Vikram Singh Mehta
Vikram Singh Mehta, Executive Chairman of Brookings India, offers a fascinating insight into India’s dramatic general election and gives us his thoughts on what it means for business and investors
Vikram Singh Mehta
It’s a big question. A complicated question. And a question of vital importance for anyone in the business community who is considering investing in India.
Does the BJP’s historic landslide in India’s general election signify nothing short of a seismic shift for the world’s biggest democracy?
Or will anything really change? Despite the rhetoric of Narendra Modi, the new prime minister, is India just heading for more of the same?
“Neither,” said Vikram Singh Mehta, Executive Chairman of Brookings India, throwing something of a curve ball to his Asia Scotland Institute audience in Edinburgh. “And the reason is, I think, pretty clear. India is not a country that allows for seismic change. It’s not a country that allows for a radical shift.”
Vikram described India as a nation still divided along religious, linguistic, caste, class and gender lines; a country that has struggled to find a “unifying narrative”.
The BJP may have won an absolute majority for the first time, he said – but the party and its allies still polled just 38 percent of the vote. And while Mr Modi’s party secured 282 of the 543 seats in India’s parliament, the vast majority of these were in the north of the country, with regional parties continuing to do well elsewhere.
But that is not to say India’s election was not extraordinary, nor that the country is heading for more of the same. The Congress, India’s other main party, won just 44 seats – its lowest total ever. And that, Vikram believes, tells us something striking about how India is changing.
Looking to a better future
“India is today in the middle of a conflict between society and state,” he said, speaking at the University of Edinburgh Business School. “Society today, as represented by the 450 million people below the age of 25, is a vibrant society.
“It’s a dynamic society. It’s an entrepreneurial society… It’s a society that’s looking forward to a better future, rather than a better mosque or a better temple. It’s a society that is impatient with the past.”
Unlike his opponents in the Congress, Mr Modi understood that and tapped into it. Throughout his election campaign he spoke of economic development, not caste or class or religion. “Today the BJP has won a majority because the people are looking to the future,” he added. “That’s a very significant shift.”
Of course India remains a country with huge problems: the economy is in a dire state; 300 million people live below the poverty line; one in five don’t have access to clean water. No political leader could fix these things overnight.
But Vikram said he was cautiously optimistic that change is coming, albeit incremental change rather than seismic.
And he said he believes Mr Modi can at least start to meet the expectations of the aspirational and entrepreneurial young people who voted for him, many of whom live in India’s rapidly expanding cities where traditional affiliations are breaking down. He gave these reasons why:
- India remains a large and growing market
- The fundamentals of the Indian economy are still intact
- India has a huge reservoir of technical talent
- The country’s current economic problems are the result of bad economic decisions by the previous government – and bad economic decisions can be reversed
- Coalition government seems to be a thing of the past and for the first time India’s main states are being led by one party with a strong leader
- Mr Modi has already shown his willingness to fix India’s vast and ineffective bureaucracy
- Mr Modi recognises the importance of foreign investment to urgently upgrade India’s roads, ports and railways
“So there is reason for optimism,” Vikram said. “There is reason to believe the next step will be a positive step. There is reason to believe that it will not be more of the same…”
“I like to believe I am an objective observer,” he concluded. “I recognise that for every fact that I present to you, every assertion I make to you about India, there is going to be a very legitimate, logical counter-assertion.
“That’s a truism. There is no one truth in India. But for whatever it’s worth, I think if I had money today, if I was an investor with surplus money, I would be seriously looking at bringing money into the country now. I think you’re going to see a massive change.”
View Vikram Singh Mehta’s entire presentation to Asia Scotland Institute below, or watch our Chairman Roddy Gow conducting a short interview with Vikram here.
Scottish Enterprise is recruiting companies for a trade mission to India in October. Find out more here.
Our thanks go once again to the University of Edinburgh Business School for kindly hosting this event.