OzyModi

Ozymandias is a joyless sonnet written about the broken and battered remains of a statue of a king in a barren desert. “Look on my works, ye Mighty, and despair!” says a pedestal near the ruins, but there is nothing to behold. It would appear hubris does not have much of a half-life.

Still, if you are trading in despair look no further than India. When it is not exporting carcinogenic smog to Pakistan, it is busy launching poor economic reforms. On 9^th November 2016, Prime Minister Narendra Modi announced his unilateral demonetisation scheme. The thinking was simple. Very, very simple. Bad men use illegal cash. We should take away all the cash and then bad men cannot use it.

The Indian government estimated five trillion tax-evaded rupees would not be declared post-demonetisation and thus be flushed out of the system. It is the fiscal equivalent of farmers throwing good eggs at a wall in the hopes of discovering one that is rotten. Only one per cent of more than 15 trillion rupees was not declared. It would seem bad men are good at money-laundering.

And as the central bank printed new currency at record rates and cut into its dividend to the government, as charities found themselves struggling due to their reliance on cash-based donations, and as small-medium businesses across India shuttered their doors, the Indian government bragged about how effective it was at collecting large sums of cash. It turns out that when a significant portion of your economy is highly cash intensive, then taking away that cash is not a smart move. India’s GDP is hurting and the general economic slowdown is creating a dent in the legend of Modi.

Modi is also the brain behind the nationwide goods and services tax. It has successfully solved the problem of a bureaucratic mess of a system by replacing it with a bureaucratic mess of a system. With six shiny VAT rates, 37 annual filings, and a lengthy transitory process, it will probably bump up the GDP by less than the amount that the demonetisation scheme managed to squander it by. The GST is just another ace in the hole lost in a swirl of red-tape vagaries and Licence Raj vanities.

Modi is not bad at putting projects together. It is just that they violently lurch from the aforementioned directionless shock-and-awe reforms to those that lack any depth. He has launched dozens of shallow “small-bore government schemes” so far. His social media savvy has served him well in giving each one the sort of digi-buzz that most Instagram influencers would drool over. But they are all symptomatic of a frenzied bureaucrat stuck in the thinking of a small-time, glad-hander rather than the leader of a large nation.

This would be understandable if his rhetoric was as benign as his real reforms to land, labour, and tax. Unfortunately, a great deal of Modi’s popularity is directly proportional to how much fervour he can inject into a Hindu nationalist agenda. When he is not placating “cow vigilantes” with bans on Uttar Pradesh’s $4 billion beef export industry, he is helping sell the world on the forward-thinking capabilities of the Rashtriya Swayamsevak Sangh (RSS). In a way, the RSS is a peaceful secular liberal green party. But in a much more real way it is an extremist Hindu right-wing group that demolishes mosques, burns Muslims alive, and occasionally assassinates people like Mahatma Gandhi.

One should generally avoid the company of groups that the Western academic world references in parallel to the Ku Klux Klan and the Sturmabteilung. But Modi shows little hesitation in celebrating them and in merrily ostracising the Muslim Indian minority. It is worth nothing that this minority comprises more than 14% of India or 170-180 million individuals, and is about the size of the population of Germany, France, and Canada combined.

Modi should dial back the number of reforms he releases every month and instead drill down into whether they are short-term band aids or actual solutions. Dense labour laws should be simplified, foreign investment projects should have more follow-through than hollow “Make in India” campaigns, and small-medium businesses should not have their growth disincentivised by ridiculous retroactive tax measures. Also, less pandering to destructive ideologies would yield better long-term returns than the current display of divisive antics that are so in vogue with contemporary strong men.

Unfortunately, as of now, the chances of meaningful reform being enacted or Modi escaping his current lukewarm trajectory are as good as those of him finally apologising for the 2002 Gujarat massacre. Such is hubris. Such is OzyModi.

Published in The Express Tribune, November 15^th, 2017.

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