Modi's growth mythology needs a reboot

Focus should switch to India's multitude of consumers and away from the China investment model.

- Andy Mukherjee

India's economy needs a readjustment, and not just in fiscal and monetary policies. The whole folklore around emulating China's multi-decade investment boom is proving to be illusory. With growth at its weakest pace in four years, it's time to put that legend to rest, and start helping ordinary families keep their heads above water.

Around this time last year, I wrote about India's growth with Chinese characteristics: anaemic consumption and overemphasis on investment. Back then, the myth of an impending tsunami of capital expenditure was still trumping the reality of a sharp slowdown in retail spending, and Mr Narendra Modi was about to launch his bid for a third five-year term.

It's unclear how much corporate bosses in Mumbai and New Delhi believed in the Prime Minister's promise of an "Amrit Kaal", an epoch of abundance in Indian astrology. But they did hop on their private jets to join him for the grand inauguration of a US$200 million (S$274 million) temple, dedicated to the Hindu god Ram and built at a site where a mosque had been razed by a mob in 1992.

The billionaires' presence wasn't just a photo-op. It had a mythological significance tied to the strongman leader's personality cult. A year before the temple consecration, Mr Modi's Finance Minister Nirmala Sitharaman had wondered if, when it came to investing, India Inc was like Hanuman, the monkey god from the epic Ramayana who had to be reminded of his own strength. "You don't believe in your own capacity...and there has to be someone standing next to you and say, 'You are Hanuman - you can do it?'" she asked at a gathering of industrialists.