Why
I’m losing Hope in India – By Andy Mukherjee

No single essay has captured my life’s experiences, hope and despair, and articulated it this verbatimly. Wanted the same to be on my timeline permanently. Taking the privilege to share. –manu

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My generation of Indians has often been disappointed in
our country, and we have sometimes despaired about the direction it was taking,
but it’s been impossible for us to stop hoping.

Our own past has trained us to see the silver lining.

Opportunities we
couldn’t imagine growing up in the 1970s and ’80s emerged from nowhere and
changed our lives, and many of us believe history will keep repeating, with the
pain of the pandemic shocking the economy out of its pre-Covid inertia.

So it breaks my heart
to have to suggest to today’s rising generation that this crisis is different
than others we have weathered, that the walls are closing in again, and the
opportunity set for India is shrinking, perhaps for a very long time. The
national dream of emulating China’s rapid growth is receding — by some economic
yardsticks, we can’t even keep up with Bangladesh.

A disturbing
arbitrariness has crept into policymaking, institutions have decayed and the
economy’s structural deficiencies have worsened. Animal spirits have been
sucked out of all but a handful of firms. Zombie business groups are perched
atop the debris of debt-fueled expansion, waiting for politicians to signal
what role they still have, if any. The defeatist slogan of self-reliance, which
blighted our parents’ generation, is back. Politicians are using religious
discord and caste conflicts to drive a wedge in the society.

To make matters worse,
India has handled the coronavirus pandemic with the same inept authoritarianism
that’s come to define its approach in all spheres, economic, political and
social. With more than 9 million infections, India is the second-worst affected
country after the United States. The economy slipped into an unprecedented
recession last quarter.

The post-lockdown
economy will simply not have enough demand to consume what can be produced.
There’s some attempt to reform the supply side — labor and farm markets, in
particular. But not much is being done to revive demand, either in the short or
the long run. Some of us are wondering if this callousness will cause India’s
demographic dividend — two out of three Indians are still in the magic age
group of 15 to 64 years — to go unclaimed.

Yes, there’s time. If
India stops turning inward and embraces an open, transparent partnership with
global investors, hundreds of millions more would get a shot at prosperity. A
stagnant world economy could tap a new source of future demand. The West might
win a strong and reliable security partner in Asia. The ’90s optimism will
renew itself. But if India remains stuck in a middle-income trap, people will
soon stop asking if it could be the next China. My generation already has.

Stagnation

A previous generation
of Indians also knew violent change. My parents went from being British
subjects to citizens of an independent republic. They carried the trauma of
partition and lived through four post-World War II armed conflicts, one with
China, three with Pakistan.

They recoiled in
horror when Prime Minister Indira Gandhi — the child of the great democrat and
freedom hero Jawaharlal Nehru — suspended democracy for two years in the
mid-1970s.

Amid this turmoil,
they underestimated the shadow on their lives of the mid-’60s economic crisis,
when after a bad drought, India devalued the rupee by 37% because that was the
World Bank’s condition for assistance.

The promised funds
didn’t arrive in full. Indira Gandhi, too new to power to be in control, took a
sharp pro-Moscow turn and rejected the capitalist path that South Korea, almost
as poor as India back then, was choosing for itself. She raised tariffs,
nationalized the banks, but failed to democratize credit. The government
bloated up; small firms remained stunted.

The “developmental enthusiasm” of
Nehru’s idealistic socialism gave way to political expediency and policy
incoherence. The post-colonial dream of rapid industrialization faded. India
remained agrarian and poor, led by a tiny English-educated urban elite. At the
top of the order were bureaucrats with the power to say “no” to any expansion
in the private sector. The economy’s speed limit was 3.5%, pejoratively
described by scholars as the “Hindu rate of growth.”

To those of us whose
families neither owned rural land nor had secure urban jobs, life was about
making the most of a heavily state-subsidized education. Very few experienced
upward mobility, and often only when the U.S. or U.K. embassy stamped their
passports. The friends and family who came to see off the newly minted doctor
or engineer at the airport went back to their unchanging lives.

