The astute observer will also notice an arc in the Modi government’s reforms initiatives, which have all involved a progressive ratcheting up of steps to modernize the Indian economy and governance of the Indian state.

In that sense, then, the currency swap and what it entails is a logical follow-on from the “JAM trinity” (Jan-Dhan Yojana-Aadhaar-Mobile), which aims to link entitlement claims to a unique identification number, a bank account, and a mobile phone, and eliminate leaky and corruption-prone physical distributional channels. Such reforms are all of a piece. Expect more to come.

Misguided critics who failed to see the ghost of Thatcher or Reagan lurking over Modi’s shoulder and saw only Congress-style policies dressed up in new garb remained trapped in a dated left/right binary which falsely pitted Congress-style socialism against a putatively libertarian party of economic reform, something like the short-lived Swatantra Party. What they have failed to see is that Modi’s BJP is the party of modernization and empowerment, a credo which transcends conventional ideological dividing lines.

What, after all, is either left or right in making government function better and better serve its people? What is left or right in ensuring that all Indians, including the poorest, have bank accounts and that every business firm must be registered, pay taxes, and observe the law of the land? What is left or right in making sure that everyone, whether rich or poor, who owns a piece of land holds a legitimate title to it, allowing them to use it as collateral when they go to take out a loan?

Fixing the plumbing and ensuring that the foundation is secure may seem an unglamorous job, but it is a necessary first step before erecting new stories. Fail to do it properly and the whole structure may collapse.

This is true of the economics and of the politics, and crucially when the two are intertwined: in other words, the political economy of governance and development. Modi understands this; many of his critics don’t.

The biggest blunder may well be by the ill-informed critics, who assume that with the currency swap, the Modi government has committed a self-goal. It might turn out, instead, to be the golden goal that catapults Modi and the BJP to a thundering re-election victory in 2019.


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