Modi and the investing class have different economic worldviewsJuly 11, 2019
Budget, markets and members of the investing and chattering classes — let’s call them MICs — are, to varying degrees, unhappy and/or puzzled. As dozens of commentaries since July 5 late afternoon show, these responses are basically centred around a few new taxes/listing rules and the apparent absence of quick-acting booster shots for an economy that’s currently not exactly sizzling.
MICs agree that a government led by someone as focused, determined and currently politically unchallenged as Narendra Modi is serious about the economy. Therefore, their unhappiness and puzzlement are even more acute.
So, what gives? The answer is probably that Modi’s and MICs’ worldviews differ in some fundamental aspects. It’s these differences that even in Modi’s first term had MICs, or some sections of them, puzzled, and led some of them to privately predict a less-than-commanding electoral performance by BJP. These differences are now producing early disenchantment among MICs.
Obviously, both Modi and MICs want a strong economy. MICs look at the economy as primarily a system that gets its zest from investment enthusiasm of top economic and financial actors. Modi has no quarrel with the view that private investment is the key to sustained high growth.