As a result of last week’s parliamentary election in India, three of the world’s strongest and most transformational leaders are now in Asia: Japan’s Shinzo Abe, China’s Xi Jinping, and India’s Narendra Modi. They control a fifth of the global economy and govern two-fifths of its citizens. All have active plans to shake up their societies.
The expectations and the stakes are sky-high for each of these leaders, but none more so than Modi. Last week, Modi won the world’s largest-ever democratic election in a decisive fashion, with his party converting 31 percent of the national vote into 52 percent of the seats in parliament — the first absolute majority in the lower house of parliament since 1984. Meanwhile, the reigning National Congress Party — which has ruled India nearly without a break since its independence from Britain — turned in its worst-ever performance, losing three-quarters of its seats.
Why do Indian voters find Modi so appealing — or, depending on your outlook, Congress’ leadership so repulsive? As chief minister of Gujarat, his state of 60 million people, Modi unlocked economic gains reminiscent of China. During his 12-year tenure, Gujarat’s per capita income outpaced the national average, rising almost fourfold. Modi put his money where his mottos were — “less government and more governance” and “no red tape, only red carpet” — paring back suffocating state inefficiencies to unlock business potential and competitiveness. This is precisely what the Congress party has been unable to solve at a national level, with high inflation, lagging economic growth (at least by historical standards), and legislative gridlock that makes America’s Congress look like a well-oiled machine.
Indian voters want Modi to implement the Gujarat model on a national scale. The question is whether Modi can do so as quickly and dramatically as Indians demand. Unlike China and Japan, power in India remains woefully decentralized, and a sweeping win won’t change that. We won’t see a quick recovery in India’s legislative output, which last year was at its least productive levels in history. That’s because the houses of parliament remain split, with the Congress party and its allies maintaining a plurality of seats in India’s upper house, the Rajya Sabha. Congress holds 12 of India’s 28 (soon to be 29) states, which in turn elect the upper house members; Modi’s BJP has only five.
The next round of elections, where only a third of the chamber’s seats will be in play, doesn’t happen until 2016. And just as the BJP has derailed the Congress party agenda in an opposition role over the last decade, now we’ll see a role reversal, with Congress engaging in rabid obstructionism. Modi will struggle to cut enough red tape to match voters’ lofty expectations. When it comes to politically sensitive issues like labor, energy and agriculture, structural reforms that require legislative fixes will be hard to implement any time soon.