As Prime Minister Narendra Modi is set to secure another term in office in elections starting on April 19, India's stock market has grown three times since he first took office. India's economy has almost doubled in size.
Stocks have risen because the number of Indians with enough wealth and a willingness to take investment risks has increased—to nearly 5 per cent of the population from just 2 per cent before.
But is it all as good as it seems?
The economic gains have been highly unequal. Most of India's growth relies on those at the top of the income ladder, including big, tightly controlled businesses.
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Around 90 per cent of India's 1.4 billion population live on less than $3,500 (Rs 2,92,069) a year. However, life has somewhat improved in the poorest rural areas due to expanding welfare programs under Modi. Many benefits are evident, like free grain, toilets, gas cylinders, and housing materials. Commercial developments such as LED lights, affordable smartphones, and cheap mobile data have also changed village life.
Foreigners are optimistic about the Modi economy. Banks like Morgan Stanley and JP Morgan Chase are keen to upgrade India's position in their global stock and bond indexes. Chris Wood, a respected market strategist in Asia, warned that if Modi were not re-elected, Indian markets could drop by 25 per cent or more.
A peculiar aspect of the optimism surrounding the Modi economy is that India's growth rates over the past decade have been very similar to those of the preceding decade under a government that Modi often criticises.
As real as it is, India's economic success story is also linked to Modi's ability to control all aspects of power, with a focus on showmanship.
Modi's presence is ubiquitous, especially in New Delhi. In the lead-up to the Group of 20 summit last September, his slogans claimed credit for nearly every positive development in the emerging economy.
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Even pessimists are optimistic in the bullish climate surrounding the Indian economy. While official statistics predict growth of 7.3 per cent this fiscal year, most finance professionals in Mumbai estimate it to be 6 to 6.5 per cent. The lowest estimate is 4.5 per cent, which would still outperform the United States and possibly China.
Expressing scepticism is avoided. Economists who rely on government work must be cautious, while independent think tanks are becoming scarce as they face raids and closures.
Under Modi's leadership, India's institutions of governance have been remade. Political competition has diminished at the national level, and animosity against the Muslim minority has been exploited.
Modi has used state power to drive economic progress, though sometimes with negative consequences. Infrastructure development has accelerated, welfare programs have become more responsive, and India has made significant digital advancements.
However, the abrupt demonetisation in 2016 disrupted economic activity, and the concentration of corporate wealth poses risks. The Adani Group, for example, saw rapid growth but also faced accusations of fraud, highlighting the dangers of allowing enormous influence to a few at the top.
The job situation remains challenging, with official unemployment at around 7 per cent and many more underemployed. Desperate Indians have sought better opportunities abroad, even risking their lives.
Despite challenges, India's ascent in the global economy appears inevitable. It has surpassed Britain to become the fifth-largest economy and is expected to overtake Japan and Germany soon. More multinational businesses are likely to invest in India, offering opportunities for its citizens, although achieving living standards comparable to the United States remains a distant goal for most.
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