Upload
sukumar-muralidharan
View
7
Download
0
Embed Size (px)
DESCRIPTION
A reality check on the market driven euphoria over Narendra Modi possibly ascending to prime ministership.
Citation preview
1
Market Illusions and Modi Mania
Sukumar Muralidharan
29 March 2014
Notions about Indias 2014 general elections being determined in the stock market
may be exaggerated, but not by much. In fact, there is an unmistakable
correspondence between successive upward notches in the stock market in recent
times and every step towards political pre-eminence by one of Indias most polarising
political figures, Gujarat chief minister Narendra Modi. The only point worth arguing
over is whether this correspondence is a matter of design or merely the outcome of
investor sentiment what Prime Minister Manmohan Singh has in a tired rhetorical
trope borrowed from the economist John Maynard Keynes long described as
animal spirits.
The Bombay Stock Exchanges Sensitive Share Price Index (Sensex) showed an
upswing in April last year, which seemingly coincided with Modis grand coming out,
when he broke out of his confinement in the local milieu of Gujarat as a person who
still had much to answer for about the 2002 riots that gutted the state under his
watch. There was one more upswing in July, soon after Modi was named head of the
central election panel of the Bharatiya Janata Party (BJP). Then came the
September exuberance. And we have not yet come to the euphoria of 2014, induced
by the opinion polls which have already crowned him with the victors laurels.
Even Modis most ardent follower, to be sure, would hesitate to put down these
movements entirely to his aura. Since the rally of the stock market in April 2013,
there was a near catastrophic fall in May, precipitated in the main by an
announcement from the U.S. Federal Reserve (Fed) that it would rethink the easy
money policy of pumping dollars into the economy, enabling Wall Street to play the
worlds markets. This was followed by a partial rally in July in the Indian markets and
an end to the indecision in September, when the Fed affirmed its intent to continue
bond purchases and ensure a world awash in dollars would not have to search for a
rapid cure to its addiction.
2
That these policy decisions from diverse corners of the globe coincided with stages
in Modis ascent should be put down to happenstance. No responsible commentator
should read any deeper meaning there. Since the media frenzy began mounting
though, there have been a series of opinion poll findings through January and
February, which take Modi love always a subjective sense into an objective
finding that the party he leads would probably win a fairly decisive majority in the
general election. These findings all deeply questionable for various reasons -- were
just the tonic that the markets required to set course towards new heights.
If investor confidence was really driving the markets, there was a curiosity about this
phase of exuberance that media commentator Swaminathan Aiyar drew attention to.
The impetus for the upward market movement was coming almost entirely from
foreign institutional investors (FIIs) whose frenetic buying outpaced the keenness of
the domestic share holders to sell. That disproportion in money power seemingly
created a bias towards an upward rush of prices in the stock market, but fell short of
being an index of political confidence in the promised new regime. It was a situation
in which those who can vote (in the coming election) are quitting the market, while
those who cannot vote ... are getting in. This could be described in various ways,
but it was not as Aiyar noted, exactly suggestive of voter euphoria.
To take another key price indicator which (after a fashion) represents a reverse
barometer of the national mood: the price of gold after rising to dizzy heights during
the second five year tenure of the Manmohan Singh government, has since the early
months of 2013, shown some degree of moderation. Gold is the safe haven that
investors and small savers seek when times are turbulent. Yet the moderation in
gold prices could not really be read as an index of confidence since administrative
measures had intervened. The import duty on gold was raised from two to four
percent in March 2012, then again to six percent in January 2013 and eight percent
in June that year. Those were policy moves that gained little popularity with Indias
burgeoning and increasingly voluble middle-class, which in its mood of rising
resentment, could easily represent them as part of a continuum of measures taken
by Manmohan Singhs United Progressive Alliance (UPA) government to thwart the
legitimate aspirations of Indias productive strata.
3
Gold has a unique position in the Indian consciousness. Early in 1991, the Reserve
Bank of India (RBI) gathered up a large part of its gold reserves and dispatched the
precious hoard to the vaults of a London bank, ostensibly to ensure that international
creditors did not call in the nations external debt. The global oil crisis of 1990 had
pushed Indias payments situation to near breaking point, announcing to a political
leadership rather innocent of the ways of global finance, that the borrowing binge of
the 1980s would exact a heavy price.
