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Ayear ago Prime Minis-
ter Narendra Modi
came to office prom-
ising to bring India
"good times," by which
he meant jobs, pros-
perity and internation-
al renown. His progress
has been frustratingly slow.
The problem is hardly a lack of opportunity.
Voters gave his Bharatiya Janata Party the
biggest parliamentary mandate for change in
30 years. Modi has concentrated more power
in his own hands than any prime minister in
recent memory. The problem is that India
needs a transformation, and the task is too
much for a one-man band.
There is no doubting Modi s conviction that
India is about to achieve greatness, and he
may well be right. Within a generation it will
become the planet s most populous nation. It
could be one of the world s three largest
economies, and it could wield more influence
in international relations than at any time in
In his heart, however, the prime minister
believes that only one man is destined to lead
India down this path: Narendra Damodardas
Much has gone well, though serendipity
shares the credit. Helped by falling oil prices,
Modi has presided over an improving economy.
Inflation is down, interest rates are dropping,
the rupee is stable and both fiscal and cur-
rent-account deficits have shrunk. Official
statisticians claim that India s growth, at 7.5
per cent, outpaces China s, meaning that the
country has the world s fastest-expanding
large economy. Foreign direct investment is
up, and so are the prime minister s visits
abroad, where he cuts an impressive figure.
Modi has a questionable record on handling
religious strife. However, though he fails to
control the Hindu-extremist bullies who back
him, so far some observers fears of grave com-
munal violence have not been realised.
When it comes to reform, however, Modi s
record is underwhelming. The past year saw
auctions of coal deposits. The past few days
have brought the tiniest of baby steps toward
privatization: Eight state-run hotels may be
sold off. Modi points out that foreigners may
now invest more in railways, insurance and
He is cutting red tape to create a friendlier
business climate. Poorer Indians will increas-
ingly get cash welfare, not cheap rations in
kind: Since April the world s biggest cash-
transfer plan has replaced artificially cheap
canisters of cooking gas. Massive subsidies on
diesel have been scrapped, and whopping ones
on paraffin should follow. By encouraging peo-
ple to open 150 million new bank accounts,
linked to a biometric database of 850 million
people so far, the government is creating a
structure to provide better poverty relief.
As welcome as all this is, it sells India short.
Modi is making two mistakes.
The first is to think that time is on his side
and that big, unpopular decisions can wait,
perhaps until he has control of the upper house
of Parliament as well as the lower one. That
rests on a delusion among Indian leaders that
they must consolidate power first and reform
later. In fact only a brief period exists in which
change can get going, early in the parliamentary
Modi already faces twinges of popular dis-
content. Surly voters rejected his party in state
elections in Delhi. Some dislike his attention
to diplomacy overseas---this week he wrapped
up a trip to China, Mongolia and South Korea,
completing 52 days abroad in 18 countries
during the past year---while others are put off
by his narcissism, embarrassed that he met
President Barack Obama wearing a dark suit
with all 22 letters of his name stitched over
and over into its golden pinstripe. As he cracks
down on groups such as Greenpeace, some
complain of his authoritarian streak.
The second mistake is for Modi to think
that he alone can bring about change. On the
contrary, the only way for him to realize his
aims is to bring in help. That help could come
from three main sources: India s states, other
national politicians and the power of the mar-
He has made a start by devolving some
power to the states. The idea is to create a
manufacturing boom, though that would, at
a minimum, also require wider changes to the
way land is bought, labor hired and roads
built. As they compete in setting priorities for
policy and spending, the go-getting states will
become models for the rest. Good policy will
be rewarded through a national goods-and-
services tax that creates a common market,
and hence competition, across India. Modi
wants the tax by next April, as promised,
though parliament recently delayed it. The
sooner, the better.
Unfortunately national politics is a long way
behind the states. Modi cannot blithely assume
that his power will grow. The prime minister s
office cannot expand to do everything. It is
time to relaunch his government by bringing
in outside talent.
Like the previous government, he should
get in bright people from the private sector---
especially because the BJP is short on capable
leaders---to strengthen, say, the Finance Min-
istry and the Corporate Affairs Ministry. In
parliament Modi could sometimes compromise
with the opposition Congress party, to rush
through the sales tax, say, or make buying
Lastly, he needs to use markets as agents
of change. Modi should lead a national cam-
paign to ease the world s worst labor laws.
Perverse restrictions on domestic trade in farm
produce should go. Private companies could
compete to make the railways more efficient.
Infrastructure must be built faster, which
requires a better law on acquiring land. State-
run banks should no longer be subject to polit-
ical meddling, but recapitalised and put in
independent, ideally private hands. Foreign
investors could raise standards in Indian uni-
versities. Across the woefully bad education
system, there s a need for a focus on excellence
in teaching and standards, easing the way for
more private providers.
Modi acts as if many small improvements
add up to transformative gains. They don t.
He still is thinking like the chief minister of
Gujarat, not like a national leader on a mission
to make India rich and strong.
If he is to transform his country, India s
one-man band needs a new tune.
@2015 The Economist Newspaper Ltd.
Distributed by the New York Times Syn-
India's one-man band
Prime Minister of India
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