Modinomics "turning" into muddlenomics, falls into Vajpayee's India Shining trap, hyping modest successes: Nikkei

By A Representative
In blow to him from an unexpected quarter, the top Japanese journal, “Nikkei Asia Review”, owned by the powerful Nikkei Group, has warned that the NDA government headed by Prime Minister Narendra Modi is in the danger of falling into a trap similar to the “India Shining” campaign of the Atal Behari Vajpayee government.
The high profile journal says, Vajpayee’s “splashy” India Shining campaign highlighting the wave of optimism supposedly sweeping the nation failed because hundreds of millions of Indians failed to feel Vajpayee's economic magic, and showed the BJP the door in 2004.
In an opinion piece, William Pesek, a Tokyo-based journalist, who is author of "Japanization: What the World Can Learn from Japan's Lost Decades", warns, “Fast-forward 13 years, and it is easy to suspect Modi's party is treading a similar path…”, underlining, “Modi's team is veering dangerously toward ‘India Shining’ territory, hyping modest successes and resting on its laurels when it should be accelerating the epochal reforms voters in 2014 chose Modi to enact.”
Conceding that Modi has “pulled off some vital wins”, such as cut in red tape, privatization of aviation, defense and insurance sectors, and a national goods and services tax, Pesek says, “Missing, though, are the truly audacious moves Modi promised: revising labour, land and tax laws to raise competitiveness.”
“Nor has Modi's ‘Make in India’ push created millions of high-paying jobs in export industries. Moves to upgrade infrastructure and reduce power costs are a work in progress”, the journal insists, adding, “Until Modi shakes up pivotal areas like retail, it is hard to gush about the outlook.”
Pointing out that “instead of the ‘Gujarat model’, voters are getting Gujarat light”, the journal says, there is a “reform vacuum” which is threatening “India's long-term prospects”, adding, “In a sense, Modi has fallen into the same hubris trap as Vajpayee: the cult of GDP.”
Conceding that Modi is “widely credited with transforming the place into a free-market exemplar with faster growth, fewer regulations, less corruption and strong entrepreneurship” and “Modi's mandate was to apply those successes nationally and drain the swamp in New Delhi”, the journal says, “Unfortunately, Indians may have to wait for a second Modi term.”
Pointing out that Modi faces several major challenges, the first one being “a mounting bad debt crisis” with “nonperforming loans at state-run lenders recently hit a 15-year high”, the journal says, “When New Delhi admits to about $200 billion of zombie loans, the odds are that the true figure is markedly higher.”
“That weakens India's foundations by increasing incentives to misallocate credit, warping financial priorities and blurring lines between private sector efficiency and public sector bloat. Modi has relied on the central bank to sort out a problem his finance ministry should be tackling”, it says,
“Second”, it says, is the “demographic pressure”, adding, “Roughly 25% of India's 1.3 billion people are under 15 and its labour pool will jump to 1.08 billion people from 885 million over the next 20 years. What is more, India will enjoy this swelling-workforce magic for roughly 50 years. Demographic dividends, though, become political nightmares if job growth does not keep pace. Hundreds of millions of young Indians taking to the streets in anger would be bad for business for Asia's No. 3 economy.”
“Third”, the journal says, is “regional competition”. It explains, “As Chinese production costs rise, India's chances of wooing those jobs are not assured. While Indonesia, the Philippines, Thailand and Vietnam lack India's scale, each is making a play for factories looking for cheaper and more pro-business locales. These upstarts are building better roads, bridges, ports and power grids at least as fast as New Delhi. Also, China's push to recreate the Silk Road trade links may benefit East Asia more than South Asia.”
The journal regrets, despite a few reforms, “Modi should be accelerating market-opening efforts, not throttling back”, even as approvingly quoting Maitreesh Ghatak of the London School of Economics, who says, "Modinomics has turned into muddlenomics."

Comments

Modi’s Israel visit strengthened Pakistan’s hand in US–Iran truce: Ex-Indian diplomat

By Jag Jivan M. K. Bhadrakumar , a career diplomat with three decades of service in postings across the former Soviet Union, Pakistan, Iran, Afghanistan, South Korea, Sri Lanka, Germany, and Turkey, has warned that the current truce in the US–Iran war is “fragile and ridden with contradictions.” Writing in his blog India Punchline , Bhadrakumar argues that while Pakistan has emerged as a surprising broker of dialogue, the durability of the ceasefire remains uncertain.