Official spokespersons in moments of subsequent candour, would admit that the
drama of hocking the countrys gold was confected with specific intent to prime the
public mood for a radical change of policy course. It was, well before Naomi Klein,
the Canadian political theorist and campaigner coined the term, the shock doctrine
in action. The drama had the intended effect. Manmohan Singh, sworn in as Finance
Minister in P.V. Narasimha Raos cabinet in July 1991, began the change of course
with little political dissent or credible challenge in terms of practical options. Some of
the middle-class insecurity spawned in the year of living dangerously was evident in
gold prices going up by close to 25 per cent in the year that followed. But the fever
for gold subsided rather fast. Over the next four years that Manmohan Singh reigned
over the Finance Ministry, the price of the metal increased cumulatively, by a mere
15 percent.
Manmohan Singh as Prime Minister exerted a very different manner of influence
over Indias gold psychology. Between the time he left the finance ministry and the
time he took office as head of the UPA coalition, the price of gold increased by just
about 15 percent. When the UPA coalition observed the one-year anniversary of its
assumption of office, the price of gold stood roughly 5 percent higher. In the next
year, it went up by an astounding 65 per cent. Since then, reckoning in terms of
successive anniversaries of the UPA, there have been just two years of relative
moderation. Today the gold price in the Indian market is roughly five times what it
was when Manmohan Singh assumed prime ministership. If gold fever is a negative
barometer of public confidence in the management of the economy, the vote clearly
has been a resounding negative for the UPA, especially in its second term.
For all the emotional ties that bind the Indian middle-class to the barbarous relic, the
stratospheric heights the metal has achieved in recent times suggest a spillover into
4
a state of neurosis. There may be an element of rational calculation in the
investment decisions made in gold. But in 2012, the economy driven by all its
animal spirits seemed on the brink of an abyss that seemed deeper and much
darker than the worst that 1991 threatened, and official spokespersons had to
consciously disavow the positive rhetoric, repeatedly describing gold as an
unproductive asset in public statements, and rapidly escalating duties on its import.
The causes of this rethink were fairly clear. As the Economic Survey issued by the
Finance Ministry just ahead of the Union Budget in 2013 put it, imports of gold had
grown by 11.2 percent in volume terms and 39 percent in value terms the previous
year. In its contribution to Indias imports, gold ranked next only to petroleum and its
derivatives, vital energy inputs for Indias new economy. Gold in fact, contributed to
30 per cent of Indias deficit on trade account that year. And it was plausibly argued
that the feverish buying of gold was forcing the Indian rupee to new lows as global
traders sought to maintain a rough parity with the price the Indian consumer was
willing to pay.
In the official view, the higher duties imposed on gold imports beginning 2012 were
an absolute necessity to stabilise the economy. Corporate India though, had a
different perception. In its annual report for FY 2012-13, Titan Industries Ltd which
has a reputation for making precision watches but earns over 90 percent of its
revenue from jewellery reported that the year had turned out to be very special
because the rise in the price of gold started tapering off quarter after quarter during
the year, and finally crashing in April (2013) to April (2012) levels.
Titan is a part of the Tata group, one of Indias most storied business empires. It
seemingly had ample grounds for worrying that its own position had eroded as the
gold jewellery market turned adverse. This was partly because regional players
which should have remained confined to their narrow domains, started exhibiting
much larger ambitions. Companies were starting to get listed, much larger stores
were being opened across the country and substantial investments were being made
in marketing. And then most disappointingly of course, the policy regime had turned
unfavourable with the duties on gold import being raised. This sober stocktaking was
followed by a positive signal to Titan shareholders of better things to come. There
was reasonable prospect, the company announced, of a reprise of the decade-old
5
story of India Shining, when the feel good factor was seemingly the principal
driver of the economy. India Shining as a story, Titan declared, provided the
tailwind for its jewellery division for much of the previous decade and that
momentum was still very much there even if less pronounced. In fact, the company
was prepared to assure its shareholders that there would be some acceleration in
this story, post 2014 elections.
India Shining is in the lore of the marketing profession, remembered as a case of a
nation being branded for sale in global markets as a worthwhile place to invest. Its
origins as a marketing trope are not yet properly recorded, in part because the media
which ardently promoted the mythology is not quite keen to recall how it went
overboard with a propaganda device founded on quicksand. The mythology really
begins in the last months of Atal Behari Vajpayees tenure as prime minister in 2003,
though few then thought that the reign of the affable and avuncular head of the BJP-
led government was in imminent danger of ending. The Indian economy had just
come off a very bad year with a monsoon failure in 2002 perhaps the worst in close
to two decades devastating livelihoods across large swathes of the country.
