of its London locations (in Old Brompton Road) and reducing its activities in Amsterdam. A market rumour suggests that François Pinault, the French luxury goods magnate who owns the auction house, is readying it for sale to a Chinese buyer.

It is also increasing its on-line sales for lower-priced works. This week its annual Arts of India antiquities auction, which yielded £1.7m, was accompanied by on line auction called Painting the Maharaja of 32 mostly 19th century portraits that sold for a total of nearly £128,000.

Part of the pressure on Christie’s and others to find new works stems from an increasing number of auctions run by Indian businesses.

That is in addition to Sotheby’s, which had a highly successful South Asian New York sale two months ago totalling $6.56m with only four of the 59 lots not being sold.

Pundole Buddha April '17Most of Sotheby’s works were sourced privately from European and American collections, and works by M.F.Husain, another of the Mehta and Souza generation, did specially well. “The freshness, high quality, provenance and condition really are reflected in the both presale interest and in the final sale results which exceeded our expectations” said Yamini Mehta, who heads Sotheby’s for South Asia.

The Indian auction businesses include Pundole, Delhi Art Gallery and Osian’s, which all held sales in Mumbai last month. Osian’s was making a rare  reappearance after years of financial problems.

Pundole’s had a specially successful auction, producing a total hammer price of Rs33.8 crore ($5.3m) for 82 lots with only three not sold. That included Rs6 crore ($930,000) for a Tibetan gilt bronze Buddha statue (above), which was a record for any antiquity in an Indian auction.

Collectors also go for the unusual, as was shown yesterday at the end of Christie’s auction, a set of 54 playing cards depicting work by South Asian artists conceived for the British Council in Delhi, took the bidding in three minutes from £60,000 to a hammer price of £230,000.

maqbool_fida_husain_untitled_d6072678g

The Christie’s auction included three collections of smallish pencil and gouache on paper works by M.F.Husain – this collection fetched £22,000

Could Narendra Modi do the same in 2019 with acche din?

LONDON: Any political leader must envy Theresa May, Britain’s prime minister, who looks as though she has already virtually won the UK’s general election, even though it doesn’t take place for another month, without promising anything more than “strong and stable government”.

She has avoided being questioned by the media and by critical voters, and has not explained how she is going to deliver stability as Britain approaches its Brexit destiny – apart from showing that she will be as tit-for-tat tough and horrible as she deems necessary with European Union negotiators. The Conservative Party manifesto, due out in a day or two, will provide some clues on policies, but victory has been virtually assured by big victories that the party won in regional and local elections last week.

May ought to be challenged by a coherent opposition that would attack her hard negotiating line and argue that astute and flexible political footwork could work better in Brussels, but there is no such challenge. Instead, county council and mayoral elections results declared on May 5 showed the decimation of both the leftist Labour Party and rightist UK Independence Party. Support for the strongly pro-European Scottish National Party declined and was insignificant for the middle-of-the road Liberal Democrats.

REUTERS_Britain27s-Prime-Minister-Theresa-May-speaks-outside-10-Downing-Street-May 3 '17

Theresa May attacking European leaks and leaders outside 10 Downing Street after seeing the Queen on May 3 – Reuters photo

Flip forward exactly 24 months to 2019 when Narendra Modi, India’s prime minister, will be coming to the end of India’s next general election campaign, five years after he and his Bharatiya Janata Party won a landslide victory on May 16, 2014 promising acche din (good days).

Imagine that the BJP has set the stage, as has happened for May in Britain, by winning most if not all of the important assembly elections that are due to take place between now and then in Gujarat, Karnataka, Rajasthan, Madhya Pradesh and Chhattisgarh.

The Congress Party will probably still be fumbling its way to ignominy as it procrastinates about how to side-line or even dump the ineffectual Gandhi dynasty. It would therefore be unable to muster voter support, while non-BJP regional party leaders in Bihar, West Bengal and elsewhere could well be failing to unite with a serious challenge, despite various current attempts to get together. The Aam Aadmi Party run by Arvind Kejriwal, chief minister of Delhi, which has been seen as a challenger to established patties is already on the skids.

This weak opposition is a parallel factor in the UK and India, with the Labour Party being unable to garner votes under the ineffectual leadership of arch left-winger Jeremy Corbyn. Just as India’s Congress Party has failed to grapple with the Gandhi dynasty issue, Labour has procrastinated for too long about dumping Corbyn. Some Labour MPs have deserted him and are not standing in the general election.

Modi will certainly be offering “strong” government in 2019, but it will be an open question whether the country will be “stable”, given the BJP’s Hindu nationalist base and apparent determination to turn India into a Hindu-dominant and more authoritarian country.

May is offering to implement “strong” delivery of Britain’s exit from Europe, but it is highly questionable whether it will be “stable” because she has shown no ability in her political career to compromise. Indeed, she could well be leading Britain into two years (the official time for negotiating Brexit) or more of turmoil.

May Juncker-798885

Theresa May welcomes Jean-Claude Juncker before their disastrous dinner

Insults have been flying between Downing Street and Brussels, especially since European officials leaked details of a private dinner party in 10 Downing Street, the office and home of Britain’s prime minister. The chief guest was Jean-Claude Juncker, the outspoken former prime minister of small state of Luxembourg who revels in the limelight of his current job as president of the European Commission, and who the British media portray as an excessively jolly and mischievous heavy drinker.

Juncker said he was “10 times more sceptical” about a successful negotiated settlement after the dinner, and was reported to have told Angela Merkel, the German chancellor, that May was existing in a “parallel reality” and a “different galaxy”. That prompted Merkel to say that Britain harboured “illusions” about what could be achieved through Brexit. Relations worsened when The Financial Times revealed Britain could be asked to settle a €100bn bill to cover outstanding EU liabilities before Brexit. Juncker then unnecessarily stirred the pot by provocatively telling a conference in Florence that he would speak in French because “slowly but surely English is losing importance in Europe”.

May responded by accusing Brussels officials of interfering in the British election, adding that “there are some in Brussels who do not want these talks to succeed, who do not want Britain to prosper.” Her remarks carried special weight because she made them standing in Downing Street just after she had been to Buckingham Palace to tell the Queen formally that parliament had been dissolved for the election. She was of course capitalising on the Juncker attack and Merkel comments to win votes by strengthening anti-Europe views among the British electorate. Her remarks will however not be forgotten by Juncker and his anti-UK comrades.

Europe’s leaders will however probably feel slightly more relaxed after Emmanuel Macron’s victory in France’s presidential election that has emerged today. His opponent, Marine Le Pen, the far-right candidate, would have wanted to take France out of the European Union, seriously undermining the future of Europe’s unity.

No challenge to Brexit

Viewed from India before I travelled to London ten days ago, it seemed odd that no political party was challenging Brexit and arguing that Britain should stay in Europe and that, if elected, it would recant on last year’s narrow pro-Brexit referendum result and on May’s recent triggering of Article 50 that launched the exit negotiating process.

