The promise of good times for India

The prime minister Narendra Modi has shown a curious mix of both resolve and caution. Certainly, his leadership has been on display. In the government Mr. Modi is earning a reputation as a stern, hardworking headmaster.

At his first independence-day address, he spoke of his "shame" as India’s high rates of abuse to women, inadequate sanitation, communal violence and poor work ethic. On the rape issue, admirably, he told parents to teach sons respect for women; many Indian politicians prefer to blame the victims.

Mr. Modi has made some bold decisions, too. He is scrapping the Planning Commission, a vestige of centralised economic thinking. In its place he wants a development think-tank, reportedly to host pro-market figures. That should herald more liberal policies and, as important, leave states rather than the centre to make many of the decisions on policy and spending. If that helps spur competition among states, all the better.

Zero defect manufacturing The Congress party, in opposition, is blocking plans it put forward when in government, including the idea of allowing foreign firms into the insurance market. Mr. Modi thwarted a $1 trillion global agreement by the World Trade Organisation (WTO) to facilitate trade.

An antitrade stance fits ill with his plans to open up India and make it a hub for exports and “zero defect” manufacturing. He has also ducked the chance to use the WTO deal as cover for politically involved subsidy reforms. A much-hyped infrastructure programme has yet to show. However, an early plan to rejig agriculture, beginning by selling 15m tonnes of grain stockpiles, looks hopeful.

Source: The Economist

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