Probability laws favoured a good monsoon the following year and indeed, rainfall in
2003 was most beneficent both in quantity and geographical spread. Within a couple
of months of the official withdrawal of the monsoon usually announced by the India
Meteorological Department at mid-September the signals were clear. The
economy would enjoy in statistical terms, a record year of growth. The statistics
though, could not quite capture the trauma that large numbers in the country were
just recovering from. Nor could they even begin to understand the terms on which
the recovery was negotiated by each of the drought hit individuals and households.
Disregarding this apparent matter of detail, two senior advisors in economic policy to
the Vajpayee government, Vijay Kelkar and Ajay Shah, just two weeks before the
Diwali festival that heralds months of supposed comfort after all the hard work of the
sowing and harvest, wrote a front-page article in the Indian Express which in
retrospect needs to be preserved as an instance of branding gone disastrously
wrong. Titled Why is this a very happy Diwali? Top answer is reforms, the article
published on 22 October 2003 argued for a decisive rejection of the cynical view
that the rain-gods were solely responsible for the new economic dynamism which
had created a feel good sentiment all around. Momentous changes were underway
6
and these would not be reflected in the reflexively cautious academic or official
understanding because of lags in the statistical system. The corporate sector was
doing well and so too was manufacturing. There was clearly .. something deeper
going on: it (was) not just (about) a good monsoon. And with all the evidence
considered, the answer to the whodunit was very clear: the reforms did it. Indeed,
said Kelkar and Shah in perhaps an unintended compliment to the process that
Manmohan Singh had begun as Finance Minister twelve years before, for many
years, the reforms process was criticised as pain and no gain. The results are now
manifestly visible. Having tasted the rewards of all the labours that had gone into
the reforms, the authors exhorted an unidentified collective undoubtedly intending
the whole country, including the smallholder farmers just coming out of a drought-
induced disaster -- to come together and put our shoulders behind similar far-
reaching reforms in areas that had not gained from the enlightenment till then.
Feel good was soon the slogan on the lips of every candidate of the BJP and India
Shining became the partys claim to a renewed term in office. It was a sales pitch
that the media joined in eagerly to promote. On 13 April 2003, as the campaign for
the general election to parliament entered its final month, the Times of India (ToI)
carried an extended interview with Prime Minister Vajpayee, which was in effect, a
celebration of his tenure and an anticipation of more to come. The preface to the
interview put it with absolute clarity: Two years ago it would have been difficult to
imagine Atal Behari Vajpayee heading the next government. Today, on the eve of
election (sic), he is clearly the front-runner. Not only this, his stature has grown and
the grand old man is seen (as) the biggest political brand. Sachin Tendulkar of
politics, you might say. Hes the one setting the agenda be it on economic reforms,
contentious issues like Ayodhya or peace with neighbours.
In an editorial accompanying the interview the same day, the ToI celebrated
Vajpayees greatly adaptable and acceptable qualities as a political figure under the
headline Vanilla Vajpayee. Atal (sic) was the flavour of the month, the newspaper
observed, since he was very much like vanilla ice cream. There may be bigger,
bolder flavours, but it was ultimately, good old vanilla that would prove the winner,
because it could blend in harmoniously with any other flavour or mood. By these
criteria, Atal-ji (sic) had nurtured his image carefully, so that he appeared to be all
things to all people.
7
India Shining proved a monumental dud in terms of the electoral rewards gained by
its most breathless proponents. The Congress, having approached the election with
something akin to a sense of dread, stitching up regional alliances that it was by
doctrine averse to in a desperate bid to stem the BJP tide, was initially disoriented by
the magnitude of its victory. For those steeped in ardour for the Congress dynasty,
the verdict was an unequivocal affirmation of its leader Sonia Gandhi's claim to prime
ministership. Reacting with almost visceral disdain for this proposal, the BJP fielded
its most theatrical elements to loudly rail against any prospect of the Italian-born
Sonia Gandhi assuming the post. Vajpayee went into a seclusion that soon became
permanent retirement from politics. And his successor and close political associate
Lal Krishna Advani soon stepped up with his own judgment about the election
results. There was no positive mandate inherent in the verdict, he declared. What
was evident instead was a national outcome that was an aggregate of several
conflicting regional verdicts. Advani cautioned against reading the election results as
a "mandate for any alliance, much less for any single party and certainly not for any
individual". Having won a mere seven seats more than the BJP, the Congress was
obliged to follow the path of "maximum consensus" not merely within its alliance, but
also with the opposition.