Rebirth

All this ended when
Manmohan Singh, the economist who became finance minister in 1991, devalued the
currency to stanch the bleeding of foreign reserves, made the rupee convertible
for trade, dismantled industrial licensing and began slashing import duties.

After the Soviet Union
disintegrated in 1991, our politicians ran out of their anti-imperialist
excuses. India engaged with a victorious West, my elder brother got a job in
New Delhi with AT&T Corp., and he brought home a shiny red push-button
telephone.

A hook-up from the
state phone company still took years, so we borrowed the neighbor’s line. But
there was no time to brood over what we lacked — or what our parents had lost
to autarky and state planning. Somehow we knew that our shortages were ending, and
our choices were expanding. India’s ruling elite had run out of options for
self-preservation. It had to open the doors to a better life to more of us.
There was work to do.

Fledgling software
firms got down to it with the help of a colorful lobbyist. Dewang Mehta sported
a luxuriant crop of hair — it was a wig — and went around selling a puffed-up
story to global corporations that their computers were going to crash at
midnight on the new millennium because of the Y2K bug. Outsourcing of
code-writing, at a fraction of what it cost in the West, began in earnest. Jobs
were created in telecom, media, technology, finance and newly denationalized
aviation industries; the median home-buying age began to fall. Global carmakers
came to India, inspired by the popularity of a small hatchback, the Maruti 800,
made locally by Suzuki Motor Corp.

China’s example
beckoned. After the June 1989 Tiananmen Square massacre, Beijing wouldn’t brook
political freedoms, but the economic reforms begun by Deng Xiaoping were deemed
irreversible and foreign investors were mostly welcomed. The economy took off.
China joined the World Trade Organization in 2001 and grew at 10%-plus rates for
20 years.

It was never going to
be easy for India to emulate its neighbor, whose single-party state struck a
bargain with foreign investors, while discriminating against its own business
class. Such stratagems weren’t possible in India’s noisy, federal democracy.
Politicians couldn’t ignore local businesses that gave them money to fight
elections. So India cleaned up the stock market and opened it to overseas
investors. This made sense. Unlike China, which was saving more than half of
its national income before the 2008 global financial crisis, India lacked the
capital to sustain a liberalizing economy through messy cycles of coalition
politics, let alone to build the roads, power plants and other basics of
missing infrastructure.

So we put our faith in
institutions. Our heritage of English common law, independent courts and
regulators held the promise of fairness and protection for all stakeholders,
and we thought these would get stronger over time. The state, we hoped, would
shrink as an economic player, and become a more robust referee. Governance
would improve, endemic corruption would recede. The anonymity fostered by
urbanization would smash the regressive caste system. We liked it when scholars
such as Yasheng Huang, a professor at MIT Sloan School of Management, said that
India could overtake China.

To me and many of my
generation, Manmohan Singh was a savior, someone who carried the scars of partition
and had known poverty as a child. He was one of us. Our disillusionment with
him was 20 years in the future.

Unfinished Reforms

The 1990s reforms in
India began with trade and investment liberalization. Tougher “second
generation” reforms in markets for land, labor, capital, energy and goods were
to follow.

However, myriad
interest groups captured the weak coalition governments that became a norm
after 1996. Even as India’s openness grew, the larger project of boosting
competitiveness kept getting shelved. Internal markets continued to
malfunction.

An additional problem
arose: Now that the government was retreating from being a producer, it had to
give land, energy and commodity rights, wireless spectrum and other concessions
to the private sector and procure — on behalf of the public — electricity,
roads, ports, telecom services and jobs. The opportunities for corruption
swelled, and a nexus of businesses, politicians and criminals coalesced to
exploit them.

By 2004, the
once-dominant Congress Party’s Manmohan Singh was prime minister, leading yet
another ragtag coalition. He returned to power in 2009, but the triumph of his
victory didn’t endure. With the world economy entering its post-2008 funk,
India’s unreformed markets, political opportunism, fiscal profligacy and the
private sector’s unregulated greed overwhelmed Singh’s second term.