I now realise that, though a majority of Conservative MPs in the outgoing Parliament are pro-Europe “Remainers”, many of them have constituents who are pro-Brexit, so have been unable to mount a Remain campaign. The Labour Party is similarly in no position to do so, nor it seems is the worthy but minority pro-European Liberal Democrats. These Remainers are now merely calling for a referendum when the negotiations are completed, vainly hoping it seems that this would keep Britain in Europe.

It is therefore clear that the UK does not face a stable future, at least for the next few years. May’s government will almost certainly be stable because it looks like having a substantial parliamentary majority, but there will be little stability about the country’s economy as foreign companies turn to the European mainland for investment locations, and countries like France and German launch bids to steal London’s role as a prime financial centre. There will also be little stability about its relations with Europe if May interprets her promise of “strong” government to mean being a belligerent negotiator.

Modi is more politically agile and is a far better orator and image builder than May. He was elected because the country was tired of the Gandhi clan’s failings. Aspirational youth in particular wanted a prime minister who would produce jobs and the possibility of a successful life. They were not however voting for Modi’s Hindu ideology, which means that he has two years to produce the economic advances and the acche din the electorate wants.

Similarly, voters who propel May to her landslide victory on June do not want what they are likely to get – strong government but little stability.

Place names and Dalai Lama visit are China-India’s latest weapons 

Usually outclassed by China, India scores a few points

While international attention has been preoccupied with Donald Trump and his reactions to North Korea’s nuclear capability and the war in Syria, India and China have been provocatively needling each other over their long-running and potentially explosive border dispute in the Himalayan mountains.

The world need not worry however because, instead of nuclear strikes or even, as often happens, troops crossing the undefined border, China last week issued new names for places in India’s north-eastern state of Arunachal Pradesh, which it claims as its territory. This was in response to India allowing the Dalai Lama, the Tibetan Buddhist spiritual leader who lives in India in exile, to go to the state earlier this month for a high profile eight-day pastoral tour.

Dalai-Lama_reuters.jpgIndia is not strong internationally and does not often score against China, its larger and more powerful neighbour. China usually has the upper hand – for example by blocking India’s membership of the little-known but significant Nuclear Suppliers’ Group in Geneva, and encircling India by developing close relationships and investing in countries that India regards as its bailiwick. China is also planning a massive One Belt One Road economic trading and transport corridor between Asia and Europe that has exposed India’s diplomatic weakness because the government does not know how to react.

India has however scored three times this month, firstly by allowing the Dalai Lama to go to Arunachal which China calls Southern Tibet, and then by laying out the red carpet in quick succession for state visits by Sheikh Hasina, the prime minister of Bangladesh, and by the president of Nepal. China is constantly trying to wean away these two Indian neighbours.

Last year, China undermined India’s regional role by striking $25bn agreements with Bangladesh, including the supply of two submarines. India struck back during Sheikh Hasina’s visit with a $9bn bundle of agreements including $4.5bn line of concessional credit. India also scored a point with Nepal by persuading it to scale back a ten-day military exercise with China that was taking place during the president’s visit.

China invests $2bn in Bangladesh gas

Today however it has been announced that two Chinese corporations are buying Bangladesh gas fields that account for more than half the country’s total gas output, with a price tag of $2bn, from Chevron. This is specially significant because it is China’s first energy investment in South Asia.

China showed unusual irritation, even anger, over the Dalai Lama, who has led a largely uncontroversial life in northern India since he fled from China in 1959. It always objects when he receives high profile welcomes abroad, which sometimes leads to countries such as the US and UK toning down the reception he receives.

Dalai Lama in Arunachal Pradesh

He has previously visited Arunachal six times since 1959, the last being in 2009, and Beijing always issues strong and ineffective complaints. This time it stepped up its (again ineffective) protests by summoning India’s ambassador in Beijing to warn, as the foreign ministry spokesperson put it, that it would “take necessary means to defend its territorial sovereignty and legitimate rights and interests”. India should “immediately stop its erroneous move of using the Dalai Lama to undermine China’s interests” because, by permitting the visit, it had “escalated the boundary dispute” between the two countries.

China claimed that Narendra Modi had allowed the Dalai Lama to go to the area or the first time in nine years in order to provoke Beijing (at a time when relationships have been worsening), which of course India denied. The visit was specially sensitive because the Dalai Lama was boosting his role as the people’s spiritual leader with a long road journey through towns and villages to a monastery at Tawang that is the focus of Beijing’s territorial claims.  A day before he reached Tawang, where he had stayed when he fled from China, the official China Daily warned that Beijing “would not hesitate to answer blows with blows” if he was allowed to continue, which of course he was and did.

China retaliates

The more controversially outspoken Global Times suggested that China could retaliate by supporting the anti-Indian militancy in Kashmir – which, Delhi would say, it already does by condoning Pakistan’s role in the area’s currently escalating unrest. “With a GDP several times higher than that of India, military capabilities that can reach the Indian Ocean, and having good relations with India’s peripheral nations, coupled with the fact that India’s turbulent northern state borders China, will Beijing lose to New Delhi?”, the newspaper taunted.

Eventually however, China did no more , at least overtly, than re-naming the places – about which, of course, India complained.

The Dalai Lama tending to his Buddhist flock, and China’s response, are however just a by-play in a much larger story of India’s dwindling regional clout, which contrasts with the apparent strength of Narendra Modi’s government that aims to make the country internally and regionally strong and internationally important.

OBOR map - The Economist

India has for years aspired to be a player on the world stage and specially covets a seat on the United Nations Security Council, which China opposes. But, as its leaders recognise, it will not become such a player until it overcomes its economic and social problems at home, especially its hundreds of millions of undernourished and under-educated poor.

I was specially struck by this weakness after attending a series of recent conferences and seminars in Delhi. Many of the points are not new, indeed I covered them in detail in my book IMPLOSION: India’s Tryst with Destiny, a couple of years ago. But they strike home three years into the Modi government, which should be making a better job of making India achieve its potential.

It started at a London School of Economic conference in Delhi where a discussion on India moving from being a “third world to regional power” showed that it wasn’t moving very far, even though it has the world’s fastest growing economy at around 7%. Ashley Tellis, a leading US academic who was reported earlier this year to be on Washington’s list for America’s next ambassador to India, said that the country was not “moving at a pace” that would enable it to take on China or enjoy the international clout of other world powers.

Vikram Sood, a former senior Indian diplomat, said it was inevitable that India’s neighbours would not like it because they were so much smaller. He might have added that India’s diplomats have not learned how to woo their smaller neighbours and are outclassed by China’s money-led diplomacy, though Sri Lanka has recently found China infrastructure investment terms too onerous.

A few days later, it was India’s failure to cope with One Belt One Road – the Belt Road Initiative (BRI) as it is also known – for highways, railways, sea links and pipelines to Europe that emerged strongly at the Observer Research Foundation, a leading Delhi think tank. China’s ambitious aim (map above) for 2049 is to utilise its surplus industrial and financial capacity, to develop trade and financial markets, and to extend its sea power and diplomatic reach by linking as many as 65 countries and 4.4bn people in Asia, East Africa, the Middle East and Europe. It builds on the ancient Silk Road and Trans-Siberian railway and other existing projects, as well as including China’s contentious claims to control the South China Sea.