In the immediate aftermath of the election results, it rapidly became accepted
wisdom that the BJP-led alliance had been turned out because of a mass upsurge of
those at the receiving end of its economic policies. The feel good mythology was
turned on its head. By that logic, it seemed appropriate for the Congress to reverse
course. Investors in the market soon stepped up with an explicit warning that
honouring the political mandate could mean economic suicide.
The arithmetic of the parliament that emerged made the Congress dependent to a
great degree on the sustenance of the parties of the left, which had turned in their
best performance in a long time. And spokespersons of the left were quick to affirm
that they would be keenly interested in ensuring a course of policy congenial to their
interests. On 14 May 2004, foreign institutional investors (FIIs) that had taken strong
positions in the stock exchanges, pulled out in droves, driving down the Sensex by
330 points, or six percent. Under a front-page headline that read Red Alert: Markets
See Red as Sonias Red Ally Flashes Red Card at Sell-off, the ToI reported next
8
day, that the drop in the Sensex was the sharpest in over four years and had wiped
57.3 billion off the aggregate value of the market.
The didactic purpose of the mass evacuation from the market had seemingly not
been served. When the markets reopened after the weekend break, the FIIs drove
down the index by 842 points or 17 percent in a mere twenty-two minutes. After
emergency measures to staunch the haemorrhage, the Sensex closed the day 565
points lower. The erosion of value was estimated by the ToI the next day at 133
billion. Under a headline that described an ostensible quit India movement by the
FIIs a phrase deeply evocative of a moment in Indias anti-colonial struggle the
ToI reported that Manmohan Singh, still described as Finance Minister designate,
had called up the incumbent in that position, Jaswant Singh, to ensure that effective
measures were taken to stop the stock rot.
It was that very day that Sonia Gandhi gave up her putative claim to the prime
ministers post, nominating Manmohan Singh instead to lead the complex political
coalition that had emerged in the 2004 general elections. And Manmohan Singh was
instantly seen as a rather amenable figure from the perspective of the markets. On
20 May, the ToI reported with some satisfaction on its business pages , that the
markets were on a recovery trip and had gained 129 points.
Manmohan Singh retained his cautious and unadventurous attitude towards policies
that might potentially step outside the bounds of strict fiscal rectitude. Because of his
status as an unassuming bureaucrat who had been propelled into a position of great
authority in an act of benediction, Manmohan Singh was never really his own man.
Within the Congress party, it was the accepted wisdom that despite the lustre
displayed in patches, most parts of the country remained in a slough of despond. A
semblance of social and economic equity had to be restored if the democratic polity
was to be sustained. The Congress party, with Manmohan Singh reluctantly playing
along, saw the answer in revisiting the populist commitments of the 1970s and early-
1980s. This meant providing a stimulus to the rural economy in an effort to directly
address poverty.
The National Rural Employment Guarantee Act (NREGA) was passed in 2005,
assuring every willing individual at least a hundred days of manual unskilled work, in
the 200 poorest districts of the country. The fiscal year 2006-07 was the first full year
9
of implementation of the National Rural Employment Guarantee Plan (soon named
after Mahatma Gandhi and now known as the MGNREGP). The programme was in
2008-09 extended to the entire country at the urging of Rahul Gandhi, the Congress
party prince looking for a platform to prop up his destined role.
Till the early years of the UPAs second term, which began after a fairly convincing
electoral triumph in 2009, there was no hint that the fiscal commitments made in
extending the right to work were a serious strain. In August 2010, Finance Minister
Pranab Mukherjee spoke with absolute confidence about further extending the
charter of rights and entitlements for every Indian citizen. The right to education
would be the first step, for which a possible outlay of 2.31 billion over three years
would be set aside. Following this, the next two priorities would be to operationalise
the rights to food and health. This level of ambition, Mukherjee said, would have
been beyond imagination in the 1980s when the government, despite best intentions,
found itself stymied in all efforts to directly address poverty. What had made the
unthinkable a distinct possibility was the turning of a page in the 1990s, which
generated the second wind in Indias growth story.
