By: John Elliott

What kind of India is the Modi government making with repression in Delhi during an investment campaign in Mumbai?

Sometimes it seems as if Narendra Modi’s government just doesn’t want to succeed with its economic policies – or at least that it gives a higher priority to pushing repressive social actions favored by its arch-Hindu nationalists and their often-violent supporters than it does to achieving business reforms and attracting foreign investment.

Dramatically conflicting events in the national capital of Delhi and the commercial capital of Mumbai over the past few days have illustrated this point. They also raise the question of whether Modi is in charge, or whether forces and rival factions within his Bharatiya Janata Party (BJP) government, plus some bureaucrats and other officials, are undermining what he is trying to do.

The alternative view is that he approves of the ultra-nationalist approach, even though it might undermine his ambitions for the economy, especially at a time when state assembly elections are once again looming in the coming months.

In Mumbai, Modi opened a massive Make in India promotional week on Feb.13 aimed at attracting foreign investors into job-creating manufacturing industry with a vision of India as an open and liberalizing economy. Visitors have included the prime ministers of Sweden, Finland and Poland, together with top international industrialists.

Meanwhile in Delhi, the city’s police and Rajnath Singh, the home minister, triggered escalating violent and repressive clashes with students and the media that have continued till today over an issue which need never have become important outside the gates of the leftward-leaning Jawaharlal Nehru University (JNU), one of the country’s leading educational institutions.

The clashes have dominated the newspapers and television, almost eclipsing the Make in India events – apart from a few hours on February 14 when a massive fire at a prestigious cultural evening blazed for a few hours across TV screens.

Foreign visitors to Mumbai might regard the students’ problem and subsequent violence as something that happens in most countries from time to time and therefore not significant to any investment plans. But if they have inquired further, they will have discovered a government that has repressive overtones and that restricts freedom of expression more oppressively than past governments have done, while allowing its extreme wings to create social unrest.


Home minister Rajnath Singh

The handling of the clashes is also souring the political climate and is giving the Gandhi family-led Congress Party fresh excuses to obstruct parliament’s Budget Session that begins next week. This will not block finance minister Arun Jaitley’s budget speech due on Feb.29, but it could upset new measures including a fresh attempts to pass urgently needed sales tax legislation.

Meanwhile, in the world of business, Modi’s Make in India message has also been undermined by finance ministry bureaucrats who have warned Vodafone, the British mobile phone company which is one of India’s biggest foreign investors, that the company’s assets might be seized if it failed to pay the equivalent of US$2.1 billion in disputed taxes. This case is in arbitration, so there should be no threats, and Modi said in Mumbai that such tax demands were a thing of the past.

As Vodafone put it yesterday, “In a week when Prime Minister Modi is promoting a tax-friendly environment for foreign investors, this seems a complete disconnect between the government and the tax department.”

So who is setting the agendas? Was Rajnath Singh, who has sometimes been sidelined by Modi, not aware that that the escalating students’ row, and behavior of the Delhi police who come under his charge, were undermining the prime minister’s investment pitch – and did the prime minister mind?

On a different level, the Vodafone warning raises a question about Jaitley’s control of his ministry’s bureaucrats because he was in Mumbai for the manufacturing promotion and would presumably not have wanted to see it undermined – he is also Modi’s chief spokesman and the minister for information.

The students’ crisis began on February 12 when Kanhaiya Kumar, president of the JNU student union, was arrested and other students were suspended after an annual protest against the 2013 hanging of a convicted Kashmiri terrorist. Rajnath Singh condemned the students for “anti-national” activities and called for tough police action.