In India, Prime Minister Modi Suffers Defeat? | Connecting the Dots with Dr Wilmer Leon (2024)

Well, this election has, it's actually, I should say that the election itself is not going on today. The election has been going on for the last seven odd weeks, 45 days. So it started more than 45 days ago and it ended, the last voting day was June the first. It was a seven phase election in which the Election Commission organized elections in different parts of the country over seven phases. The counting is what's going on today. It's not complete yet. So we basically have an idea mean roughly a little over half the votes have been counted, and we can say that pretty well. The trends seem to be set. Nothing has changed very much over the last two or three hours. And what we see here is that Mr. Modi has been humiliated. Let me explain why Mr. Modi went into this election campaign with the Hubristic slogan of this in Hindi, you say ispa.

(03:49)
So this time we will go beyond 400, 400 seats in a 543 member Loba or Parliament, the BJP at the moment, I mean that was for the larger alliance, the NDA, the National Democratic Alliance, of which the BJP is the biggest part by far. And the BJP itself was supposed to get about 370 seats. At the moment the BJP is at 240 seats, so that is 130 seats less than what they had projected to win. So that is a pretty big humiliation. What's worse for Mr. Modi is that it's going to be in the past two elections, what has been remarkable, and one of the facts which has permitted many people to say that he's some kind of very unique, amazing sort of leader who is much beloved by the country and so on. In 2014 and 2019, his party won a parliamentary majority that is more than 272 seats in the Parliament.

(05:02)
On its own, it didn't need its allies. And this is the first time a single party has won a majority since the election of 1984 when if you remember, Mrs. Gandhi was assassinated and the Congress party rode to power with the highest percentage of vote and highest seat count ever in its history on a sort of sympathy wave. And so since that time, no party has ever won a majority, and Mr. Modi won a majority twice. Now in this election, it does not look as though he's going to have a majority. If the present trends continue, he will be somewhere around two 40 seats and he needs 2 72 for a majority. This will be an even bigger humiliation for him.

Okay, so I would say that there are a number of points I want to make. Number one, India's growth figures are highly exaggerated. That's the first thing is that they have changed the way in which they compile growth statistics, which depending on which economist you are talking to is exaggerating. India's growth rate anywhere between two to 4%. And if you factor that in, then India's growth rate, which is often touted as being the fastest of any major developing country faster than China's, et cetera, does not have any of those qualifications. India should be growing much faster, has in the past grown much faster and Mr. Modi's performance is actually very poor. The second point I have to make is that even the growth we have has been powered by unsustainable stimuli and it has created exceedingly high levels of inequality. So that is a problem.

(11:02)
So growth is low, inequality is high, inflation is high, unemployment is high including youth unemployment. So the unemployment crisis in India is very high, even though India's labor force participation rate, that is to say the number of people who are actively either employed or seeking employment out of the working age population is actually quite low. So even with this sort of social, shall we say, benefit that India has, granted, the BJP unemployment levels are very high. Youth unemployment is so high that for individual jobs, maybe the government advertises or some company advertises a dozen jobs and there will be literally hundreds of thousands of applications for a dozen jobs. I'm not kidding you. And there have been riots around issues of employment and so on. So we can again discuss that. So unemployment is that. Now, if this whole litany is not bad enough, Mr.

(12:10)
Modi has willfully in order to show what a strong man he's who can take decisive decisions and actions has imposed pain on the Indian economy on at least three separate occasions, which is completely, it's uncalled for unnecessary. But again, to do this, the first was if you remember the demonetization exercise when overnight the government declared that currency notes over the value of 500 rupees were considered invalid and gave everybody a short period of time to go and exchange them for lower denomination notes. Now, for an economy which runs on cash primarily, this was a disaster. Remember that India's economy, the formal employment in India's economy is only about 7%. So 93% of Indians work in an informal economy where cash is king. These people were suddenly thrown into a crisis. People who had squid away savings in high denomination notes had to go and exchange them. And many very often they had to stand in long lines and it created a huge mess. Secondly,

Well, he claimed that he was going to try to create a cashless economy and remove the black money from the economy, et cetera, but none of this was proved true. I believe that he was simply talking to certain, shall we say, big financial wizards who want to introduce cashless payment systems in India and want to benefit from the bonanza. And he basically doesn't talk to a lot of people. So one or two people who have his ear can actually get him to take these decisions. I mean the demonetization exercise. And a third thing was that he was trying very desperately to win an election in the giant state of UTA Prade elections were due. And he thought that somehow by doing this, he would prevent the opposition from essentially spending any money. So then he declared a covid lockdown at a time when there was no covid detectable in India.