Around 2010, I was
heading up editorial operations for a business TV station in Mumbai. That’s
when, surrounded by the nouveau riche (my toddler’s return gift from his host
at a birthday party was an iPod), I began to notice cracks in the enterprising
spirit of the ’90s. Peeking from those gaps was a business class seeking riches
in private rents. Praful Patel, the then-aviation minister, gave me an
interview at the newly modernized Delhi airport, which was going to replace the
shambolic terminal that used to frustrate and embarrass us. The private
consortium that had won the 60-year management contract wangled a passenger fee
to cover a big part of the cost of the upgrade — after snagging
the project. “This important condition should have been known upfront to all
the bidders at the time of bidding,” the government’s auditor noted.

Public-private
partnerships of all hues proved problematic. Uttar Pradesh, the most populous
Indian state, made a special zone for alcohol distribution and gave it to an
Armani suit-wearing businessman named Ponty Chadha, who
on a November day in 2012, went to his farmhouse on the outskirts of New Delhi
with his security detail. His brother arrived with his own henchmen. The two
sides were there to sort out a property dispute. Before long, they were
shooting at each other. Both brothers ended up dead.

The vulgarity of crony
capitalism became a lightning rod for mass mobilization. An “India Against
Corruption” movement fed a frenzy of disgust against crooked politicians and
businessmen who were usurping farmers’ land, promising to create jobs and then
not delivering. But most crucially, people’s anger was aimed at the
Nehru/Gandhi dynasty. Even as Singh nominally ran the government, Indira
Gandhi’s daughter-in-law, the Italian-born Sonia, and her son Rahul wielded
real power, as Singh’s former media adviser Sanjaya Baru claimed in “The Accidental
Prime Minister.”

Scandals surfaced and
metastasized. In 2012, the Indian Supreme Court cancelled 122 telecom licenses.
The government’s auditor said that the granting of those licenses had cost the
country $23
billion. This debacle was soon dwarfed by what the auditor said was a $42
billion scam in allocating coal mines to private firms. Those were
also scrapped.

Wounded and cornered,
Singh’s government lashed out. It began to hound long-term investors like
Vodafone Group Plc for outsized tax liabilities, charged retrospectively. It
passed a law that
made it prohibitively expensive for private businesses to acquire land. None of
this helped politically. Singh’s failures, meanwhile, were helping to make
Narendra Modi, a leader of the opposition Bharatiya Janata Party and chief
minister of Gujarat state, look good. Although his stint there had begun with
huge Hindu-Muslim riots in 2002, Gujarat’s economy grew 10% annually through
the first decade of the millennium, faster than the rest of the country. 

As the 2014 general
election approached, many voters thought that only muscular leadership could
end India’s economic paralysis and social stasis. Even those of us who found
Modi’s Hindu right-wing politics abhorrent thought his development record as an
administrator had earned him a place in federal politics. In our impatience for
growth, we ignored the warnings of scholars such as Indira Hirway that Modi’s
capital-intensive “Gujarat model” was built on generous subsidies to businesses,
and that the state was slipping in poverty reduction, human development and
hunger removal. I wrote that Modi could be like Japan’s
Prime Minister Shinzo Abe, a leader who would suppress his nationalist
instincts, and use his popularity to drive hard economic reforms.

Modi’s “Permanent Revolution”

Modi came to power
promising business-friendly policies and an end to “tax terror.” But when he
tried to undo the previous government’s land acquisition law, the opposition
attacked him for being anti-farmer. Modi had to drop
the plan.

Vodafone’s troubles in
India didn’t end. In fact, harassment by tax authorities intensified. “Sab chor
hain,” Hindi for “Everyone’s a thief,” became the state’s
informal motto for dealing with the private sector.

Then, in November
2016, Modi performed a high-voltage stunt: He outlawed 86% of the country’s
cash, presumably to unearth illicit wealth. People queued up for days to return
their worthless notes. New currency was in short supply. Small businesses in my
hometown — a shoe-making hub — couldn’t pay workers. Women-run micro
enterprises on the outskirts of Mumbai later told me that their going rate for
weaving golden threads into a sari crashed to 4,000 rupees ($54), from 7,000
rupees.

