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India's Election - A New Skipper Enters The Pitch

On Friday, May 16, 2014, Hindu nationalist Narendra Modi won the India election for Prime Minister in a landslide victory for the Bharatiya Janata party (BJP). Modi has been swept into a vast, grand and complex political stadium that is India—the world’s largest democracy. Over 800 million voters—150 million of whom voted for the first time—exercised their rights and gave voice to their hopes and frustrations. The dynastic team Ghandi, having even lost the automatic right to name the leader of the opposition, has been bowled out— possibly forever—and Mr. Modi has been given a fresh batting wicket. What to expect?

The match will play out over the next five years, but the early strategy seems obvious.

  • The spirit of this match will reflect strong governance, and Modi’s fans will see early moves that cut the bureaucracy—eliminating slow play, creating faster decisions on the field and eradicating corruption. To do otherwise risks hearing catcalls from the side-lines.
  • We will also see strong fundamentals, energy and hustle focusing on fundamentals that will spur economic growth. This will include early moves that get the Modi team back to the basics of scoring easy runs by unlocking infrastructure gridlock and increasing FDI.
  • Team Modi could go for a six in the early going and undertake labor reforms—a possibility given fan support and its importance when combined with increased FDI.

Early play that reflect an understanding of fundamentals will strengthen economic inclusion—the big game strategy.

But who does Modi field on his team? It is too soon to tell who lines up for this big game, but the positions to watch are Finance Minister, External Minister, Home Minister and Defense Minister. The early names for Finance Minister are Arun Jaitley and Arun Shoutrie. While a hopeful early selection, Jaitly has fallen in the charts because of his loss in his bid for a seat in the lower house. Recently mentioned for this position is Arun Shoutrie, who has the wily experience of a veteran and the added benefit of no future Prime Ministerial ambitions—generating the hope that he will focus on the current match. Possible Defense Minister could be Rajinath Singh, who is being given credit along with Modi for getting his BJP team into the big match. It is possible that moving Singh—the BJP party leader and a power center unto himself—to this position will align two powerful players, Modi and Singh, on an important initiative. 

But the match will not be an easy one, and can Modi handle early googlies bowled at him? Two immediate potential challenges await him: The RSS, an element of the BJP/Modi bench, will want nationalist economics to be a strategy adopted in the early days of play, which, if done, will be problematic for future, sustainable growth. Also, Modi cannot call all the plays. India’s Central Government, which Modi captains, needs to work with 27/28 states in order to win this nation-wide match. Here, Modi may be a victim of his own success as the Chief Ministers of these 27/28 States look to go it alone at times in order to imitate the Gujarat success—as they aspire to be a team leader one day.

© 2020 Covington & Burling LLPNational Law Review, Volume IV, Number 140

TRENDING LEGAL ANALYSIS


About this Author

Ralph Voltmer, communications and media attorney, Covington
Partner

Ralph Voltmer, Jr., a partner in the firm's corporate group, advises both US and foreign clients in cross-border transactions such as mergers & acquisitions, joint ventures, strategic alliances and financings (whether debt or equity).  Mr. Voltmer has represented clients on a variety of transactions in Europe, Latin America, Asia, and heads the firm's India Practice.

202-662-5479
Simon Amies, Securities Attorney, Covington, London
Partner

Simon Amies is a partner in Covington's London corporate practice group.  He advises on a broad range of corporate matters including mergers and acquisitions (public and private), IPOs and other securities offerings, private equity and venture capital investments, joint ventures and strategic transactions, and corporate governance.

Mr. Amies advises companies at all stages of their development, as well as investors and banks.  He has particular expertise advising clients in the life sciences, technology and clean energy industries.

+442070672002