Narendra Modi’s most distinctive economic policies were his worst

NARENDRA MODI, India’s prime minister, stormed to power so decisively in 2014 that it is difficult now to imagine any other outcome. But try. Imagine that the United Progressive Alliance (UPA), a tired coalition led (if that is the word) by the Congress party, had limped to victory instead. What economic policies might it have pursued in a third term? This is not an entirely idle question. Any assessment of Mr Modi’s economic record in his first stint as prime minister requires a counterfactual scenario against which to measure it. A third UPA government is one such baseline.

A Congress-led government would no doubt have built on some of its existing pet initiatives, such as a job guarantee, providing employment on public works to rural households, and an identification scheme, giving every Indian a unique identity number based on a fingerprint or an iris scan. It presumably would have allowed the central bank to continue to fight against inflation, aided by a drop in oil prices.

A third UPA government would surely have shied away from reforming India’s onerous labour laws or privatising poorly run public enterprises, like Air India. It probably would also have dallied with resolving the banking system’s bad loans, fearing it might otherwise be condemned for bailing out crony companies.

As the next election...

via The Economist: Finance and economics Business Feeds

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