November 02, 2015

Moody’s is right to warn that belligerent communal rhetoric could ruin India’s economic prospects (Edit in TOI)

The Times of India

Moody blues: Moody’s is right to warn that belligerent communal rhetoric could ruin India’s economic prospects
November 2, 2015, 12:08 am IST TOI Edit in TOI Editorials | Edit Page | TOI

Prime Minister Narendra Modi has gone all out to pitch India as a global business destination. But the research arm of international ratings agency Moody’s has injected a timely note of warning on domestic actions that might scupper this bid. In a report titled ‘India Outlook: Searching for Potential’, Moody’s Analytics has said unequivocally that unless Modi reins in BJP members making controversial statements, India runs the risk of losing domestic and global credibility.

President Pranab Mukherjee, addressing the Delhi high court on its golden jubilee, pitched yet again for pluralism and tolerance. And RBI governor Raghuram Rajan devoted a good part of his IIT Delhi convocation speech to explicating why tolerance is essential for India’s economic progress. While tolerance allows the best ideas to come forward and compete, in an intolerant regime the worst ideas can’t be questioned. In place of the false opposition between tolerance and nationalism that hyper-nationalists within BJP presume tolerance, as Rajan proposes, should be deemed a patriotic service.

As the Moody’s report points out, there are two interrelated ways that religious majoritarianism and the spreading culture of bans and intolerance can hold up economic progress. First, rising ethnic tensions will discourage investors who have a host of international destinations to choose from. Second, the political debate in the country will turn away from development to more divisive issues, creating stiffer opposition to the government in Parliament and holding up the passage of reform measures key to turning around a sagging economy – such as GST, relaxed labour laws and land acquisition norms. Modi needs to lay down the ‘sabka saath sabka vikas’ line more firmly within his own party and government by telling his hardline colleagues they can’t have the cake and eat it too: it’s either economic progress or the religious agenda.