Modi: I want to motivate our industrialists to believe in the India story and the long-term potential of the Indian market.

Me (counter): Modi’s bureaucrats had used this red herring of India’s “long-term potential” to cover up their abject failure in buoying the economy through five years of his first term. And now that we have slipped into a deeper funk right at the beginning of his second term, they are again deploying this “oh things are bad right now, but don’t worry, we shall get it right in the long-term” trick. I am tempted to use Keynes’s celebrated “in the long term we are all dead”, but that would amount to using one cliché to kill another. The fact is that Modi should now be thinking “utterly short-term” to fix the pervasive economic gloom. Just as one example, when the auto industry is in danger of regressing to production levels seen four years ago, you know “it’s the short-term, stupid” that you need to be paranoid about, not some abstract dream in 2025.

Modi: India’s “historic” rise in the “ease of doing business”… “remarkable that a nation of over 1.25 billion has achieved a rise of 65 ranks in a short period of four years”.

Me (counter): Dear Prime Minister, I know you extended it to a more general “ease of living” today, but please do not begin to believe your own mythology. Most of us assume, quite innocently, that the World Bank’s EODB Index is the gold standard of economic performance. In reality, it’s an extremely narrow, even misleading, summation of a few rules which matter to a tiny, very tiny, sliver – less than five percent of India’s vast population: * EODB is derived from the subjective views of a few dozen experts in Mumbai and Delhi. That’s it! * Most of the improvement came from just four rules that were swiftly changed in a “Kota coaching class” approach to “gaming the system”: (a) Enforcing a single window clearance for building permits in Delhi and Mumbai (b) Allowing exporters to seal their containers electronically, reducing physical inspections to 5 percent of shipments c) Introducing a single form for company incorporation; and (d) Lowering the cost of getting electricity

Modi: With capacity utilisation crossing 75 percent, we would see growth in investment from (the) private sector in the coming months.

Me (counter): You know when we first heard this “75 percent explanation” for the unusually weak amount of private investment? In 2014. Then in 2015, 2016, 2017, 2018… and now in 2019. Once again, this is a bureaucratic fiddle to hide the true culprits, which are: The Modi regime’s unusual hostility towards equity capital, which is the lifeblood of spurring an entrepreneur’s animal spirits. They restored long-term capital gains tax, did not abolish securities transaction tax, began taxing dividends in investors’ hands, but did not abolish the dividend distribution tax – so the same equity investment is taxed four times! Add “angel or valuation mismatch taxes”, and you really don’t need to ask why private investment is flagging. The Modi regime’s unusual penchant for keeping real interest rates the highest they’ve ever been. When, for instance, did you last see, in any sane/mature economy, that the central bank cut rates by 35 basis points, but the 10-year treasury bond gained 35 basis points in the next few days!? It’s perverse, but it just happened in India last week; proving that Modi-nomics has bloated the government to such an extent that private investment is being crowded out.