Kashgar-Gwadhar-Road-and-Railway-LinksThis is a challenge for India because the project brings all its neighbours closer into China orbit. The plan also includes a basically separate project to built a China Pakistan Economic Corridor (CPEC) linking the ancient city of Kashgar in western China with Pakistan’s Gwadar port (built by China) on the Arabian sea close to the border with Iran (shown above in a Pakistani map).

India has objected to this because it goes through the northern region of Pakistan which India claims as part of Jammu and Kashmir. India does not of course seriously expect ever gain this territory, but it lodges the claim in response to Pakistan wanting India’s part of Kashmir. It objected without any success over 40 years ago when China built the Karakoram Highway, which forms part of the corridor, in Pakistan’s Northern Areas.

“For India, blocking the BRI is not feasible, ignoring it would be self-defeating,” said Manoj Joshi, a leading journalist and senior ORF fellow at the seminar. “New Delhi needs to work with like-minded states on a strategy that can use BRI to its own ends and minimise its downsides to its own economic and geopolitical standing”

The next day, at a Carnegie India seminar, there was anxiety about whether US-India ties, which have been developed over the past decade, would not be so important to Donald Trump. That could significantly weaken India in its dealings with China. And the day after that, at the Vivekananda International Foundation which is close to the BJP government, there was concern about how badly India sells itself to the world – and no real answers about how that could be improved.

Those few days, together with the Dalai Lama spat and the neighbourly visits, put the India story in context as it approaches its 70th anniversary of independence.

Despite all that has been achieved developing a poverty-stricken country to an increasingly modern economy, India has yet to develop the confidence or the ability to be significant in its own region and on the world stage. It is increasingly losing out to China and there is no sign of that changing.

Shashi Tharoor’s attack on British rule got more attention in the UK

Governor of the Bank of England came too, but who noticed?

Three British cabinet ministers plus the governor of the Bank of England and two other government ministers trooped through India just before Easter in a seemingly desperate bid to drum up support from their largest former colony as Brexit looms – and before, following today’s announcement, they start campaigning for the UK’s June 8 general election.

They were well received by the Indian government, but the UK no longer rates as one of India’s leading foreign relationships and they made little impression outside their formal meetings. This revived memories of visit splurges staged to little effect by former prime minister David Cameron.

British+Chancellor+Philip+Hammond+visit+India+-4DGb83JtBKl

Philip Hammond and Arun Jaitley, India’s finance minister

Two prominent investment bankers in Mumbai said “zero” and “none” when I asked about the impact of the visit by Philip Hammond, Chancellor of the Exchequer, who brought Mark Carney, the Bank of England governor with him. “I didn’t know they were here,” said the head of a large business group.

Shashi Tharoor, a provocative Indian MP and author, and a former top United Nations official, seems by contrast with the ministers to have made much more impact in the UK, where last month he was publicising his best-selling book, Inglorious Empire, that castigates the British for what he sees as its cruel and economically debilitating rule in India. Some 8,000 copies were sold in the first month after publication.

The comparison may appear unfair, but Tharoor has kicked off a debate about Britain’s failure to acknowledge its mis-deeds. His book, titled An Era of Darkness in its original Indian edition, has sold over 40,000 copies since it was published last November, making it the top title for Aleph, its publisher. Tharoor has suggested that Britain should apologise for plundering the Indian economy and for horrors such as the Amritsar massacre in 1919 of hundreds of non-violent protesters and pilgrims.

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There is a Brexit link with Tharoor’s lucid and sometime passionate arguments because he is stirring up anti-colonial memories just as Britain is hoping that the 52 Commonwealth former colonies will give it a special welcome when it comes to negotiate bi-lateral trade deals. There is even talk of a surely improbable multi-lateral deal with the Commonwealth, an international association that achieves little but is seeking new roles for its biennial CHOGM assembly in London early next year.

The risk is that Tharoor is stirring up post-colonial angst that could generate tougher trade deal negotiations and even opposition to Britain. That seems unlikely to happen in India, which is much more concerned with UK visa problems faced by Indian businessmen and students.

The British civil service has not helped by dubbing its Commonwealth ambitions as Empire 2.0 (initially for an Africa free trade zone). The Times has reported that the title was coined by sceptical officials worried about the high priority being given by ministers to trade deals with Commonwealth nations, but it is now being seen as misplaced old imperial ambition.

The British ministers’ visits to India were mostly focussed on meetings of annual “dialogues” on specific subjects. They were also reported in the UK to be part of a drive called by Theresa May for ministers to spend the Easter break selling Britain abroad. Liam Fox the trade minister, toured South East Asia, and May went to the Middle East (West Asia).

Stock expressions

Arun Jaitley, India’s finance minister, gave Hammond and his colleagues a good reception, saying that the UK was “looking at a different kind of relationship with India” and there was “a huge aspiration in India itself also to add to and improve upon that relationship”. The talks would take the relationship to “an entirely different level” said Jaitley, using a stock Indian expression that usually means little if anything.

Two-way merchandise trade between India and the UK has fallen in recent years to around $14bn, though both countries are among the top three investors in each other’s economy. Part of Hammond’s focus was on expanding services trade, especially financial services, building on rupee-dominated “masala bonds” that were launched in London last year to raise funds for India’s infrastructure. He offered financing for India’s Make in India campaign though that project’s problem is less to do with finance than finding foreign companies that will generate manufacturing jobs.

These were good workman-like talks but scarcely justified the sudden mass of ministerial visits, nor the strange attachment of the Bank of England governor, who is supposedly independent of government and could have made a splash on his own.

Also with Hammond was commercial secretary Baroness Neville-Rolfe and international trade minister Mark Garnier plus, on a separate energy mission, secretary of state for business, energy and industrial strategy, Greg Clark.

Jaitley-Fallon

Sir Michael Fallon arrives for his meeting with Arun Jaitley, who is also defence minister (photo Pritam Bandyopadhyay)

The final minister was probably the most focused, though his main aims were long term. Sir Michael Fallon, the defence secretary, brought a posse of army and air force officers and set his sights on developing design and manufacturing relationships, with the prospect of the sort of high technology transfer that India wants.

He offered to advise India on how to improve and reform its massive defence establishment, explaining in great detail how Britain had transformed its over-large and inefficient operations. He also talked about a possible new order for 20 Hawk trainer jets, more than 100 of which have already been assembled in India, and also about a more advanced version. The UK has however been less successful than the US, Russia and France in gaining major orders in the past few years. A recent $737m contract for 145 howitzer artillery guns placed with Britain’s BAE Systems went to the group’s American company.