Ultimately,
demonetization was a fruitless exercise. Most of the outlawed money came back
to banks, but the pain Modi inflicted on society helped launch his cult. As
Arvind Subramanian, then Modi’s chief economic adviser, would argue later in a
book, sacrifice, “as a necessary condition for achieving a larger, loftier
objective,” resonated with the population because it harked backed to Mahatma
Gandhi’s strategies during India’s freedom struggle. That elevation of Modi in
the public consciousness was a turning point in the citizen-state relationship.
Unquestioning devotion was in; critical examination was out. Gone was the
pre-poll promise of “minimum government, maximum governance.” The dirigisme of
the ’60s and ’70s was back. “We are now entering the politics of ‘permanent
revolution’,” Pratap Bhanu Mehta, a political scientist and
commentator, presciently warned after Modi’s currency ban.

Since then, the
government’s whimsical decision-making has intensified. Don’t like what a
consumption survey shows? Suppress it. Getting flak for a slowing economy?
Publish unbelievably rosy GDP data. Think Covid could get out of control?
Impose a nationwide lockdown on four-hours notice.

“Sab chor hain” now
defines most interactions. Homebuyers don’t trust builders to deliver homes;
financiers don’t trust property developers to repay loans. The government
doesn’t trust either the builder or the lender. Nobody trusts politicians, though
Modi, like all strongmen leaders, can elicit any response he wants from the
public. During the coronavirus lockdown he asked Indians to light candles, go
on the terrace and bang utensils. They did, as told.

True, some bottlenecks
have eased. After failing to double in size in the four decades before 1991,
the national highway network has quadrupled since then. From less than 65,000
megawatts in 1990, power generation capacity has surged to almost 375,000
megawatts. Half of it is in the private sector. A further doubling by 2030,
without setting up any
more polluting coal-fired plants, is possible, thanks to investor interest
in solar and wind power.

But therein lies a
problem, a variation of the old resource crunch. A large section of the
capitalists to whom a cash-strapped government outsourced roads, ports,
airports, power stations and mobile towers is bankrupt.

Bag a concession from
the state, inflate costs, pay bribes, get financing from dominant state-run
banks, fleece consumers, siphon off funds into private accounts in Singapore or
Switzerland. This, with some variation, was the business model. In 2012, Ashish
Gupta, a banking analyst at Credit Suisse Group AG in Mumbai wrote a report,
titled “House
of Debt.” The last eight years this house has burned. It’s still
aflame and singeing the banking system.

The IL&FS Group,
an infrastructure financier-owner-operator I’ve tracked since I was a newspaper
intern in Delhi in 1992, enriched a small cabal by taking everyone — its
partners, consumers, capital providers and regulators — for a ride. I described
its 2018 bankruptcy as India’s “mini-Lehman moment.” The sudden collapse of a
highly rated institution with billions of dollars of unpaid debt froze credit
markets. The psychological impact ran deeper. Before IL&FS went belly up,
the overextended Indian private sector was putting up a brave face, chanting
“Modi, Modi,” and trying to retain its best assets with cheap refinancing. Now
the entrepreneur just wants to avoid going to jail. Economic power is
concentrating in fewer hands.

When I was growing up,
telecommunications was a government monopoly. Then came a bustling wireless
market hosting a dozen operators. Now the player count is once again down to
three effectively. One of them is in serious stress, and the other says it may
not be able to bid
for 5G spectrum next year. Another private group is establishing a chokehold
on seaports and airports, which also were once the state’s preserve.
Conglomerates may also be allowed
to enter banking because government-run lenders don’t have capital to
grow. For
my generation, swapping one form of concentration with another doesn’t look
like progress.

The rest of the
economy is still highly informal, and inefficient: 80% of the output of farms
and by small businesses goes to pay for capital, which is scarce. Labor’s
share is 20%. Workers are liberally rewarded only in a bloated public
sector, much of which ought to have been privatized long ago. Because it
wasn’t, taxpayers have to keep alive debt-addled firms such as Air India Ltd.

