Foreign brokerage CLSA’s Hong Kong-based equity strategist Christopher Wood believes there are many in India who would like to see Modi (61) as the prime minister, with Gujarat achieving an estimated average real annual gross domestic product (GDP) growth of 10 per cent over the past seven years.
Wood, however, said the consensus view is that Modi’s autocratic tendencies, combined with the perceived unlikelihood that the BJP could achieve an outright majority in the Parliament, makes the prospect of him becoming prime minister unlikely, if not impossible.
“Still unexpected things can happen in a crisis and Modi’s appeal to the electorate will certainly rise in such circumstances. And, it is certainly possible, if not perhaps probable, that the current rupee weakness, and the continuing lack of urgency being displayed by the Congress-led government towards India’s so-called “twin deficits” (current account and fiscal); could lead to such a crisis,” he said in his latest Greed & Fear weekly newsletter.
Wood said he has been hearing the hype about Gujarat for some time, but a brief visit to the state last month confirms the praise is warranted.
“It really seems to be the case that Chief Minister Narendra Modi does run the state like a chief executive officer. A domestically-elected autocrat in the Lee Kuan Yew mode, Modi has already been in power for more than 10 years and it is generally assumed that he will be elected in another landslide in the next state election, due to be held in December,” he said.
He added the businessmen report the investment approvals in Gujarat are remarkably swift, while the state government is viewed as both clean and highly efficient with the word “pro-active” most often applied to describe the functioning of the bureaucracy. “This marks such a contrast to most of the rest of the country, it is no wonder that Gujarat has become the poster child for economic development in India,” Wood said.
According to him, Gujarat’s economic dyn-amism has been based on a broader and more diversified range of sectors, be it traditional areas of strength like textiles, pharmaceuticals and ports or more recently autos, where the state has started to attract critical mass after Tata Motors set trend with its decision in late 2008 to move the production of the Nano from West Bengal to Sanand in Gujarat.