(14:26)
And then a year later when you saw all those bodies floating down the Ganges and all those funeral pies, he was nowhere to be seen. He was missing in action. There was no government policy. People just had to somehow make do with what they had. State governments did do a lot, but not, he did not. And then finally he imposed a goods and services tax, which again, given that India operates on so many small and tiny enterprises, it was simply another burden on people who are already too stretched to keep records in order to pay taxes. And moreover, it's a regressive tax. There is so much inequality that the need of the R is to tax the fabulously wealthy. So in India, we now have literally a two tier society where if you are one of the five or 10%, life's never been better. And if you are one of the 90 to 95%, it's really, really bad.

Yes. Essentially the Modi government, like the previous BJP government engages in a certain politics of neoliberalism or economic policy of neoliberalism where you privatize as much as you can, you reduce social expenditure, you reduce state capacity, you contract out, that sort of thing. And that has really penetrated very deep. Now the Indian economy, so for example, he has recently privatized Air India sold it off essentially, and many other state assets have been privatized. A lot of the way I look at it, I think that this would go for President Biden as well as Narin Modi, essentially they have a one point economic policy. The one point economic policy is to do what benefits the really big corporations. And India has a lot of big corporations, so that that's the economic policy Bohi has pursued. So essentially there is a handful of big titans who destroyed the Indian economy.

(18:54)
You must have heard of Gata Madani who is a particular favorite of the Prime Minister. There are the Bannis and a few others. And essentially what Mohi has done in terms of economic policy is initiate projects. For example, building roads or bridges or highways or ports or airports or what have you, which involve giving very lucrative contracts to a small number of big corporations. And that's, those are the ones who have benefited. Whereas he claimed that he had a make in India a policy or program which was going to expand the manufacturing sector. Well, if anything, the manufacturing sector has shrunk under Modi. So the kind of good jobs that manufacturing tends to create has actually shrunk under Modi rather than expanded. So this is the kind of economic policy you have. And of course that makes India all the more unequal,

Exactly, and a counterweights to China. And so India would be sort of in the Western camp and help count to China. Unfortunately, the West has had to swallow considerable amount of disillusionment because I noticed that even in some of the more mainstream western media, which would, as I say, which have been praising India until recently, there has been a certain amount of stepping back, realizing that Modi has been not as economically successful, and also realizing that Modi has been very authoritarian so that India's democracy is often has been rated by under, Modi has been rated by some international agencies as an electoral autocracy, the press freedom in India, India has been criticized on those grounds. And I think that if anything, the west has been forced to come to these conclusions and it has reluctantly come to these conclusions. And if anything, criticism of Modi is still much milder than it should be, but it is there because the facts are too difficult to look away from.

(21:53)
Having said that, as I said, the West's desire for India to be this counterweight to China has not gone away. And I should also add that particularly this party, the BJP to which Mr. Modi belongs, has historically pursued a policy of getting closer and closer to the United States. And I should also add in the process, getting closer to Israel, reversing a very longstanding Indian policy of anti-imperialist support for the Palestinian cause and so on. So these trends have certainly been exacerbated under Modi, and we'll have to see now what happens in the coming weeks and months and so on.

Really like that. But what has happened in the interim, of course, is that with the Ukraine crisis, India and the rise in the price of oil, and remember India imports a lot of oil and the rise in prices of oil in India has ripple effects throughout the economy because the cost of everything goes up because transport is a central part of the cost of anything. So inflation is already bad enough in India. If India did not have this oil deal with the Russians, then it would be even worse and it would tell on Modi even greater way. Secondly, some of his best paths like Mr. Adani and Mr. Banani and so on are actually engaged in the lucrative and shady practice of buying Russian oil at a discounted price and then processing it to power, not for that matter, and then selling it forward to essentially Europeans who can say, well, we are not buying Russian oil, but we are buying these oil or oil products from the Indians.