The push toward higher
wages should have come from higher farm productivity, which would have raised
the price of migrant labor coming to cities. India missed this page of the East
Asian playbook and failed to create a permanent urban working class.

Instead, it went
straight to global services like computer software. For a while, this shift
papered over the cracks, even though the billion-plus-people economy only
worked to meet the demand of 150 million top income earners.

My father’s small firm
made shoe uppers, my mother knitted sweaters. There are millions of families in
similar circumstances today, with two differences: Prices of everything
(including education, which was almost free for us) are decided by a small
consuming class, and a billion others must struggle to afford them. Second,
there are now gig economy jobs and microcredit, even though the income to
sustain borrowing eludes most families.

The structural
demand deficiency, as Rathin Roy, an economist at the London-based Overseas
Development Institute, describes it, was a problem even before Modi’s Covid
lockdown in March left millions of scared migrant workers without jobs, shelter
or food. Their long, lonely journeys to the safety of their village homes
revealed the shaky legs of India’s urban growth story.

Workers will
eventually return. But getting back to pre-Covid levels will only pull 40% of a
billion people of working age into the labor force, Mahesh Vyas at the Centre
for Monitoring Indian Economy says. At least 10 million jobs are needed
annually — matching China’s rate between 1990 and 2014 — to raise the participation
rate toward the world average of 66%. But the post-pandemic developed world
will nurse a massive unemployment hangover. The “End of History” ebullience
that greeted my generation of Indians in the early ’90s is unlikely to repeat.
Besides, creating jobs amid rising automation will require heavy spending on
social security, healthcare, childcare, housing and education. Four out of five
women in Indian cities weren’t in the workforce even before Covid. China,
Bangladesh and Sri Lanka are all doing better.

Entrepreneurs Redux?

It would be cynical of
me to believe that another entrepreneurial explosion isn’t around the corner,
and that a larger number of Indians won’t be kicking in the doors to progress
than in the ’90s.

In 2001, the
telecommunications firm run by Sunil Mittal, a former bicycle-parts trader and
manufacturer of the plastic Beetel phone my brother brought home, won its
millionth mobile customer. Today, Mittal is a billionaire, and Bharti Airtel
Ltd. has 293 million users in India, and another 116 million in Africa.

Crashing data prices
and cheap smartphones give India a chance to spawn its own large internet
businesses. Facebook Inc. has bet on Mukesh Ambani, India’s richest man, to
build the country’s most valuable digital carriage, content and commerce triple
play. The 152-year-old Tata Group might create its own rival “super-app” to
compete against Ambani’s.

Perhaps digital
capitalism favors “winner take all” monopolists. Rather than bemoan the
concentration of economic power, maybe I should look at the bright side?

India could also
attain the productivity boost China received from the likes of Alibaba Group
Holding Ltd. and Tencent Holdings Ltd. The country has built a robust real-time
mobile payment system, dominated by Alphabet Inc.’s Google and Walmart Inc.’s
PhonePe. October saw transactions on the network doubling from a year ago to 2
billion. E-commerce and payments data could come to replace collateral in loan
contracts, offering small borrowers like my dad’s erstwhile shoe-upper firm a
chance to get around their perennial shortage of marketable assets.

The China-U.S. cold
war — in trade, technology and finance — comes with its own rich prospects.
Indian-born executives such as Microsoft Corp.’s Satya Nadella, Alphabet Inc.’s
Sundar Pichai, International Business Machines Corp.’s Arvind Krishna and
MasterCard Inc.’s Ajay Banga are in a position to drive investments and jobs to
their country of birth.

Of late there’s also
progress on long-pending reforms. In a shakeup of rural power structures, the
Modi government has taken a political gamble by freeing farmers from the
institutionalized tyranny of having to sell their produce in designated market
yards, where they get shortchanged by middlemen. It’s also possible to be
tentatively hopeful about labor reforms. Merging 44
federal labor codes into four, for instance, may see more workers on
formal contracts, a privilege that eludes most Indian wage earners.

