New Delhi’s decision last month to scrap—ostensibly on environmental grounds—Vedanta’s $1.7 billion bauxite mining project in Orissa days before Mr. Gandhi addressed a political rally near the proposed site is a body blow to the company. For investors more broadly, both foreign and domestic, the powerful young politician’s recent speeches raise questions about his economic vision.
In Orissa, Mr. Gandhi spoke of “two Indias,” one of the rich and one of the poor. Despite the loss of thousands of potential jobs in one of the country’s most backward states, he said scrapping the project did not hurt development because “development means that every citizen of India develops.”… Meanwhile, the home ministry’s bizarre visa rules—tourists must leave the country for two months between visits—make a mockery of the multimillion dollar “Incredible India” campaign to attract more visitors. An ongoing tussle over government access to encrypted emails and messages on Blackberrys—as well as Gmail and Skype—creates needless uncertainty over the safety of sensitive commercial communications. And a recently passed nuclear liability bill ignores international convention by placing responsibility for a nuclear mishap on equipment suppliers rather than solely on plant operators. Its effect on the nascent industry’s prospects may well be chilling.
Individually, each of these decisions can be explained away by the government or its supporters. Vedanta is a shady company with a penchant for corner-cutting, say its many critics. Mumbai’s new airport was ill-conceived to begin with. Tourist visas and Blackberrys could be abused by terrorists. Guilt over the failure to help victims of the 1984 Bhopal gas tragedy hijacked the nuclear debate… the pattern suggests a country that has drunk the Kool-Aid of its own hype. Or, to put it another way, India has begun to act as though it faces not the stark choices of a poor country but the often sentimental choices of a rich one.
Sadanand Dhume’s “Gandhinomics” article in WSJ is spot on. He documents the sophomoric appeal of Rahul Gandhi’s economics. Of course the larger picture is the bootlegger-and-baptist phenomenon. The charming Gandhi flys in, does the “baptist” thing of demonising what he perceives as anti-development, while “bootleggers” (politicians of all parties, and bureaucrats) soon come in and say “but of course it can be done” selling the still enormous discretionary powers of the Indian state for bagloads of money (A certain Mr. Jindal gets all the permissions, but not so Mr. Agarwal)
The gullible see an Avatar hero. But the men and women who create jobs see the writing on the wall very clearly – pay into this statist, leftist system. Else ”Nice business you got there, too bad if something happens to it”.
Nehrunomics was Delhi-run industries. Did not work. Indiranomics was soak-the-rich. Did not work. Rahulnomics – green in, greenbacks out – would not work either. But Rahul Gandhi, instead of learning something from the current Prime Minister’s ideas (if not implementations) and his own father’s relatively pro-market legacy – has decided to pivot hard left.
The question now is will we have a modern-day Swatantra faction – either inside the BJP or outside – to take Rahulnomics on. The country needs such a movement.
PS – Slight issue, Mr Dhume, lets keep “Gandhinomics” for the original Gandhi. Bapu understood much better than the “modern” technocrats the importance of decentralization and voluntarism.
PPS – The solution to the Vedanta problem, as well as to most mining/farming land problems, is simply stronger property rights and no eminent domain for private projects, no matter how big the sums involved. It is a populist message, yet one consistent with free markets. Popular capitalism, as Thatcher liked to say. Private property should once again be a fundamental right – for farmers or billionaires. The BJP must ask for the repeal of the Indian constitution’s first amendment
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As far as Rahulnomics is concerned with respect of his views against Vedanta project, one should not forget the facts upon which he supported his argument. Around 24 tribes with 8,000 people considers the place to be sacred to them. If the tribes are not giving the permission (which is in accordance to the human rights act), and Mr. Rahul is stating “development means that every citizen of India develops.”, here the development of tribal people is concerned, who have protected the place and have an emotional and spiritual bonding with that. Then who is going to decide what level of development they want? Well said Woodman “everybody have an absolute right to development, but it shouldn’t be delivered by a company, it should be delivered by the government. They shouldn’t have to give up their hills in exchange”.
What I expected and is missing in your article is the level of respect for human rights and local communities. Instead of having a political stand, there should be a touch of social concern (the affection for the land they nurtured for so long). In a country like India where increasing growth can only be brought about by exploiting lucrative deposits, we still need to be careful before pitting industrial development interests against those of indigenous peoples and the environment.
So a yes to Jindal and a no to Aggarwal is not a question. This is just a start towards being sensitive and bringing environmental issues in the front.
Thank you Nitisha for your comment.
You say “So a yes to Jindal and a no to Aggarwal is not a question” I am sorry – that is the question. This is not about environmentalism per se, this is about the rule of law, or more accurately its absence.
I may or may not agree with some green and/or “human right” laws – but at least enforce them uniformly. Hence the political nature of the argument and the attack against the crony capitalism of the Congress.
Regards.