(25:18)
And so this India has become a sort of conduit for this oil trade and so on and gas trade with the Europeans. So that's another important thing and why India needs Russia. Secondly, India also has these border disputes with China, which go a long way. And Mr. Modi, of course, loves to sort of rattle his saber every so often in order to Ghana support across the border with China. But in India has also become dependent on cheap Chinese imports, inexpensive Chinese imports, I should say. I don't want to suggest that they're low quality, but because Indian manufacturing has declined and India's has become ever more reliant on importing cheap Chinese products. So in all of these ways, India's room for manure is actually shrinking largely thanks to the sad state of its economy, which Mr. Modi is doing nothing to improve. So in that sense, what Mr. Modi would like and what he must do are increasingly further apart.

And then you have to create the larger kind of ecology, which will stimulate growth. None of these things are being done in India. Primary education is basically, I mean, as opposed to China, where the state puts in a lot of effort into primary education in public schools, what you have is essentially a proliferation of private schools, which if your parents can afford it, you're lucky, and otherwise you go to a sadly and badly run state school, which often does not even have a sufficient number of teachers or teachers who show up, et cetera, et cetera. So there is this problem. Then on top of that, increasingly what used to be a rather good university system has also been allowed to essentially be privatized the proliferation of private universities and colleges which charge enormous fees for questionable forms of education, which is also why you see an enormous flood of Indians, Indian young people leaving the country to obtain education abroad.

(29:44)
I mean, I was educated abroad, but as a graduate student, what's happening now is lots of Indian young people are leaving as undergraduates and going abroad to various, usually other English speaking countries, but also places as you, I don't know if you remember, but when the Ukraine war occurred, there was a crisis of Indian students having to return, and I had no idea that there were Indian students in Ukraine, but are, and there are Indian students all over the place. So the government is not doing anything. And finally, there is another problem, which is that in general, the Make India program was supposed to be, which Mr. Modi advertised with great fanfare. It was supposed to attract foreign direct investment into India, but then the idea was that India would then become a platform for producing export products for the whole world market, et cetera.

(30:37)
But in reality, in general, foreign direct investment only comes in when or only comes into countries like India because these countries, these investors are interested in selling to the Indian market. They don't particularly want to sell to the foreign market. And secondly, also, the contracting out where the kind of contracting out that happens with China, and increasingly now with Vietnam and so on, that also has not been particularly good because we basically don't have a layer of manufacturing firms that are able to deliver quality timeliness and all those sorts of things. So essentially we haven't had any kind of big flood of contracting out either.

No, no. He accesses Indian labor, but it's a very small amount. It's a drop in the bucket compared to what Indians to actually absorb and to realize this demographic dividend, you need to create a lot more jobs, and they're not going to be created by Mr. Adani and his friends. And in fact, in the absence of such a strategy to really create a larger market, to create more employment, to create more opportunity in India, in the absence of a strategy to do those things, India is not going to enjoy a demographic dividend. India is at the moment sitting on a demographic time bomb because, and we have seen some of the results of that. Let me also give you an example. Not only does the government not create employment, it does the reverse. It creates, it removes good jobs and replaces them with bad jobs.

(36:54)
Consider the Indian army. Now, you think Indian army is one of the largest armies in the world. It's a large standing army, and that was one of the relatively secure forms of employment that people in many parts of India, young men in particular, but there are also women in the Indian Army would aspire to. What this government has done is replace the ordinary soldier's job, which could then you join the army as a soldier, and you move up the chain if you are good and so on, you get promotions to higher levels. This has kind of been the number of such jobs has been reduced, and they have been replaced by the so-called Agni vu scheme, which sounds very fancy. You are a fire hero or something. Anyway, this Agni Vu scheme essentially will hire soldiers for four years on a four year contract. So at the end of those four years, you could be let go. There is no guarantee of employment. Now, even if you are a right-wing, security obsessed nut, you will say this is the wrong way to have a good army.