But there are
questions: One, how will supply-side reforms fill the demand gap? Two, when
will the broken financial system be made whole? Finally, will the narrow elite
running India by proxy agree to compete fairly, or will it simply hijack the
direction and pace of reforms for its own advantage, leaving a majority of
people behind? Modi’s government adopted a bankruptcy code in 2016, and bandied
it as a weapon against crony capitalism. But after the domestic business class
lobbied hard against losing prized assets, the insolvency reform lost its
sting. Once the Covid-19 disruption began, the bankruptcy tribunal closed its
doors to new cases. Out-of-court restructurings are a mess. A resource-starved
country is unable to free the capital trapped in dying firms.

Meaningful correction would
involve more than tweaking laws. The Indian state must put limits on its
powers, end its overreach and rebuild trust. It must clarify if the goal is to
remove “socialist” from the preamble of the constitution, something India’s
economic conservatives have always wanted, or if it is to drop “secular.” Turning
a 14% Muslim population into second-class citizens is hardly a recipe for peace
and prosperity.

Resuscitating
society’s trust is more crucial now because New Delhi can’t put itself back in
the driver’s seat. The pandemic has sapped the little fiscal strength it had.
The investment-grade rating, which took the country more than 15 years to
reclaim, looks increasingly vulnerable.

But trust requires
honesty. Indians are surrounded by social media spin and empty slogans like “$5
trillion economy by 2024” — from $2.7 trillion before Covid. How
exactly will this miracle happen? When Toyota Motor Corp. recently said it was halting
expansion because high taxation is suppressing demand, ministers
rushed to do damage control by calling it fake news. To acknowledge and fix
shortcomings in the 2017 goods and services tax — the five-rate GST is a
compliance nightmare — is to doubt Modi’s acumen.

Independent voices
that could challenge the official narrative are being muffled; institutions
that could force the executive branch to right its wrongs have been defanged.
All this runs contrary to our hopes that our media, judiciary, regulators,
professional bodies and civil society groups would get stronger over time.

India’s central bank
has seen off two governors in the last four years after unsuccessful attempts
to force bankers and their politically connected borrowers to clean up their
acts. Electoral financing is now via anonymous bearer bonds, with no checks on
the source. Recent judgments of the top court, as well as its dithering on important
constitutional issues, have invited criticism that its approach is “more
executive-like than the executive itself.”

In the absence of
institutional protection — not even of habeas corpus — trying to engage with
the state has become a crime. Protesting peacefully, demanding rights, exposing
wrongdoing by powerful people, criticizing policies have all become risky
ventures.

The prime minister has
made his core supporters ecstatic by breaking up Jammu & Kashmir, India’s
only Muslim-majority state, into federally administered territories, but the
move hasn’t exactly buttressed India’s image as a multi-religious, secular
democracy.

The West will be
prepared to overlook much of this. As Ashley Tellis, an analyst at the Carnegie
Endowment for International Peace, puts it, the exigencies of balancing China
would force the West into a “constrained
acquiescence to partnership.” That’s a poor substitute for “the
enthusiastic boosting of India that would otherwise occur if its liberal
credentials were not contested.”

The Indian middle
class, though, may be less forgiving. In economist Albert Hirschman’s
framework, the “exit” from India option was only for a minority. Others had to
stay, and it was their “voice” that kept alive Indian democracy.

Now a Muslim friend
from my hometown says he wants to emigrate because his seven-year-old daughter
is being reminded by her classmates that she’s different from the Hindu
majority. A bank analyst in Mumbai wishes he’d left long ago. He reckons on
many years of sub-5% GDP growth. The U.S. investor visa program saw a 400%
jump in demand from Indians between 2016 and 2019. Modi’s supporters
troll dissenters on social media, and ask them to “go to Pakistan.” As many as
7,000 high net worth Indians left in 2019, according to Global Wealth Migration
Review. That’s 2,000 more than in the previous year. It’s unlikely any of them
went to Pakistan.

Wither India?