Vijay Mallya’s extradition

From Delhi, it is difficult to see what has been achieved with the special pleading by these ministers. Indeed, the arrest (and bailing) in London today of Vijay Mallya, the absconding liquor and airline tycoon, as the first step towards his extradition to India will make far bigger headlines than the ministers’ visits.

The extradition, providing it goes through before or after the general election, will be seen as a significant gesture by the UK, which has never agreed to extradite anyone to India since the 1970s. That’s real action and beats a flood of visiting ministers.

Posted by: John Elliott | April 10, 2017

BJP aims at Delhi elections as Hinduisation spreads

India contemplates a decade of gradual Hindu nationalist dominance

Municipal elections in Delhi later this month have become politically significant for Narendra Modi’s Bharatiya Janata Party at a time when its political opponents and critics are gradually resigning themselves to maybe as much as a decade of increasing Hindu nationalism in India’s social and political life.

The BJP is launching an intensive vote-winning campaign to ensure it defeats the fledgling Aam Aadmi Party (AAP) that embarrassed it by winning a crushing victory in Delhi state assembly polls just after the BJP had won the 2014 general election.

Following the BJP’s landslide state assembly win in Uttar Pradesh (UP) last month, this is the next step for Modi and his strong Hindu nationalist henchman, Amit Shah, in their drive gradually to dominate the Indian political scene by the 2019 general election.

As has been seen since the UP victory, Hinduisation can involve varying degrees of surges in extreme nationalist authoritarian policies. So far, these have included bans on sacred cow slaughter and police crack-downs both on slaughterhouses (mostly run by Muslims), and on the freedom for young men and women to socialise in public – backed sometimes by genuine Hindu nationalist hardliners, but also by vigilante enforcement gangs that cause communal unrest and extort bribes from those they attack.

Yogi-Adi

The flip side is that UP at last seems to have a government, albeit with a firebrand Hindu priest, Yogi Adityanath (above), as chief minister, that is determined to restore law and order to a seriously lawless state, and also to push ahead with development. That is in stark contrast to the last 15 years of rule by two state-level regional parties.

More widely, these developments stem from the legacy of the fading Gandhi dynasty-dominated Congress Party that in 2014 bequeathed, after ten years in power, a country urgently needing clean, efficient and development-oriented government.

As the Modi years unfold – he is now into the second half of his five year term in office – it is clear that the price that India will have to pay for stronger government is growing and often intolerant Hindu nationalism, which horrifies India’s liberals and strikes fear among Muslims and some other minorities, notably Christians.

Delhi election

The five-yearly elections to the notoriously corrupt Delhi Municipal Corporation are rarely significant beyond the city. The BJP is currently in power, so it is not chasing a new victory, but it is determined to defeat its main competitor, the AAP led by Arvind Kejriwal, who is Delhi’s chief minister and whose small party grew out of an earlier anti-corruption movement.

Modi’s government has hounded the Kejriwal state administration since 2014, frequently undermining and disrupting its limited constitutional authority in Delhi’s multi-tiered government structure. The municipal election on April 23 will be a test of Modi’s and Shah’s ability to use the BJP’s organisational and financial clout to swing poor voters back from the AAP that they supported in 2014.

The BJP’s triumphant and unexpected appointment on March 19 of Adityanath, a long-standing MP and Hindu monk who always dresses in priests’ saffron robes, as the UP’s chief minister, indicated that Modi is apparently content to give way sometimes to Hindu hardliners providing the development of a strong India remains his government’s top priority.

That balance seemed to have been upset in Adityanath’s early iryys, when enforcement of an existing law (which varies in different states) banning cow slaughter led to raids on slaughterhouses and also on sales of buffalo beef that is legitimately and widely eaten and exported. Gangs of gau rakshaks (cow protectors) became vigilante enforcers, backed by frequently vicious policing. There were indiscriminate raids and attacks on shops selling lamb and on kebab restaurants – at least one Kentucky Fried Chicken shop had to close in Delhi’s UP satellite city of Noida.

Cow tweets IMG_1916

The chief minister of Gujarat on Twitter

At the same time, the government clamped down on hordes of young men who had been pestering women on the streets to such an extent that many young women did not dare go out in the evenings. This action was necessary and had not been carried out by the previous state government but, again, it was done to excess by “anti-Romeo” squads with police harassing couples and even arresting single men who were doing no harm.

Slowly, the situation calmed down. Adityanath warned that excesses would not be allowed and that “only those who do not believe in the law ought to be worried”. Harsh and sometimes violent threats and action have however spread.

Ayodhya temple

The highly controversial construction of a Hindu temple at Ayodhya in UP, where Hindu demonstrators demolished a Muslim mosque in 1991, has become a live issue. Illustrating the extreme attitudes that the UP victory and Adityanath appointment have generated, a BJP state assembly member in the southern city of Hyderabad is reported to have said of those who opposed the temple, “we have been waiting for years to behead such traitors”.

The UP clampdown on cow slaughter spread to five other BJP-ruled states, causing outbreaks of violence and potentially upsetting the sale of cows to farmers and the supply of milk to the dairy industry because farmers’ profits partly come from selling ageing cows to slaughterhouses. Officially, UP authorities were only closing illegal operations, but the campaign spread further and the head of the Rashtriya Swayamsevak Sangh (RSS), the umbrella organisation above the BJP, has called for the cow slaughter to be outlawed nationally. The Supreme Court has asked the six states involved to report by early next month on their control of the vigilante squads.

Vijay Rupani, the chief minister of Modi’s home state of Gujarat that goes to the polls at the end of the year, tweeted (above) the “cow symbolises all other creatures”. The state assembly had “passed a cow protection bill, among d most stringent in d country, making cow slaughter a life time punishable offense”. Speaking in the assembly, he said he wanted Gujarat to become a vegetarian state which, if taken literally, would mean people not eating buffalo, lamb, mutton (goat) or chicken nor, maybe, fish. The BJP chief minister of Chhattisgarh said people who killed cows “will be hanged”.

cow minister IMG_1909India’s commerce minister, Nirmala Sitharaman, told parliament (right) that critics should recognise that cow protection was “very much the spirit behind our freedom movement” before independence.

Recognising the build-up of pressure, and indicating problems facing Muslims in the coming years, the head of a prominent Muslim shrine in Ajmer, Rajasthan, has said that Muslims (who only avoid pork) should stop eating beef “to honour the religious sentiments of our Hindu brethren”.

Adityanath has tried in media interviews to present a moderate face – promising to the Times of India that he would tackle “corruption, lawlessness, casteism and the politics of appeasement”. This indicates that the government would not discriminate between castes and religions, though Muslims fear that discrimination will happen.

Farmers’ bad loans waived

In a gesture to poor farmers saddled with bad debts, Adityanath has also implemented a BJP election manifesto promise to write off Rs360bn (about $5.6bn) bad loans owed by some 21.5m small farmers. Political parties frequently make such pledges to win votes, even though the states can rarely afford the costs. The move smacks more of the Gandhi dynasty’s Congress policies than Modi’s approach. The Reserve Bank of India criticised the waiver, saying it would “undermine an honest credit culture” and increase the cost of borrowing for others.