Incarceration of Prof Saibaba 'revives' the question: What is crime, who is criminal?

By Kunal Pant* In 2016, a Supreme Court Judge asked the state of Maharashtra, “Do you want to extract a pound of flesh?” The statement was directed against the state for contesting the bail plea of Delhi University Professor GN Saibaba. Saibaba was arrested in 2014, a justification for which was to prevent him from committing what the police called “anti-national activities.”

Why Indo-Pak relations have been on 'knife’s edge' , hostilities may remain for long

By Utkarsh Bajpai* The past few decades have seen strides being made in all aspects of life – from sticks and stones to weaponry. The extreme case of this phenomenon has been nuclear weapons. The menace caused by nuclear weapons in the past is unforgettable. Images of Hiroshima and Nagasaki from 1945 come to mind, after the United States dropped two atomic bombs on the cities.

Manufacturing, services: India's low-skill, middle-skill labour remains underemployed

By Francis Kuriakose* The Indian economy was in a state of deceleration well before Covid-19 made its impact in early 2020. This can be inferred from the declining trends of four important macroeconomic variables that indicate the health of the economy in the last quarter of 2019.

Food security? Gujarat govt puts more than 5 lakh ration cards in the 'silent' category

By Pankti Jog* A new statistical report uploaded by the Gujarat government on the national food security portal shows that ensuring food security for the marginalized community is still not a priority of the state. The statistical report, uploaded on December 24, highlights many weaknesses in implementing the National Food Security Act (NFSA) in state.

The soundtrack of resistance: How 'Sada Sada Ya Nabi' is fueling the Iran war

By Syed Ali Mujtaba* The Persian track “ Sada Sada Ya Nabi ye ” by Hossein Sotoodeh has taken the world by storm. This viral media has cut across linguistic barriers to achieve cult status, reaching over 10 million views. The electrifying music and passionate rendition by the Iranian singer have resonated across the globe, particularly as the high-intensity military conflict involving Iran entered its second month in March 2026.

Lata Mangeshkar, a Dalit from Devdasi family, 'refused to sing a song' about Ambedkar

By Pramod Ranjan* An artist is known and respected for her art. But she is equally, or even more so known and respected for her social concerns. An artist's social concerns or in other words, her worldview, give a direction and purpose to her art. History remembers only such artists whose social concerns are deep, reasoned and of durable importance. Lata Mangeshkar (28 September 1929 – 6 February 2022) was a celebrated playback singer of the Hindi film industry. She was the uncrowned queen of Indian music for over seven decades. Her popularity was unmatched. Her songs were heard and admired not only in India but also in Pakistan, Bangladesh and many other South Asian countries. In this article, we will focus on her social concerns. Lata lived for 92 long years. Music ran in her blood. Her father also belonged to the world of music. Her two sisters, Asha Bhonsle and Usha Mangeshkar, are well-known singers. Lata might have been born in Indore but the blood of a famous Devdasi family...

'Batteries now cheap enough for solar to meet India's 90% demand': Expert quotes Ember study

By A Representative Shankar Sharma, Power & Climate Policy Analyst, has urged India’s top policymakers to reconsider the financial and ecological implications of the country’s energy transition strategy in light of recent global developments. In a letter dated April 10, 2026, addressed to the Union Ministers of Finance, Power, New & Renewable Energy, Environment, Forest & Climate Change, and the Vice Chair of NITI Aayog, with a copy to the Prime Minister, Sharma highlighted concerns over India’s ambitious plans for coal gasification and the Prototype Fast Breeder Reactor (PFBR).

Health Day ads spark row as NAPi targets Britannia campaign, criticizes celebrity endorsement

By A Representative The advocacy group Nutrition Advocacy in Public Interest (NAPi) has raised concerns over what it describes as misleading advertising of ultra-processed food products (UPFs), particularly those high in sugar, fat and salt, calling for stricter regulations and an end to such promotions across media platforms.

Search This Blog