India’s slowing economy takes deadly turn, but Modi’s in denial

Growth is falling, unemployment is rising, banks are being battered and people hounded for tax are killing themselves

Something is up in India’s economy, if only the prime minister would admit it

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‘Tax terrorism’ is driving Indians to despair. Photo: AFP

Published: 12:00pm, 23 Nov 2019Updated: 9:27am, 24 Nov 2019

When Vodafone Chief executive Nick Read told reporters in London this month the company might have to shut up shop in India, the response from New Delhi was swift and unequivocal.

Almost as soon as Read had finished his press conference – in which he alluded to two lawsuits that have left the company owing US$55 million due to changes in spectrum licensing laws – media reports were relaying the Indian government’s “displeasure and disapproval” of Read’s “tone and tenor”.

Just 24 hours later, Read had apologised to the Indian government, blaming the media for misquoting him and claiming he remained “invested in India”.

Ironically, as this was playing out, Prime Minister Narendra Modi was attending a summit of the developing BRICS economies in Brazil, where he touted India as the “world’s most open, investment-friendly economy”.

Narendra Modi with other leaders of the BRICS countries at a summit in Brasilia. Photo: Reuters

The two episodes, say critics, illustrate either myopia or outright denial on New Delhi’s part over the economic challenges headed its way. Just as danger signs are emerging in its economy – with early forecasts suggesting growth in the second quarter may have been as low as 4.2 per cent, the lowest since 2012 – many are wondering if the government’s attitude towards the business sector is making matters worse.