Modi is trying to maintain a balanced image during the extreme actions and threats of some of his prominent supporters. Addressing a student gathering on March 27, he said: “In India, God is not different for Hindus, Muslims and Parsis. The truth is one, only different people may express it differently. We are such a country which does not believe in imposing our views on anyone.”

Tell that, many people will say, to RSS and other extremists in Modi’s Hindu-first and Hindu nationalist political firmament.

Posted by: John Elliott | March 19, 2017

Hardline Hindu priest becomes UP chief minister

BJP takes a gamble after winning election with development agenda

The Bharatiya Janata Party has unveiled what could turn out to be its vision of the future leadership for a Hindu-nationalist India with the appointment yesterday (March 19) of a hard-line Hindu priest as the chief minister of Uttar Pradesh. He will be backed up by two deputy chief ministers, one from the backward castes that form a crucial vote bank, and the other a high caste Brahmin professor of commerce.

yogi-adityanathThere was widespread shock and surprise when Yogi Adityanath, a long-standing BJP member of parliament from eastern UP who always dresses in saffron priest’s robes, was unexpectedly chosen (left) by the party’s leaders following their landslide state election victory a week ago. Other candidates, including the two who are now his deputies, did not get enough support for the top job, and no-one had been named during the election campaign. Adityanath, who has no experience in government, was later endorsed by a meeting of newly elected state assembly members and was sworn in today (March 19).

Known as a fire-brand Hindutva (Hinduness) leader with a string of legal cases against him, including criminal intimidation, attempt to murder and incitement to violence, Adityanath has often fallen out with BJP leaders.

He stressed after being sworn in that he would follow a development agenda, but he is expected to revive the highly controversial construction of a Hindu temple at Ayodhya, where Hindu demonstrators demolished a Muslim mosque in 1991. One of his first tasks may be to fulfil an election manifesto pledge and close slaughter-houses that are mostly operated by Muslims.

Age 44, Adityanath is eight years younger that Amit Shah, the party’s hard-line president, and 22 years younger than Narendra Modi, the prime minister. He has a clean image in terms of corruption and is a new type of face among the younger generation of BJP leaders, and presumably could rise to the top if he succeeds in his first task of ensuring that the party does well in the 2019 general election, with UP returning at least if not more than the state’s current 71 MPs, and is then re-elected as chief minister UP in 2022.

Communal tensions

Arguably UP voters, who gave the BJP its massive majority of 312 seats in the state’s 403-seat assembly, expected a development-oriented chief minister to run the state with its population of 220m people and not such an extreme and controversial Hindu nationalist who could inflame communal tensions. The challenge is to provide better government, less corruption and stronger law and order than the dreadful record that recent state governments have managed.

Modi has projected a development agenda and has underlined this in recent statements, which he repeated today. Yet he agreed to the appointment of Adityanath probably, it is being widely suggested, under pressure from the Rashtriya Swayamsevak Sangh (RSS), the BJP’s extreme right wing umbrella organisation, to which he and Adityanath, and the two deputy chief ministers, have allegiance.

It may be that the leadership of the fervently Hindu-nationalist Sangh Parivar (family of organisations) to which the RSS and BJP belong, felt that the opportunity to put a strong Hindutva stamp on such a big election victory should not be missed.

Yogi Adityanath  elected leader of the BJP Legislature Party

Yogi Adityanath arrives for the selection meeting

This has meant however that a Hindu agenda has been stressed earlier in the life of the national BJP government than Modi seems to have intended. He successfully won the 2014 election by appealing to the frustrated aspirational young who wanted him to change the way that India is run.

The UP victory shows he has now won the support of the poor, who want to move on from the Congress Party’s sops and corrupt aid schemes, mostly named after the Gandhi dynasty, to positive development policies and an attack on the rich and powerful – epitomised (wrongly) in their view by Modi’s demonetisation note-ban project.

One of the two deputy chief ministers is Keshav Maurya, the BJP’s state president for UP, who has a background in the Sangh Parivar’s ultra-hard line and sometime violent Vishwa Hindu Parishad as well as the RSS. He was elected an MP in 2014 when he declared ten criminal cases against him.

The other is Dinesh Sharma, currently mayor of Lucknow, the capital of UP. A commerce professor in the University of Lucknow, he is known for developing good relations with political opponents and others including the Muslim community.

Muslim fears

Adityanath’s task, along with these two deputies, should be to bridge the gap between the Hindu and development agendas, and also to show that Muslims, who make up about 18% of UP’s population, have little to fear. Controversially, the BJP did not field a single Muslim candidate in the state’s assembly election and made no attempt to woo Muslim votes, though there was one minister from that religion among the 47 cabinet ministers and ministers of state who have been sworn in.

Adityanath, whose name originally was Ajay Singh Bisht, has led campaigns to convert (or re-convert) Christians and Muslims to Hinduism, and to encourage “love jihad” where Hindus marry Muslims to convert them. He has run an activist and sometimes violent youth organisation, the Hindu Yuva Vahini and has been prominent in cow-protection and anti-beef eating campaigns. He is even reported to have said that those who did not practice surya namaskar, a yoga practice, should leave India.

Yogi NDTV Prannoy Roy March 4 '17He has taken a strong line on Hindu dominance in India and said, when asked recently on NDTV (picture right, and the video is here) whether he was a Hindu first or an Indian first, replied (speaking in Hindi), “I am a Hindu and, being a Hindu I am also an Indian – Hindu and Indian are two meanings of the same word…..The word Hindu is our cultural manifestation and the word Indian is our geographical symbol, so there is no difference.”

Currently, as well as being a very active MP in the Lok Sabha, he is head priest of a temple in his constituency of Gorakhpur, and was a mathematics graduate in his youth before becoming a follower of the then mahant (head) of the temple. A strong public speaker, he is reported to have wanted to be the BJP’s chief minister candidate in the recent election, but Modi wisely deflected that and made himself, presidential-style, the focus the campaign.

So, having voted for Modi, the electorate of UP have got Adityanath, a hard-line and sometimes ruthless Hindu priest, who has been appointed in the most daring controversial and transformational experiment that Modi and his fellow leaders have tried since they came to power in 2014.

BJP grabs Goa from Congress and is set to do the same in Manipur

Arun Jaitley takes additional charge of Defence ministry

State results a personal blow for Rahul Gandhi and setback for AAP

Narendra Modi has established himself as India’s only credible national political leader and has set 2022 as the target year for developing a strong India. He has achieved an astonishing landslide victory in the key state of Uttar Pradesh, where the Bharatiya Janata Party  has won 312 out of 403 seats, compared with a figure of around 190 that was the highest generally expected.

The result was announced on March 11 when counting took place in five states’ assembly elections. The BJP is now set to form the governments in four of them, having also won in Uttarakhand, and staged controversial coups that eased the Congress Party out of a leadership position in both Goa and Manipur.