And in this election, I have noticed that in all the areas which have, traditionally in every country, there are some parts of the country that are recruitment from which the army recruits disproportionately, and there are such parts of India as well. And in all those parts of India, the BJP vote has gone down because people are so sore about this scheme. In fact, the other thing, because in India what happens is that when the counting takes place, they count the postal ballots first. And very often the postal ballots have a disproportionate number of army veterans or army people in them, because army people tend to get posted around and they use the postal ballot to vote in their place of registration. And so these postal ballots also showed a significant decline in the vote of the BJP. So that was quite interesting as well. So you see, Mr.

(39:03)
Modi thought that he could visit this kind of economic punishment on Indian people, but somehow then still win them over by showing them what a strong leader he is. And through spewing hate, because you see in the, as I told you, this is a seven phase election at the end of the first phase, which occurred on the 19th of April. That was the first day of voting within a couple of days, I'm sure the BJP, which is backed by the way, absolutely generously by the corporate elite of India. So they have plenty of money. They must have conducted exit polls for themselves. You're not allowed to publish them, but you can conduct exit polls how you're doing. And it became very clear to the BJP and to Mr. Modi that their party was doing badly. And so within two days of that, the entire campaign rhetoric changed.

(40:00)
It went from how we are going to create a developed India with a 5 trillion economy and the whatever, the third largest economy in the world, and all this completely castles in the economic castles in the air. But we've seen that to essentially demonizing Muslims, which is what the BJ does. Whenever they realize that they're in trouble, they shift to this anti-Muslim rhetoric. So this, and the kind of rhetoric that has issued from the mouth of Mr. Modi has been absolutely horrific. I mean, it has plumbed depth of, how can you say, of coarseness that has never been witnessed, ever. And people have criticized him, but it is very clear that they were already panicking, and now the results are out and they're panicking because as I say, this kind of economic pain that you are visiting on Indians cannot be electorally costless. And you see, in 2014, Mr.

(41:04)
Modi won. It was a novelty. He was fully backed by the corporate capitalist class. The propaganda machine was in full motion, and the opposition was divided. It was not united. In 2019, they would've lost, actually, many people were saying that they were going to lose. Many seasoned psychologists were saying that. But at the very last minute, Mr. Modi pulled a defense and security rabbit out of his hat. There was an incident in which he claimed to be striking, making strikes across the border on Pakistan, on a place called Bako. And that these strikes were going to show that India was ruled by a tough leader and who was not going to give into Pakistans dastardly infiltration, et cetera, et cetera, and terrorist activities and blah, blah and so on, all of which is heavily you should take with barrels of salt. But nevertheless, this apparently transformed the election campaign, and there was the pre court assessments and the post bar court assessments, and he won. And even then he won, but he added a mere 20 something seats to his tally. So it was not such a great thing. Even with the Bala coat effect this time around, he wanted to add fully 70 seats to his tally. It's not going to be that. It's not that easy, as you can see. So there were exceptional circ*mstances, and this many people are saying is a more normal election. And in this normal election, Mr. Modi, it looks is headed for a humiliating setback, if not defeat. We'll have to see.

Yeah, I mean, in India, so the India's nuclear weapons are really not very substantial or not very many. I think it matters most in the confrontation between India and Pakistan. Pakistan, but also to some extent this border of dispute that India has with China, which we can discuss. But historically, if you think about it, India went in for a nuclear weapons development program in the sixties after being defeated in the 1962 war with China, in which China did not take any territory. China inflicted defeat on India and then withdrew to the original position just to say, look, we don't wish to solve this problem militarily. We wish to solve it through negotiation. And the Chinese have more or less stuck to that. But China has always been a very big factor in India's nuclear program. And so as you know, in 1972, India had conducted its first nuclear test.

(44:19)
India has never joined the nuclear non-proliferation treatment. And then in 1998, when Mr. The Prime Minister who headed the previous JP government, BJP LED government, I should say, that was a coalition government, but the BJP was the leading element of that coalition. Mr. Wapa, within days of coming to office, conducted a second nuclear test and then wrote a letter, this was back in 1998, wrote a letter to President Clinton, more or less explicitly saying that India having conducted its next nuclear test, was available to the Americans as a counterweight to China. So that is the larger configuration. I don't think India imagines that it is going to win a war with China, but I hope they don't anyway, because it was certainly not going to. But the weapons are supposed to be some sort of a final defense. So the nuclear weapons matter to India vis-a-vis Pakistan, and to some extent vis-a-vis China.

