New Delhi: “Will the erosion of democracy, if continued, affect India’s growth?” asks economist and former Reserve Bank of India governor Raghuram Rajan in a Financial Times opinion piece as he addresses the connection between India’s economic growth trajectory and Prime Minister Narendra Modi’s popularity among voters.
In the piece, titled ‘Trading democracy for prosperity is a false choice for Indians’, Rajan argues that the government “is popular despite the lived economic experience of people, not because of it”.
He points to “growing urban joblessness”, the rise in the share of jobs in the agricultural sector — “an aberration for a growing developing country” — and the shift under the Modi government to industries like chip manufacturing, where India has little comparative advantage.
He acknowledges that certain segments of the economy, such as capital-intensive sectors, skilled services exports, and others are doing well owing to solid GDP growth. He argues, however, that a “two-paced economy” is bound to eventually affect “the flourishing side”. According to Rajan, a government needs to acknowledge the “central economic problem” in order to “purpose useful solutions”.
“India should build on its strengths, including services exports and democracy,” he writes, arguing that “the industrial world is not ready for another China”. “Stronger democracy will also make India a more trusted destination for foreign investors,” he goes on. Rajan believes that a strong Opposition and free press will help point out the government’s mistakes and says that the possibility of India giving up both prosperity and democracy in the elections is “frightening”.
An explainer by The Economist, ‘Why India’s election is the most expensive in the world’ describes how expensive “the biggest democratic exercise in history” could be, with spending expected to reach Rs 1.35 trillion this time. While the large size of the Indian electorate could be a factor, the statistics in the piece show how “over the past two decades, election spending has increased by 165 percent (after adjusting for inflation) — far more than the 27 percent rise in the population during the same period”.
A lot of money is now being spent on digital marketing, the piece says, with data from Google suggesting that “spending on adverts on its platform in the months leading up to this year’s election was six times greater than the equivalent period in 2019”. Suggesting that “successful candidates tend to be wealthy”, the piece talks about the large amounts spend to give gifts to voters — “which can range from booze to TVs to goats, or outright cash bribes”. “Cash-for-votes is a common practice in other developing democracies,” it adds.
Another article in The Economist, ‘India has quietly transformed its ports’, examines the “deeper transformation” that India’s ports have been undergoing. According to the article, under the Modi government, capacity and traffic at “major ports” have almost doubled. “India rose from 54th in the World Bank’s ‘logistics performance index’ a decade ago to 38th last year,” the piece says.
The article notes that “the maritime sector accounts for 95 percent of India’s trade by volume and 65 percent by value”, and that although the industry “still punches below its weight globally”, it is close to how much the UAE accounts for in global traffic. Transformation of port infrastructure is linked to both trade and reform, and “if India can do it with ports, that is a hopeful sign that it can do it with other parts of the economy, too,” the piece says.
In a Bloomberg opinion piece, ‘Why India Struggles to Keep Its Food Safe’, columnist Andy Mukherjee highlights the challenges in India with respect to maintaining food safety standards due to “lax regulations” and “sketchy monitoring”. He points to the controversy surrounding the MDH and Everest masalas as an example and says that “nationalistic pride” exacerbates the issue, referring to how the Food Safety and Standards Authority of India has called these accusations “false”.
He also refers to how sugar levels in Nestle’s baby food products and Indian cough syrups have caused alarm globally. On the other hand, it’s “good news”, that Patanjali was reprimanded by the Supreme Court for pitching herbal remedies as “permanent solutions”, he writes.
“To ensure that only quality food and drugs are sold to Indians — and by Indians to the world — strong regulations, backed by a well-funded, nationwide monitoring system, are urgently needed,” he suggests.
A Bloomberg report highlights a significant surge in the sale of luxury homes in India, tripling over the past five years, driven largely by increased “demand from non-resident Indians”. The proportion of luxury homes among new housing units has risen to 25 percent from just 11 percent in 2019, while affordable housing supply is down to 18 percent from 40 percent in the same period, indicating a shift in the trend in the real estate market towards higher-end properties, according to the report.
Journalist jailed for Covid reporting to be freed, Nordic-Baltic ties in focus
Chinese journalist Zhang Zhan, believed to be the first person in China imprisoned for reporting on the COVID-19 pandemic, is likely to be released soon after serving a four-year sentence. Read The New York Times’ report to know more.
Swedish Prime Minister Ulf Kristersson Monday hosted a meeting with German Chancellor Olaf Scholtz and the Nordic prime ministers in Stockholm amid increasing security threats from Russia. Read The Baltic Times’ report for more.
(Edited by Mannat Chugh)
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