The UP vote was primarily for Modi, not for local candidates, even though he will not be running the state. Having dominated the campaign in presidential style and achieved the victory, he will hand that task to a chief minister, who is yet to be named. The chief minister’s tough task, working in the shadow of Modi and his main henchman, Amit Shah, the hardline Hindu-nationalist BJP president who ran the campaign, will be to replace past UP governments’ corrupt and ineffective rule with development-oriented policies and  strong law and order.

At a victory rally (below) in New Delhi on March 12, Modi said: “My target is 2022, not 2019. 2022 will mark 75 years of India’s Independence”.

That means he is looking beyond the next general election in 2019 to the end of the five-year term of this weekend’s state assembly results.  Talking about a “New India”, he said: “If everyone bears the mood of development, then all our dreams and progress would be achieved. This is the environment we need to create.”

Prime Minister Narendra Modi addresses supporters

The UP result, which reflects voting trends in the BJP’s general election landslide in 2014,  is even more remarkable because the party has not done well in the state for 25 years. In 2012, it won only 48 seats , whereas its total this time is 325 including its allies.

The BJP has now recovered from embarrassing defeats in Delhi and Bihar state polls after the 2014 general election. It rules in states covering more than 60% of the population, and it is clear that Modi has established  a dominant leadership position nationally with no rivals to challenge him. Barring unforeseen events, he can look forward to the second term as prime minister that he craves after the next general election in 2019 – providing he is perceived to be delivering in the next two years.

The BJP’s large number of UP (and other) assembly seats will help Modi choose the country’s next president, who will take office in July. It will also help gradually to strengthen the party’s clout over the next year or so in indirect elections  to the Rajya Sabha, the upper house of parliament, where it has been in a minority. That will eventually ease the passage of legislation, which has been blocked by the Congress Party.

The result was devastating for Rahul Gandhi, dynastic heir apparent to the leadership of the Congress Party which has managed only seven seats in UP (down from 28 last time) while its partner, the state-level Samajwadi Party, has 47.

Rahul Gandhi should step down

If ever there was a time for Gandhi , 46, to back off from politics it is now because he has proved himself to be a lightweight with no leadership potential and no positive political or economic message. His lack of focus and leadership has allowed Goa and Manipur to go to the BJP.

Congress has even had the humiliation of the BJP winning six out of ten assembly seats in the Gandhi family’s traditional political base – the UP districts of Amethi and Rae Bareli, where Rahul and Sonia Gandhi are MPs.

Rahul’s mother and the party president, Sonia Gandhi, is not well and is reported to be abroad for a health check-up (presumably at a New York clinic, which she has visited before). His sister Priyanka unexpectedly did little campaigning – two weeks ago she was spotted by a friend lunching with Sonia in the Italian Embassy’s cultural centre café in Delhi. Unless Priyanka steps in, the dynasty will decline and drag the party with it – and it may now be too late for her to mount a rescue.

bjp-celebrations-pti_650x400_71489234180

BJP supporters celebrating the UP victory with colour sprays that are a feature of the Holi festival, celebrated this year on March 13

Congress won in Punjab with 77 assembly seats out of 117, but that is widely seen as primarily a personal vote for Captain Amarinder Singh, a veteran state-level leader who comes from an old regional royal family and was 75 on March 11. He will now become chief minister for the fourth – and, he has said, final – time.

The results are a serious setback for the Aam Aadmi Party, led by Arvind Kejriwal, Delhi’s chief minister, who wanted to spread the party’s role to other states. The party had hoped to be a close challenger of Congress in Punjab, where Kejriwal led the campaign, but came a distant second with only 22 seats. It did however beat an alliance between the state-level Akali Dal party (which was in power) and the BJP that together have 18 seats. It also contested in Goa, where it failed to win any seats.

The UP result is a major defeat for Akhilesh Yadav, the 43-year old out-going chief minister who recently seized the Samajwadi Party leadership from his veteran politician father, Mulayam Singh Yadav. Akhilesh linked up with Congress, primarily to woo the state’s large Muslim vote, but that partnership failed.

In other results, BJP won in Uttarakhand, adjacent to UP, with 57 of the 70 seats, ousting a Congress government and pushing the Congress seats down to 11.

BJP coups in Goa and Manipur

In Goa, Congress and an ally won the most assembly seats – 18 out of 40, beating the BJP which has been in power and only won 14 seats with allies. But the BJP has recruited a small regional party to form a coalition that will be headed by Manohar Parrikar as chief minister. Parrikar held the job earlier and has been India’s defence minister since late in 2014. Arun Jaitley, the finance minister, has been given additional charge of defence, a double-post he held for a few months in 2014.

The BJP also expects to form the government in the north-eastern state of Manipur, even though Congress led the polls with 28 out of 60 seats compared with the BJP’s 21. The BJP tally was good for the party, which has not previously had a presence in the state. It gathered support from other parties and individual assembly members, and has chosen a local politician to be chief minister.

That will leave Congress to form the government only in Punjab, a success that pales into virtual insignificance compared with the defeat in UP, where Rahul Gandhi personally led his party’s campaign with Akhilesh Yadav.

Modi’s charisma

Watching Modi in Ramnagar on the banks of the Ganges near Varanasi, when he went there on March 6, I was struck by the charisma of authority and leadership that he projected. He absorbed the “Modi Modi” screams and chants from the crowds and reflected a sense of standing and authority.

Contrast that with the floppy hand waves that Gandhi gives to crowds that have no more meaning that the way that friends say goodbye to each other. Gandhi also has no message of hope, whereas Modi inspires a widespread respect for trying to tackle the country’s immense problems of corruption, lack of sound governance, and inadequate achievement.

Significantly, the BJP and its allies won all the seats in Varanasi, where Modi has been the MP since 2014. There has been considerable resentment about a lack of progress there in the past three years, and this prompted Modi to be based in the constituency for the final three days of campaigning  – an investment that has clearly paid off.

It is not just in Varanasi that Modi is failing to do all the things that voters, especially the poor, think he is and should be doing. The recent bank note ban of demonetisation is wrongly seen, even by people who have suffered, as a worthwhile attack on the rich and corrupt.

Like several of other attention-catching schemes that Modi has launched, demonetisation has yet to show any significant positive impact, apart from some increased use of electronic and digital banking,. Schemes such as Make in India and Start-up India have had little real effect on manufacturing investment and new businesses, while the Swachh Bharat cleanliness and sanitation project is under-performing.

The big picture

Some 60% of the 140m electorate in UP (which sends 80 MPs to parliament) turned out to vote, about 40% of whom voted for the BJP. The BJP had done careful caste-based calculations in its choice of candidates and local election strategies, but the result confounded experts who had minutely dissected the views of the state’s various castes and of minorities, notably Muslims. As a television reporter said, “it was a big picture result – people who relied on detailed analysis lost the plot” – the big picture being that Modi has captured the minds of voters desperate for change, especially the poor, straddling castes and classes.

There was relatively little of the communal divide that Modi and Amit Shah have generated in the past. There were some anti-Muslim issues but generally Shah, who should take the credit for organising the BJP’s election campaign, projected a development message and curbed most of his own and his more extreme activists’ sentiments.