It is accepted by wide consensus that the Indian economy in 2003-04 moved to a
new trajectory of near double-digit growth. There is also general agreement that one
of the most significant contributions to the new growth momentum came from the
rise in gross domestic savings. After being in negative territory for years together,
public sector savings turned positive in 2003-04 and increased strongly the next few
years. Also turning in a strong performance was private corporate saving. The year
2008-09 brought about a partial reversal of both these trends, since private corporate
earnings were deeply eroded by the global economic downturn, and the compulsion
of fighting the recession through a fiscal stimulus obliged the public sector to
undertake a number of fresh expenditure commitments.
A sudden blossoming of foreign investor interest was another notable change in the
Indian growth profile in this period, portrayed in the media as a signal of confidence
in the Indian economy. The real picture has been rather mixed. Far from being a real
breakthrough, the surge of money coming into the Indian markets was probably just
a temporary high, arising from a lucky number drawn in the casino of global finance.
After a decade-and-a-half of indifferent or only sporadic interest in the Indian market
10
as destination for both direct and portfolio investment foreign capital began
flowing in to Indian markets in significant magnitudes from about 2003. The sudden
upward spike in fact, begins at just the time that the India Shining mythology is
beginning to gain traction.
Except for insiders, it is never easy tracking the entry and exit of speculative money
into the stock markets, though the index of share prices offers a reasonable metric. If
the Sensex were the guide to locate that specific moment when India became a hot
investment destination, the 2003 monsoon was it. By conventional understanding,
accepted in both the folk and scientific accounts, the monsoon sets in over the state
of Kerala on Indias south-western coast on the first day of June. There are years in
which it announces a delayed arrival; even years when it fails to appear for weeks
together, by which time panic is the normal response among large masses of Indias
people.
In 2003, the monsoon arrived on time and showed the early vigour that promised
quick progress and plentiful rain. In June 2003, the Sensex, after hovering in the
3000s range for close to ten years, only shooting up to the mid-4000s in brief
episodes which were quickly brought down to reality, increased by close to 10
percent. The next month it further went up by a like magnitude. And then there was
seemingly no stopping it. By December 2003, it had crossed the 5000 mark for the
first time and was bidding fair in April the next year to top 6000 at just the time that
the India Shining mood was peaking and the affable and avuncular Vajpayees
claims to a fresh mandate were being widely described as irresistible.
Vajpayees banishment into political oblivion by a most inconvenient electoral
mandate led to a few months of sobriety on the markets. The earlier panache,
though, was rediscovered with the reassuring figure of Manmohan Singh in charge.
By November 2004, the Sensex had actually topped the 6,000 mark. Conquest of
the next psychological peak of 10,000 came in January 2006.
In the midst of all this, there was little room for considering certain evident sources of
deeply vulnerability. Portfolio investments though large in volumes, remained
volatile, with large inflows typically being accompanied by large withdrawals. Thus
after registering a historic high of 2.22 per cent of GDP in 2007-08, net portfolio
investments (i.e., inflows less outflows) fell to a negative figure the following year as
11
investors pulled out in the wake of the global economic meltdown. Inflows recovered
since, but to this date, have continued showing a certain eccentricity and
unpredictability that leaves Indian capital markets in a seeming state of unending
confusion.
What is classified as FDI too is a very ambiguous entity. Rigorous research to
uncover the reality behind the mythology, indicates that much of the inflow of FDI
originated in known tax havens, especially Mauritius. A large part of the inflow was
for acquisition of shares in existing companies and could not be deemed to have
added to productive capacity. And over 70 percent of the money coming in was
destined for the services sector notably real estate and construction and financial
services as against just over 20 percent in manufacturing.
As interesting as the Indian growth story since 2003-04 perhaps more so if the
connection between the two were to be drawn out has been the escalation in credit
creation. The chain of linkages here is very simple: large volumes of money coming
in from overseas would under free market logic, have pushed up the value of the
Indian currency. To stop this, which would have possibly led to a severe contraction
in all export-oriented sectors, the RBI had to continually buy up the foreign currency
coming in, pumping equivalent rupee amounts into the banking system. Flush with
this injection of liquidity, the banks in turn pumped up their lending against real
estate and consumer durables, marking out for special attention the aspirational
middle class that was suddenly finding its dreams within reach.
