Modi’s capitalist dystopia: How liberal market stokes new India’s illiberal democracy

Prime Minister Narendra Modi walks as South Korea President Moon Jae-in interacts with Adityanath, the chief minister of Uttar Pradesh, after cutting a ribbon during the inauguration of the world’s largest smartphone factory—an assembling plant that is an extension of an existing Samsung India facility—in Noida on 9 July 2018. MONEY SHARMA / AFP / Getty Images
02 November, 2020

A double act, staged barely a week apart, reveals the contradictory logic at the heart of politics in contemporary India. In early September, Ajay Singh Bisht, the chief minister of Uttar Pradesh, decided to change the name of an under-construction museum from the Mughal Museum to the Chhatrapati Shivaji Maharaj Museum. “How can our heroes be Mughals?” Bisht—popularly known as Adityanath—asked, bolstering his action-oriented Hindu hardliner image. The word “Mughal” has become a shorthand for the Muslims-are-outsiders discourse that invokes a far-away past to settle political scores in the present. 

A week later, the chief minister took on a dramatically different garb—that of a business-friendly globalist. The occasion was a high-level empowered committee meeting of Invest UP, a state government agency working to streamline its investment approval and other related procedures. There, Adityanath announced an optimistic goal of making Uttar Pradesh a trillion-dollar economy, inviting Indian and global investors to set up business in the state. He put forth the idea to turn the state into a prime investment destination, which would be open to modern initiatives typical of the 21st century, such as solar power and biofuel enterprises. 

This politics of forked tongue can be confounding. How is one to read a leader who claims to espouse a “liberal” forward-looking vision of market freedom and simultaneously exhibits an “illiberal” cultural politics that relentlessly fixates on the past? What capricious logic enables the swift transformation of a Hindutva authoritarian to an aspiring manager of global capital? 

These seemingly contradictory positions have become a package deal in Indian politics under the reign of Prime Minister Narendra Modi. This political-economic package belies the popular belief that liberal politics cohabits with liberal markets or that capital boosts democracy to shape a world of unrestricted freedoms. Instead, capital appears to be leveraged to establish a heavy-handed majoritarian rule that can restrict freedoms. The lure of markets can be deployed as a bargaining chip to preempt any potential condemnation from the rich and the powerful. This transaction was evident when Jammu and Kashmir’s special status was abrogated last year: investors were expected to overlook internal repression for the tantalising prospect of gaining access to new markets.  

While the Congress had originally scripted the liberalisation programme in the 1990s, it was Modi who capitalised on this scheme to entrench Hindutva hyper-nationalism at the centre stage of Indian politics. As a chief minister, before 2014, he leveraged the capitalist promise of economic growth to boost the “Gujarat model”—a neoliberal playbook of “Vibrant Gujarat,” Modi’s flagship biennial international investors’ summit, combined with his strongman populism. This blueprint, which was dubbed as acche din, or good times—the open-ended promise of economic growth and the restoration of a Hindu civilisational past—is what brought him electoral success in 2014. With Adityanath taking a similar path, this neoliberal script of economic growth has not just been disentangled from secular democratic politics, but firmly harnessed to the project of Hindu nationalism. 

The key to this messy politics is the formula of pitching a nation as an investment destination—a formula that I dissect in detail in my book, Brand New Nation. In the past three decades, India has largely internalised the idea that to aspire to be an attractive investment destination is to fully capitalise the nation into an income-generating asset. This entails re-imagining the national territory as an infrastructure-ready enclosure for capital investment, its cultural identity distilled into a competitive global brand and its inhabitants as income-generating human capital that can be deployed to generate more capitalist growth. The regions within the nation-state are imagined as sub-containers of capital—from Sunrise Andhra Pradesh to Bengal Means Business—that compete with each other to draw capital investments. Thus, the arena of economy increasingly appears as a competitive theatre where market-ready nations dressed up as exclusive brands vie to secure capital investments. 