Modi’s challenge now is to accelerate his government’s performance nationally and deliver the improvements that voters expect to see in their lives. His next test is an assembly election later this year in his home state of Gujarat, which the BJP should win easily, and then other key states next year.

After that, the 2019 general election is his, to win.


Originally posted on March 11 with the headline Modi landslide win in Uttar Pradesh projects him for general election victory in 2019″, this article was updated and reposted on March 12 and was further updated on March 13



BJP could top UP state polls but maybe not in Modi’s constituency

If hyper activity is sometimes a sign of both a desperation to win and a fear of defeat, then Narendra Modi’s frenetic saturation of Varanasi with three days of political rallies and speeches earlier this week reflects the prime minister’s worry that the Bharatiya Janata Party’s candidates in the constituency face the risk of losing tomorrow in Uttar Pradesh’s assembly election.

Modi was elected to parliament from the sacred Ganges city in 2014, so defeat of the BJP’s candidates in his constituency would be a bitter blow for a politician who thrives on mass adulation but who has not yet achieved enough during three years as prime minister to be sure that he still has sufficient pulling power with the electorate.

Prime Minister Narendra Modi in VaranasiThere have of course been plenty of signs of frenzied adulation by crowds of thousands in and around the city of Varanasi during the three days, as I saw yesterday  morning at Ramnagar (below) on the banks of the Ganges. Modi visited the town alongside a famous old Mughal fort to make politically charged homage to the memory of Lal Bahadur Shastri (left), who lived there as a child.

Shastri was briefly a Congress prime minister in the mid-1960s in a rare break from the Nehru-Gandhi dynasty’s domination of the party’s leadership.

Modi’s visit was a neat political swipe against the dynasty but, more importantly, it was also aimed at appealing to upper caste voters – Shastri belonged to the literate and influential Kyastha caste  – in a state where such distinctions play a significant role in elections.

For a prime minister to spend three days focussed on one city and its surrounding area is rare enough, but Modi also brought in a large number of government ministers (some reports say 25) from Delhi to impress the electorate. Such tactics could easily backfire with voters who have been feeling largely ignored by Modi and his colleagues and could resent such blatantly self-serving attention at election time.

There is widespread disappointment and even anger that Modi has not done more for Varanasi since he became its MP, and that he has not delivered on specific promises. High profile claims that he would have the Ganges cleaned have failed to produce results, and he has done little to improve the city, which is a centre for Hindu pilgrims and tourists from within India and abroad. There has been some improvement in cleanliness on the ghats (steps) along the river bank, and a rather bleak promenade and terrace has been constructed alongside Assi Ghat at the southern end of the city.

Modi Ramnagar

A partnership between Varanasi and Kyoto, which was arranged when Modi visited Japan in 2014, has yielded little in the areas of co-operation that were envisaged such as waste and transport management, developing Buddhist tourism, and co-operation between universities.

More was also expected from Modi on initiatives in education and development of Varanasi’s historical spiritual base. Two local social scientists told me that Modi and Shah were more interested in the politics of Hindu nationalism than in promoting Hindu learning, and this is resented locally.

Voting takes place in Varanasi and other nearby areas tomorrow (March 8) in the seventh and last stage of the UP assembly election. Along with four other states, the votes will be counted on March 11, though a prior indication of the possible result will come from exit polls that will be published on the evening of Thursday March 9 (postponed by a day because polls in one constituency are delayed following the death of a candidate).

Rahul- Akhilesh road show

Big crowds at rallies do not necessarily turn into votes, and they are even more irrelevant as an indicator of the electorate’s intentions if the crowds have been paid and bought in from outside the constituency, as the BJP has been doing in large numbers to build up a picture of support for Modi.

Crowds at a large Modi rally a day earlier were nevertheless said to be smaller than those at a rival event staged by Akhilesh Yadav, the state’s chief minister and leader of the Samajwadi Party, with Rahul Gandhi, heir apparent to the Congress Party’s leadership. The two parties are working together as the main opposition to the BJP.

Victory is important for Modi because it will underline his role and that of Amit Shah, his chief henchman and the BJP’s hardline president, and propel their authority on to the next general election in 2019.

Victory for the Samajwadi and Congress parties would project Yadav as a prominent north India political leader and would also begin to boost Gandhi’s flagging reputation. The two men (above), both in their mid 40s, seem to have worked well as a team during the campaign, building a mutual understanding that could be politically important in the future if both survive. Having Akhilesh as a partner for Gandhi had “revived the whole energy of Congress,” a party official told me.

UP provides a test of whether voters, especially the poor, are still prepared to support Modi, saying that “at least he is trying, which others have not done before”.

That is a refrain heard constantly, especially over Modi’s demonetisation project which instantly removed 86% of bank notes from circulation on November 8 last year. This hit all strata of society, but the poor do not seem to be complaining because they perceive, wrongly, that the rich and corrupt were hit hard – wrongly because most illicit hordes of bank notes were successfully banked through various fraudulent transactions.

Experts have found it difficult to predict the results in most of the states polled in recent weeks. My best guess for UP is that the BJP will win the most votes overall in the 403-seat assembly, though it might not have enough to form a government on its own, in which case the Bahujan Samaj Party (BSP), headed by Kumari Mayawati, could join it in a coalition. Mayawati has been chief minister of UP four times, the last being 2007-12.

An experienced Congress politician on my flight back to Delhi said the UP prospects looked evenly balanced, which I took to mean that Congress (with the Samajwadi Party) was not expecting to win. Similarly, a young Congress worker in Varanasi told me he was “hoping for the best, but preparing for the worst”.

Posted by: John Elliott | February 24, 2017

Infosys and Tata rows raise questions on India’s corporate ethics

Retired chairmen challenge their successors and upset reputations

Two of India’s most iconic and respected companies have been hit by damaging publicity caused when their previous chairmen objected to the way the businesses were being run by their successors. In both cases, the main accusations have been that the new managements were breaking established traditions and ethics..

This has led to questions not only about the wisdom of the former chairmen’s outbursts, but also about what this revealed concerning the general state of India’s corporate integrity.

Tata, India’s biggest and most respected conglomerate, has begun to emerge from its four months of damaging publicity with a new executive chairman, Natarajan Chandrasekaran, who took over on February 21 from Ratan Tata at Tata Sons, the main holding company. Previously chairman for 21 years, Tata had reappointed himself as interim chairman on October 24 last year when he organised a boardroom coup that ousted his successor, Cyrus Mistry, 50, triggering legal challenges to his action and media exposure to negative aspects of his legacy.

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Narayana Murthy (right) with Vikas Sikka in 2014 shortly after handing over the Infosys top executive job

The other is Infosys, which is widely regarded as one of the most ethical and entrepreneurially successful of India’s big information technology companies, rivalled only by Tata’s TCS and Wipro. Criticisms were launched earlier this month with maximum publicity by Narayana Murthy, one of Infosys’s founders 36 years ago and the company’s first ceo. They raised questions about boardroom ethics and were aimed primarily at the current chief executive, Vishal Sikka, and at R. Seshasayee, the non-executive chairman and a former head of the Hinduja group’s Ashok Leyland autos company and IndusInd Bank.