It all turned sour in rather quick time. The share markets began to show signals of
incurable fickleness from about early-2008 and the money that was otherwise
seeking returns from investment in assets, began flowing into the commodity
markets, pushing up prices in a persistent inflation that lasted till at least the middle
of 2013. The engine of credit creation was pulled in by the RBI which found the risks
of inflation far more serious than dampening the free spirits of the aspirational class.
Demand for the glittering new symbols of affluence automobiles and real estate
began to falter and the large corporate entities that had made hugely debt-leveraged
investments in these sectors began disposing of assets to just stay solvent. Credit
portfolios of the banks turned problematic. Of the mountain of non-performing assets
held by the countrys banks today, a very large proportion is contributed -- according
12
to top investigators -- by some of Indias most storied corporate firms. From about
late 2010, a cascade of revelations began to emerge about the unsavoury political
deals that had been made by the UPA administration to gift-wrap scarce resources
such as the communications spectrum and mining lands -- for the untrammelled
profiteering of chosen corporate cronies.
Despite the greater than anticipated majority won in 2009, public endorsement for
the UPA, at least in terms of middle-class sentiment, was soon in free fall. In April
2011, in a strategic time interval between Indias victory in the cricket world cup and
the beginning of a month-long carnival of uniquely Indian provenance called the
Indian Premier League of cricket the anti-corruption campaigner Anna Hazare led
a virtual insurrection of the middle-class, demanding a legislation to deal with official
malfeasance that would have virtually handed over dictatorial powers to an
unelected council of the virtuous. That mass referendum through the media,
disavowing all residual trust in the UPA dispensation was carried out one more time
and with more devastating effect in August that year, by a newly constituted social
coalition that gathered under Hazares benign gaze. The illusions were crumbling
and Manmohan Singh and his entire leadership team, left floundering for a credible
response that would salvage public confidence.
Political and economic managers of the UPA from then on proved increasingly
reluctant to emerge from the cocoon of comforting formulaic thinking into which they
had withdrawn. But as elections neared, the compulsion to stick with populist
commitments unveiled in the UPAs first years grew stronger. In July 2013, the UPA
pushed through a presidential ordinance making food security a basic entitlement for
every Indian citizen. Late the following month, both houses of parliament passed the
relevant law. The markets went instantly into a swoon and the rupee plunged to a
new low. Arun Shourie, the BJP ideologue who oversaw the disinvestment process
as a minister in Vajpayees cabinet whether out of anxiety at the political capital
that the Congress could harvest or out of sincere commitment to fiscal prudence
called for the food security bill to be scrapped.
The Congress response to a deep erosion of faith from its middle-class constituency,
spoke of a stoic determination to risk the alienation of this most voluble strata,
weather the adversities of a bad press, and stake its political future on the potential
13
electoral rewards of staying the populist course. This has been one of the dominant
themes of the elite insurrection against the UPA: that the effort of the productive
sections which have put India on the world map go unrecognised while the political
class as the now common term of art puts it entrenches itself firmly in the seats
of power on the strength of a clientelist relationship with the poor. A highly liberalised
tax regime has been an integral part of the economic reforms package since 1991.
Tax compliance has perhaps increased but so too has the sense of entitlement. The
Indian middle-class has begun demanding proportionate attention to its specific
interests for all the tax rupees that it pays.
If an alternative discourse emerged, it remained on the fringes. From early-2012, the
UPA began to be seen as sunk in terminal paralysis, pulled in opposing and mutually
contrary directions because of the diversity of constituencies it had to serve. The
elite discourse then seemingly switched towards identifying and promoting the
political leadership that would be responsive to its needs. When Narendra Modi
travelled to Delhi in April 2013, he encountered demonstrations on the streets, but
enraptured crowds within the halls where he addressed gatherings of the elite. And
at a policy dialogue organised by a media house that had just passed into the control
of the countrys biggest industrial conglomerate Reliance Industries Ltd he was
given an hour on stage to put forward his perspectives for the future. This was
followed by a setpiece interview in which he came up with all the right answers:
pouring subtle scorn on the Planning Commission which is regarded in business
circles as a useless inheritance of the days of centralised bureaucratic planning,
talking up the benefits of foreign direct investment in various sectors, including
defence, and making a case for reform of the labour laws to enable rapid changes
and turnover of factory workers and office staff. There were few of the hard edges of
Modis early political persona on view. Just the seemingly inclusive rhetoric of
development that nobody can quite challenge without sounding like a person right
out of the dark ages.