What drives this competition to become the veritable factory of the world is more than the aim of economic prosperity and development. It is also a chance to acquire a strong economic muscle that in turn can bring legitimacy to the political establishment. Consider, for example, how global capital inflows or the increase in foreign exchange reserves are projected as a form of global recognition of Modi government, often as a testament of his strong personal leadership. An inflow of capital investments also redraws political power dynamics such that the management of the nation’s domestic affairs remain a no-go territory for external actors. The bargain is this: the state controls the territory and puts it at the disposal of investors, and in turn, the investors legitimise the sovereign power of the state. This narrative of economic development and the attendant political dynamic was evident when the BJP government revoked Jammu and Kashmir’s special autonomous status on 5 August 2019. 

In the face of severe backlash and accusations of repression, the BJP government chose to argue that the move would not only root out terrorism and nepotism, but also pave the way for development in the Valley. It held out the change in Kashmir’s constitutional status as an opportunity to realise its economic potential. An official announcement of an “Investor Summit” to be hosted in the erstwhile state featured on several news portals around the same time. The potential investors were invited to come and see first-hand “the business friendly policies of the government, assess infrastructure, natural resources, raw material, and skilled and unskilled manpower, and identify business opportunities in the state.”

If the abrogation of Article 370 stoked a hyper-nationalist Hindutva base that now euphorically fantasised about buying property and marrying Kashmiri women, the Investor Summit spoke the staid bureaucratic language of economic potential and development. Taken together, the two announcements put on display a strong muscular state that meant business in more ways than one: the region was being “opened up” for business, in the parlance of policy experts, just as it was being “shutdown” in a curfew and Internet blackout. India Inc, which tends to root for strong men of action, had enthusiastically welcomed the political action and parroted the government’s narrative of development in Kashmir.

The abrogation was among the many events of the first year of Modi’s second term that showed the cultural and economic entanglements that are still rearranging India’s liberal political landscape. Held aloft by the dreams of a $5 trillion economy, the term has so far been marked by the implementation of key agendas with high symbolic value to Hindu nationalism. These range from enacting the controversial Citizenship (Amendment) Act, 2019, a crackdown on student protests, to the temple construction at Ayodhya most recently.

The ongoing global debates about the crisis of liberalism—erosion of liberal values, freedoms and institutions—fall short in explaining the emergence of illiberal politics in many parts of the world. The rise of populist authoritarianism is often seen as a politics of resentment in the post-communist world or the left-behind regions in Euro-America as capital moved to the emerging markets. What these views fail to consider is that it is hardly a coincidence the phenomenon of illiberal democracies or illiberal majoritarianism is especially prominent in nation-states that also position themselves as attractive investment destinations for global capital.  

The arrival of COVID-19 has strengthened this trend. At first, this unlikely alignment may seem to have been rendered ineffective—the pandemic has worsened the economic opportunities of a variety of social groups in formal and informal sectors. Economic forecasts for India currently project a shrinking economy that will potentially corrode the country’s growth story. But, in surprising ways, the logic of the nation-as-investment-destination model continues to shape the pandemic geo-economics. As China is dislodged from its erstwhile position as the factory of the world, several nation-markets including India are making bids to become the next factories in the ongoing speculation. 

This intense, uncertain time also reveals the strange paradox of Modi’s new India. Erected upon a scaffolding of unfulfilled promises, it continues to open its territory to capital mobility even as it restricts freedoms of those deemed the internal other. Faced with the triple crises of a falling economy, an out-of-control pandemic and an aggressive China eating away at its borders, the nation seems more fragile than ever. Yet, what keeps it afloat is not actual economic gains or prosperity for its citizens, but the cruel promise of good times, a permanent state of hope without a deadline.  

रविंदर कौर स्टेनफर्ड से इस साल प्रकाशित किताब ब्रांड न्यू नेशन : कैपिटलिस्ट ड्रीम्स एंड नेशनलिस्ट डिजाइन्स इन ट्वेंटी फर्स्ट सेंचुरी इंडिया की लेखिका हैं.