My mother’s side of
the family comes from Faridpur, in what is now Bangladesh. Once a part of
India, Bangladesh
will overtake it in current per capita dollar income this year. When
and how did we lose the plot to be the next China?

The problems began in
the complacency of the mid-2000s. That’s when India should have looked beyond
software and semiconductor design and doubled down on shoes, shirts and toys —
manufacturing that took advantage of the less-skilled workforce. Rather than
turning special economic zones into a land grab, India should have created a
few large enclaves. Demonetization and the flawed GST made things worse, and
Modi’s campaign of self-reliance may do yet more harm.

Why’s the public not
angered by it all? In the dirt-poor, northern state of Bihar, almost as
populous as Japan, Modi’s Covid lockdown forced migrant workers to return,
fearful and jobless. Yet while interviewing voters before elections for the
state legislature, Bloomberg News reporters found no dent in Modi’s appeal.
People’s ire was reserved for his coalition partner, the state chief minister.
And even he managed to retain power thanks to the prime minister’s boundless
popularity.

When Manmohan Singh’s
government was in office, it was preoccupied with people’s rights to education,
food, work and information. Modi, on the other hand, identified touchpoints in
everyday lives — a bank account opened with a unique identification, cooking
gas to replace a coal- or wood-burning stove, a toilet in the village home —
and delivered, up to a point. Whether there’s money in the account, running
water in the toilet or the means to replace the empty gas cylinder isn’t
something for which people blame him. Not when he has a bigger civilizational
agenda, like building a temple for Ram, the Hindu God, in the same place where
a mosque once stood until it was razed by Hindu mobs in 1992. As a 22-year-old
student, I didn’t fully realize what its razing meant. We were still giddy
about the Berlin Wall coming down. The next generation of Indians, I’m afraid,
will have to pay a price for that injustice.

The better-governed,
faster-growing southern states of India have mostly shunned Modi’s strongman
cult, but they’re bit players. It’s the poor, over-populous northern states
that matter disproportionately in Indian politics, and it is there that Modi
has managed to shift the Overton window, supplanting material prosperity —
which no party has delivered since the ’90s — with chest-thumping nationalism
and an atavistic yearning for a pre-Islamic past.

It’s no coincidence
that Modi’s ascendancy in public life began after the 9/11 attacks in the U.S.,
and export of terror from across the border in Pakistan. In the last
parliamentary election following one such attack, Rahul Gandhi, the opposition
Congress Party leader, couldn’t even retain his family borough in Uttar
Pradesh, previously won by his mother, father and uncle. And that was after he
promised the equivalent of $1,038 a year to each of the country’s 50 million
poorest families. The losers of development have turned skeptical even of
compensation.

Sadly, I don’t see
northern India’s economic pessimism — or its caste enmities, religious hatred
and deep-seated misogyny — making way for a less toxic, more aspirational
politics. I say sadly, because I have always been secretly hopeful about India,
even when criticizing its cumbersome red tape, crumbling infrastructure or
clumsy policymaking.

But the 1990s dream
has ended, the world has changed, and so have we.

Just typing that
previous sentence feels like betrayal. India is where I was born, grew up,
started work and got married.

I have left the
country for long stretches, and my teenage children don’t have any feel for its
culture, cuisine or languages. Yet India and I have never let go of each other.
When I write about other places, it’s as a foreign correspondent. The India
stories are different. They aren’t all strewn with the first-person pronoun,
but they’re all personal. Increasingly, they’re also bitter. Like this essay.

Call it buyers’
remorse. Those of us who thought that muscular leadership would revive India’s
dream of mimicking Chinese-style double-digit expansion are not just
disappointed. For many of my generation, our long-cherished hope for a better,
greater India is all but gone. We wanted to trade some of our democratic chaos
for a little bit more growth. We ended up with less of both.

(Updates
in 6th paragraph with India slipping into recession. Corrects the cost to India
of licenses in 30th paragraph and the number of high net worth individuals in
66th paragraph.)

Andy
Mukherjee is a Bloomberg Opinion columnist covering industrial companies
and financial services. He previously was a columnist for Reuters
Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg
News.

Originally published on Bloomberg