By John Richardson
WINNING an election is one thing and governing is entirely different – as the hopeless Tony Abbott is discovering in Australia (more in a later blog post).
We sincerely hope that Narendra Modi proves to be a great deal more competent than Abbott, who has confirmed our fears.
Modi’s first budget, which takes place in June or July, will be keenly watched by economic pundits who define competence as progress towards resolving the following issues:
- And end to “punitive and retroactive” taxes.
- A simplification of labour laws that dissuade employers from taking on permanent workers; and the introduction of a much-debated general sales tax.
- Reining-in stubborn fiscal deficits, regarded by many as an essential step ahead of easier monetary policy.
These might be the right initiatives to result in far-more Indians gaining access to enough food, potable water, sanitation and access to good education and healthcare.
But the evidence from Gujarat, where Modi has served as state minister, is far from reassuring. The policies he has enacted in his home state, which he wants to repeat at the national level, have failed to lift enough people out of extreme poverty.
Australia might well flounder if it fails to compensate for the end of the China-led resources boom, but the vast majority of its people already have enough food, potable water and access to decent education and healthcare. This is unlikely to change.
In Australia, also, mobile phone ownership doesn’t exceed the number of people who have toilets.
This is not a “socialist diatribe”, just plain common sense as rich people, collectively, can never number enough in any one country to achieve a country’s full economic potential. As we keep saying, rich people do not consume that many chemicals and polymers.
The cost of Modi failing in India would, therefore, be far greater than Abbott’s failure in Australia.
We wish Modi all the success in the world. We desperately want him to prove that our doubts are completely unfounded.