Why Capitalism could fail under Narendra Modi?

Bulk of the rhetoric about Narendra Modi’s becoming the PM of India has centered around the Gujarat Riots and whether he is culpable or not. Or related, the incorporation of Hindu Hardliners into the mainstream under his governance.

His proponents argue that he should be supported because his approach to governance fosters “development”.  By enabling a favorable business environment (getting speedy clearances, shortening the red tape etc. ).  And this they argue is reason enough to give him a change to replicate for the country , the wonders he has done to Gujarat.

Now two articles by very illustrious economists hint at why the development argument for Modi may not play out as expected.

First in this piece Mihir Shah, a member of the planning commission explains why the argument that capitalism initially creates wealth disparity but slowly reduces this disparity is flawed. It is flawed because the conditions for that to happen (honest relationships and transactions between business, focus on state provision of education, healthcare) are not met.

How does Mihir’s piece this apply to Narendra Modi? Fair question. Read  SIDDHARTH VARADARAJAN ‘s excellent piece to find out exactly why? Basically he argues that Modi in pursuing his pro-development capitalist agenda, violates the exact conditions under which capitalism fails to provide inclusive growth. 

Still want to vote for Mr Modi? Of course depends on what your idea of prosperity is.

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Author: harshT

Assistant Professor at the Missouri School of Journalism

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