Well, very briefly, I would say that India is increasingly outclassed by China. China is economic dynamism, puts India to shame. I would say that the previous government, the UPA government that ruled India from 2004 to 2014 began to embark on a strategy of creating greater employment and putting more money into the pockets of ordinary Indians and taking care of basic needs and so on, which if continued, would have put India on a much better track. Certainly not as good as China, but certainly on a much better track. But of course, Mr. Modi interrupted that, and we've had 10 years of exceedingly harmful economic policies under Mr. Modi. So economically, India is outclassed by China, and I would say that India, whereas up until now 2014, when Mr. Modi was elected, India was making small progress in resolving some of the border disputes with China, which can easily be resolved.

(46:46)
Some progress was being made. Mr. Modi has largely reversed that progress. Now, very briefly, let me just say that really I think that if India were to give up its insistence on lines on the map, which were drawn by the colonial powers, and try to seek an amicable, try negotiate with China amicably in a way that takes the interest of the people in these border regions, places them foremost, rather than claim to this or that piece of territory, I think that India and China can easily resolve their border disputes. Think of it this way, China has many borders with many countries, and it has resolved all its border disputes with all its neighbors except the one with India. India by contrast also has many neighbors. It has many border disputes, and it has resolved none of them. So that's the one very simple way of looking at it. So India's position has been unreasonable that Unreason was beginning to be unraveled to considerable extent, I think under the previous Congress led government. But under Mr. Modi, all that progress has been reversed

Well, I think that what you're looking at in the United States is really the sort of cumulative result of following neoliberal policies basically, so that essentially neither Mr. Trump nor Mr. Biden are anything other than neoliberal. Mr. Biden will pepper his neoliberalism with a certain amount of socially progressive politics, but that's the only difference between them. And so what you are seeing is on the one hand, a very large protest vote against these sorts of policies going to Mr. Trump because Mr. Trump is essentially saying to people, I know you guys are suffering and I know how to solve your problems. You're suffering because of China. So instead of saying that you're suffering because of neoliberalism, which he's not going to give up on, he's offering a false solution to the problems of the people. But nevertheless, this seems to work better than what Mr. Biden is saying, which is offering more of the same.

(53:02)
And Mr. Biden's. So-called omics is actually not working either. So that, because again, it is not that different by the way, from the policy pursued by Mr. Modi. Mr. Biden also pursues a policy whose overriding priority is to look after the interests of the big corporations of the United States, not to solve the employment crisis or solve the housing crisis or to solve the health and indebtedness crisis or anything like that. And in the United States, the only people who seem to be talking a different type of economic policy are the non duopoly candidates, chiefly Jill Stein, and of course to Dr. West. These are the people who are talking about progressive economic policies. The existing duopoly has nothing to offer the American people. And let me say that by contrast, one of the heartening things about this election and the last few years in India has been that Congress, which was, I would've faulted it in the past 10 years ago, for still being too neoliberal Congress, having suffered a drum in 2014.

(54:15)
And in 2019 has improved its game on two fronts very, very well. Number one, it has engaged in some major exercises of reconnecting with the people, particularly essentially this walking journey that that Rahul Gandhi did across the country from south to north, stopping in everywhere and literally walking thousands of miles. That was a very good way of reconnecting and re-energizing the Congress organization. And very importantly, they seem to have understood that if you are to win in India in the present circ*mstances, you need to proclaim and pursue a far more progressive set of economic policies that look at issues of employment. And I haven't even mentioned, you asked me whether there was something else I should mention. I haven't yet mentioned agrarian distress being squeezed on both sides on the one side, by rising prices of inputs, which are increasingly produced by big corporations, and on the other side by diminishing prices of outputs, which again, which are typically bought by big corporations. So you can see these poor farmers being squeezed. The spate of farmers suicides in India are very high. So Congress has learned from all this that you need progressive policies for farmers, for the urban sector, for creating employment, for dealing with debt issues, providing education, all of these things. And they have actually come out with a pretty decent manifesto. And I would say that if they were to get a chance to implement it, I'm sure that they will only go further in a progressive or left-wing direction rather than pull their punches.