FOR NUMEROUS PUNDITS the advent of the Narendra Modi government after the 2014 election meant a revival of the Indian economic renaissance. The growth during the earlier boom years had petered out, according to these commentators, because of the Congress-led United Progressive Alliance’s policies—the environment ministry’s “licence raj” obstructing various projects, welfare policies such as the NREGA and the Food Security Bill allegedly adding to inflation, and crony capitalism leading to scams in such things as allocating 2G spectrum and coal blocks. By contrast, it was widely held, the Modi-led National Democratic Alliance would accelerate India’s economic growth, and put the country back on the path to its much-delayed modernisation.
Yet, till about five years ago, there was a consensus among the intelligentsia—both local and global—that India was already on its way to becoming the next China. The period of a nearly double-digit growth rate, from approximately 2003 to 2011, saw plenty of “India rising” books, by writers including Patrick French, Akash Kapur and Oliver Balch. These documented the lives of the many Indians making the leap from community life, poverty and the village to individual freedom, consumerism and the city, and tied this trend to the grand narrative of India as the next Asian miracle economy. In the popular mind, India’s apparent destiny was embodied by the growth of IT companies such as Wipro, Infosys and Tata Consultancy Services, by glitzy new international airports in Mumbai and Delhi, and by a mushrooming of millionaires and billionaires.
However, even before the economic boom eventually tapered off, between 2012 and 2014, plenty of inconvenient caveats became evident in the Indian growth chronicle. Despite its $2-trillion economy, India’s record on the basics of literacy and health remained abysmal. In 2011, with a literacy rate of 74 percent, India was less educated than any of its counterparts among the BRICs—Brazil, Russia and China—were over two decades ago. By any measure, at least 40 percent of Indian children under the age of five remain malnourished—a feat matched only in sub-Saharan Africa. Moreover, the extremely unhealthy balance sheets of India’s top corporate groups suggest that the last ten years might have seen a bout of irrational, and irretrievable, investment, as opposed to productive capital-chasing technology and exports.