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Ratan Tata (left) and Cyrus Mistry in 2012 when Tata stepped down

Ratan Tata never made it really clear why he organised Mistry’s dismissal, using his popwer as chairman of Tata Trusts, the 66% majority shareholder in Tata Sons, beyond making often-contradictory claims about Mistry’s alleged performance failings, whereas Murthy could not have been more explicit when, having no boardroom or dominant shareholder power, he went for media headlines.

In a big interview with The Economic Times earlier this month, Murthy complained about a “concerning drop in governance standards” as well as “arrogance” and a “complete lack of fiduciary responsibility”. He focussed on a large Rs173m ($2.6m) severance payment secured (initially without being recorded in board minutes) by the chief financial officer, Rajiv Bansal, who had left the company in 2015.

Reflecting rumours that are still circulating in Mumbai despite denials by the company, he said that “such payments raise doubts whether the company is using such payments as hush money to hide something”. He also implicitly criticised Sikka’s $7.3m pay package (which is roughly double the earnings of Tata’s Chandrasekaran, who was then head of TCS, and four times that of Wipro’s top executive). Sikka has produced good financial results since he took over in June 2014, raising profits by about a third and starting a fresh approach to innovation, automation and other key issues.

Whistle-blowers

Murthy’s outburst prompted two anonymous whistle-blower emails to be sent to SEBI, the stock market regulator, linking the size Bansal’s severance pay to a purchase in 2015 of Panaya, an Israeli software company strong on automation, for $200m, 25% above a recent valuation.

The inference was that Bansal had not been happy with the deal so resigned and had to be compensated for his loss of job and silence. This has been denied in detail by Infosys, which also faced down other complaints, including Sikka’s use of executive jets.

A cacophony of complaints followed from other disgruntled former Infosys employees including Mohandas Pai, a regular performer on  noisy television debates, who was praised by Murthy and was a top executive and board member till 2011.

Inevitably, Murthy’s action led to questions about his motives coming so soon after Tata had ousted Mistry and had temporarily taken over himself. But Murthy had already reinstalled himself as executive chairman in 2013 when the company’s buggins turn system of  its founders each take the top job led to poor financial results and a loss of market share. He stayed a year till Sikka was hired as chief executive from SAP SE, a German software company, and Seshasayee joined as non-executive chairman.

Seshasayee has refused to resign, but has admitted that there have been “cultural differences” with Murthy and the other founders. With Sikka, he has taken steps in the past few weeks to answer the criticisms and placate Murthy. Sources in India’s corporate world however believe that all the questions have not been adequately answered and that the company’s leadership has not yet been stabilised.

Murthy and his fellow founders together have about a 13% stake in the company, but their real power lies in their status as respected elders, though there is criticism of Murthy’s apparent search for the media spotlight .

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Natarajan Chandrasekaran (left) took over earlier this week from Ratan Tata

At the Tata group, the damaging allegations came ironically not from Ratan Tata but against him from Mistry after he had been sacked. They have raised serious questions about both the group’s and Ratan Tata’s claim to a clean record.

These issues will now have to be handled by Chandrasekaran. They include revelations of alleged questionable payments in a Tata aviation joint venture with Air Asia of Malaysia, and about financial deals which Ratan Tata did in the past with Chinnakannan Sivasankaran, a controversial south Indian businessman who has been surprisingly close to him, plus other telecoms investments and contractual relationships.

That is in addition to allegations of mismanagement by Ratan Tata and the Tata Trusts, and various legal and regulatory actions, started by Mistry at the end of last year.  The most significant are rulings awaited from the National Company Law Tribunal (NCLT) on pleas by Mistry’s family firms, which have an 18.4% equity stake in Tata Sons, challenging Mistry’s dismissal and alleging mismanagement and oppression of minority shareholders.

Chandrasekaran, as he is known, will also have to deal with legacy issues left behind by Ratan Tata when he originally resigned in 2012 such as Tata Motors’ never-successful Nano car and Tata Steel’s UK Corus loss making business. Tata resented Mistry trying to solve these problems and there are others that need tackling in Tata Power and other companies. That is in addition to sharply declining earnings at Tata Motors, and the risk of TCS’s role as the group’s main cash cow being hit by President Trump’s likely restrictions on software engineers ‘US visas.

As he took on his new role this week, Chandrasekaran said he would “focus on three strategic priorities” – bringing the group closer together to leverage collective strengths, driving operating performances, and bringing greater rigour to capital allocation policies.

The question now is whether Tata is willing let him get on with those aims and stand aside without trying to wield veto powers as head of the Tata Trusts.

“Convinced that he was irreplaceable”

In a lengthy Financial Times article on the group last weekend, Simon Mundy, the Mumbai correspondent, had a specially telling paragraph about a longstanding acquaintance of Ratan Tata who said the “adulation” of him gave cause for concern as he approached the group’s mandatory retirement age of 75.

“In this last phase, an ordinary man became an icon. His health was beginning to get stressed, and I don’t doubt that he genuinely wanted to find a successor. It was not a charade. But the trouble was, he was convinced that he was irreplaceable,” said the (unsurprisingly) anonymous source.

Similarly, the question can be asked whether Murthy still considers himself indispensable as Infosys’s chief mentor, which is the title he was given when he first retired.

So what has Ratan Tata achieved with his vengeful ejection of Mistry? He has removed a chairman who wanted to reduce the trusts’ constant grip on Tata companies’ decisions, and who might eventually have tried to disrupt Tata traditions, though that has not been established.

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Chandrasekaran on Mumbai’s Marine Drive – Business Today photo              .                      

With Chandrasekaran, an insider, in charge, the main Tata traditions of social and well as corporate aims are intact, even though tougher management decisions will have to be taken. But Ratan Tata has dimmed the previously venerated group’s protective halo by provoking Mistry to air allegations about ethics, and he has shattered his own halo.

He has also endangered the group’s Parsee traditions by packing the Tata Sons board with a motley collection of outsiders who he knew would support him in ousting Mistry, but who observers fear might have other aims in the years ahead. Chandrasekaran can offset that by bringing more top Tata group executives onto the board – The Economic Times yesterday reported that this is being considered.

Neither Tata nor Murthy have earned much if any praise for the heavy-handed way in which they have tried to right what they have perceived as their successors’ failings. Both had understandable interest since they had built up the businesses, and they both had status as promoters under Indian company law. But that does not excuse the way that they took action.

The Tata group will begin to bounce back from the past four months hiatus as it approaches its 150th anniversary next year, though it has serious business challenges to face.

Ratan Tata’s personal image is unlikely however ever to regain its previous sheen. The same goes for Infosys and Murthy.

And India’s corporate scene has few other prominent ethical icons to look up to.

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