The crushing victory of the Bharatiya Janata Party and India's newly elected Prime Minister Narendra Modi has brought much hope to exasperated Indians and foreigners alike. With promises to revive a nation that 1.2 billion people call home, the so-called "Modi wave" has surged across India. Over the past few months, Indian equities have risen close to 20 percent. The rupee, which lost 13 percent against the dollar in 2013, has been one of the best performing.
After a prolonged period of political drift and paralysis, India's new government will be led by a man known for his decisiveness. Just as Japanese Prime Minister Shinzo Abe's return to power in late 2012, after six years of political instability, reflected Japan's determination to reinvent itself as a more competitive and confident country, Narendra Modi's election victory reflects Indians' desire for a dynamic, assertive leader to help revitalize their country's economy and security.Like Abe, Modi is expected to focus on reviving India's economic fortunes while simultaneously bolstering its defenses and strengthening its strategic partnerships with likeminded states, thereby promoting regional stability and blocking the rise of a Sino-centric Asia.
What Modi offered to voters was in effect a mix of market-friendly growth, muscular nationalism rooted in Hindu lore and the promise of a militarily-strong India. The extent to which this mix proved to be an elixir, particularly for India's young, aspirational, technology savvy generation, would be obvious from the outcome of the elections. The Congress party has suffered its worst defeat in its history. Parties that banked on the votes of the lower castes and Muslims have been routed. And those controlled by families in the states have been flattened. Modi's appeal has thus cut across India's traditional fault lines. In one fell swoop, the BJP has widened its social base and, no less important, established its presence in virtually every state of India. It can now legitimately hope to fill the void created by the debacle faced by the avowedly secular and populist parties. This election therefore heralds a tectonic shift in Indian politics.
Some Indians cling to the warm and fuzzy notion that the country is slowly but surely fixing itself and improving its imperfect democracy. Indeed, several steps the government, Supreme Court and Election Commission have taken have done much in this regard. The introduction of electronic voting machines is often touted as an example. Stricter enforcement of "good conduct" norms has also helped. Politicians are now fined for provocative speeches, campaigning without prior permission and announcing sops close to polls. But all this is just a drop in the bucket. When India's election results are announced on May 16, many in this nation won't be sure whether it was their votes, or black money, guns and booze that determined who will run the world's largest democracy.
Dealing with resource scarcity will compel companies to adopt new technologies, new manufacturing processes, and new management practices -- all of which will drive innovation faster and faster. As the global middle class expands, there will be massive opportunities for entrepreneurs to create more efficient industries and more productive business ecosystems. Technologies and industries will collide in new and unexpected ways, and these entrepreneurial mashups, inspired in part by scarcity, will potentially produce greater utility and prosperity for society at large.
Currently, India's labor laws only apply the 20 to 25 million workers in what is called the "organized sector," which includes registered corporations and businesses. New higher minimum wages must also be made to apply to the other 175 million workers who work in the unorganized or unincorporated sector, as farm hands, pushcart vendors, construction workers, private security guards, household help, drivers, shoe shiners, waiters, shop help etc. Currently, this is not happening.