A Setback For Modi

Over the past four years, and despite a famously long list of chronic problems, India has emerged as a standout among emerging-market powers. As China's growth slows, Russia wrestles with sanctions and lower oil prices, and Brazil struggles to overcome recession and scandal, India has powered forward.


Since he became prime minister in 2014, Narendra Modi has cut through a famously immovable bureaucracy to help hundreds of millions of the world's poorest, most isolated people gain access to essential services, invested large sums in much-needed upgrades to India's notoriously rickety infrastructure, drawn foreign investment into once-gated sectors of the economy, and made it easier for Indians and foreigners to do business.

But Modi's hold on Indian politics, which has enabled him to implement many of these positive changes, may be starting to slip. In a series of recent state-level elections, his Bharatiya Janata Party (BJP) suffered big losses in the "Hindu-heartland" regions thought to be key centers of its electoral support. The verdict comes as a big hit for Modi and his party as he seeks to win re-election next year, and it raises the further question of whether India can continue to upstage its peers.

Two stories from this week reflect the tough challenges ahead:

  • Independent institutions: On Monday, the leader of India's central bank (RBI) abruptly resigned following a fight with the government over its independence from political influence. The government then quickly named a career bureaucrat as his replacement. Ahead of national elections next April or May, the government wants the RBI to pump more money into the economy—by making it easier for banks to offer bigger loans, for example. While growth may go up, investor confidence in responsible management of India's economy will now go down.

  • Mounting environmental problems: A report from The Financial Times reveals that India has become "the most polluted country on Earth." According to the FT, India's air quality is "far worse than China's ever was" as "more than 40 percent of Indians are exposed to five times the safe limit of particulate matter in the air they breathe." This is exactly the sort of problem that requires strong central leadership to force local authorities to abide by stricter rules for the good of all.

Modi is still very popular, but there's a risk that a disappointing election performance next year will leave him in charge of a BJP-led government that depends on an unwieldy coalition of small regional parties. If so, it'll become much harder for him to take actions that impose politically risky costs. In the meantime, Modi may find himself more reliant on support from Hindu extremists.

Given India's growing importance, for Asia and the global economy, these are stories worth watching.

The 10-year challenge might actually be an attempt to improve facial recognition technology.

It's Tech in 60 Seconds with Nicholas Thompson!


And go deeper on topics like cybersecurity and artificial intelligence at Microsoft Today in Technology.

"Many forms of government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time." So said Winston Churchill in November 1947, a time when Soviet Communism was beginning to offer the world a new alternative.

Read Now Show less

My high school history teacher Dr. Cohen once told me, as we shuffled through the school cafeteria, that computers would one day make socialism viable. Given that the Soviet collapse had already happened, and that Super Nintendo still seemed vastly more magical than anything you could put on your desk, this seemed far-fetched.

Read Now Show less

WHAT WE'RE WATCHING

Syria ISIS attack A suicide bombing in Syria claimed by ISIS killed 14 people including four Americans this week. Two questions we'll be watching: Will this attack impact the pace of President Trump's ordered withdrawal of US troops from Syria, and is the bombing part of a broader ISIS strategy to launch a wave of new attacks as US troops depart?

Read Now Show less