Is it too late for India?

I have been writing, for many months now, about how middle class disenchantment with the government is growing.

The middle class does not have the numbers to be electorally significant, let alone crucial but it is the original Narendra Modi constituency.

 

Even when the government did not deliver on the promises it made to the middle class, this constituency held firm through two terms.

 

   That, I believe, may now be changing.

 

   And, over the last weeks, I have sensed something that goes deeper, far beyond the anger over inflation and high taxation. There is a real concern that the government is not delivering on the global promise of India itself.

 

   When the BJP came to power a decade ago, the general view among educated Indians was that India was a country whose time had come. This was going to be the Indian century. We were ready to take our place among the great powers of the world.

 

   Not only would we become a global superpower, but we would also become an economic powerhouse. The world would rush to invest in India. Foreigners would do anything for access to the growing Indian market. The rupee would win back the ground it had lost during UPA II and rise in value. Even if everyone was not as optimistic as Sri Sri Ravi Shankar who believed that the rupee would reach Rs.40 to the dollar (it was at Rs 59 at the time) we expected some stability and an end to the slide in value.

 

   Ravi Shankar calls himself a Double Sri. But, unlike the great man himself, the rupee has not doubled in value. Instead it has actually halved from his predicted Rs 40 to the dollar to a figure of Rs 86-87 these days.

 

   There were expectations that the Indian passport would be more respected. Western countries would welcome Indian visitors with smiles. They would be greeted with warmth by immigration officers. America would regard India as its full and equal partner in the new world order. And so on.

 

   Almost every single one of these hopes has been dashed. It isn’t just the rupee that has plummeted. Even the Indian passport is – according to international ratings – less powerful than it used to be. Western countries don’t welcome Indian visitors as much as they used to a decade ago. It is actually more difficult to get visas to Schengen countries or to the US than it was in 2004.

 

   As for the US treating us as equal partners, the faith which so many Modi supporters had reposed in Donald Trump now seems misplaced. In the early days of the Modi regime, BJP leaders would celebrate Trump‘s birthday and cut cakes. Now India seems to hold no special place in Trump‘s heart. Earlier this week he complained about Indian tariffs and his administration has warned of retaliatory duties against India. Nor will our government’s domestic popularity go up as plane load after plane load of deported Indian citizens from America lands at our airports.

 

   It’s the same with investors. Foreign investment in India is still positive but not at the levels we had expected. The clearest indication of this is the flight of foreign money from the Indian stock market which has led to a bloodbath in share prices. With America poised for an economic boom even as our economy slows down, it will be harder and harder to tempt foreign investors to come back. (So far, foreign investors have withdrawn $7.4 billion from our market in January 2025 alone.)

 

"There are some signs that the government will act to reassure the middle class. But there are always those who say that it doesn’t care. Hindutva is enough to keep the BJP in office."

   But the sharper shock has been the diminishing global position of India compared to China. Despite the best efforts of our government in its early months to reach out to China, not only have the Chinese spurned our offers of friendship, but their army has also marched into India’s territory and will not give it up. After talking tough for years, our government has finally accepted China’s strengthened position and is now hurriedly trying to “normalise” relations. Even if that works it will take time for India to recover its old position as a rival to China.

 

   It got worse for us last week when China’s Deep Seek shook up the world with its advances in Artificial Intelligence. There was a time we dreamt of being world leaders in technology. Now the Chinese are so far ahead that they don’t even regard us as competition. It’s between them and the US.

 

   For the middle class these disappointments come on top of the anger over income tax. It is shocking that only 2% of Indians pay income tax and that they pay far more tax than all of India’s profitable companies put together.

 

   There are some signs that the government will act to reassure the middle class. But there are always those who say that it doesn’t care. Hindutva is enough to keep the BJP in office.

 

   And indeed, you could argue that the great spectacles like the Kumbh Mela will distract Indians. But surely, at some stage, people will cease to be distracted and will notice such setbacks as the end of India’s IT dominance. The era of our IIT-trained engineers who took on the world is being eclipsed. And often, it seems like we have lost the plot.

 

   The big news from the IITs is not about some advance in Artificial Intelligence. It’s about the director of IIT Madras who is busy trumpeting the virtues of cow urine. Forget about Artificial Intelligence. It’s hard enough to find any kind of intelligence at all these days.

 

   I am not convinced that Hindus are so communalised that Muslim bashing is enough to keep them happy forever. If that was so, the BJP would’ve come to power a long time ago and it would never lose an election in a country where Hindus constitute the overwhelming majority.

 

   When Narendra Modi won his first landslide it was for a Trump-like value proposition: “You let us do what we want in the social area and watch as we make our fat cat friends even richer. In return we will give you a corruption-free, well-governed, prosperous India that will be the envy of the world.”

 

   That promise now lies in tatters and when the BJP does win elections, it is not because of any promise of imminent Indian greatness but because it has created caste coalitions and diverted billions of rupees of public money to poor voters as part of its welfare agenda.

 

   The problem is that the middle class pays for this welfare agenda. Because the government has been unable to tax the millions of Indians who earn vast fortunes but operate outside the tax net, it has resorted to squeezing middle class taxpayers even more. Many of these tax measures have brought the economy to the state it is in today. At least some of the carnage in the stock market could’ve been avoided if the finance minister had paid heed to the outcry that greeted the new capital gains tax rules in the last budget.

 

   Can things get better? Well, in the short run, we will get some announcements, stunts and photo opportunities. The prime minister will visit Washington next month as Trump has asked and the visit will be treated as a triumph by the Indian media. One or two big foreign investments in India will be announced. The budget will try to revive the Stock Market and offer tax concessions to the middle class.

 

   But will that be enough? Can we emerge as a real alternative to China and as a significant world power in the years ahead?

 

   Possibly. But if we remain a country that neglects technology in favour of the virtues of gaumutra, that targets its own citizens, that continues to mismanage the economy and that believes that welfare measures are all that it takes to remain in power, then it will be too late for India. We will find it difficult to occupy the place in the world order that India rightfully deserves as the largest democracy on earth.