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Economy Is Top Priority for Narendra Modi

The New Indian Government

Speakers: Alyssa Ayres, Senior Fellow for India, Pakistan, and South Asia, Council on Foreign Relations; Former Deputy Assistant Secretary of State for South Asia
Jagdish N. Bhagwati, Senior Fellow for International Economics, Council on Foreign Relations; Coauthor, Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries
Robert D. Blackwill, Henry Kissinger Senior Fellow for U.S. Foreign Policy, Council on Foreign Relations; Former U.S. Ambassador to India
Presider: Charles Robert Kaye, Co-Chief Executive Officer, Warburg Pincus LLC
May 28, 2014

Event Description

CFR Fellows Alyssa Ayres, Jagdish Bhagwati, and Robert Blackwill join Charles Kaye of Warburg Pincus to discuss the results of the recent Indian election. A slowdown in economic growth combined with the widespread perception of corruption and mismanagement on the part of the ruling Congress Party set the stage for a resounding victory by Narendra Modi and his BJP Party. The panelists discuss Modi's economic policy track record as chief minister of Gujarat and suggest that the economy will be the primary focus for his new government. They also discuss the 2005 decision by the United States to deny a visa to Modi and its potential impact on U.S.-India relations going forward.

Event Highlights

Alyssa Ayres on the major themes of the recently concluded Indian election campaign:

"Prime Minister Modi ran a very tight ship. His election campaign ran like clockwork and it was very tightly focused on economic growth and good governance. And based on what voters saw, with the Congress Party government, this was clearly a message that resonated for people. He has a credible authority on economic growth and good governance, given his track record in the state of Gujarat. And he very directly appealed to people's pocket-books, saying 'I'm gonna do things that will help generate jobs for our country.'"

Jagdish Bhagwati on India's recent economic struggles and their electoral impact:

"The system had slowed down. Growth had become very slow. So they were not getting the revenues, again, which come with higher growth. At the same time, the people on the other side, the left-wing—pro-left wing, anti-Modi people, were in fact, in favor of continuing to spend more and more money on social spending. Now, there's a disconnect here. You can spend more socially if you've earned revenues. But if you don't have revenues, what are you going to get? And you don't have to be a macro-economist, you just have to have common sense of the type that Modi has, and say, 'Look, this is going to lead to inflation.'"

Robert Blackwill on the 2005 decision by the United States to deny a visa to Narendra Modi:

"There is a special issue, which you all know about, but I'll just mention in passing, which is the refusal of the United States in 2005 to grant him a visa to visit this country. And that refusal persisted until the day he won the Indian election. The question arises, how much of that personal feeling he must have about that particular episode affects state policy? He has spoken to that, and said none. And has said, 'As Prime Minister of India, I represent India, and whatever I might think of this or that is not pertinent.' But he certainly would be, perhaps less than a member of our species if he didn't, in private moments, think about this."


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