Schumpeter: A new business idol

INDIAN industry is in a funk and has decided that one man is the answer. “We’re waiting for NaMo,” says a tycoon. It is only a slight exaggeration to say that almost everyone in a suit and with a pulse in the private sector wants Narendra Modi, the chief minister of Gujarat state, to become prime minister after elections due by May 2014. Private-equity types, blue-chip executives and the chiefs of India’s big conglomerates all think he can make the trains run on time. Some Western investors hope Mr Modi, the son of a tea-stall owner, will be India’s Margaret Thatcher, a populist reformer who forces through measures that put the economy on a higher growth path. Bankers in Mumbai reckon the stockmarket will jump by 20% if Mr Modi wins.Indian firms do not win elections. But some do influence them by illicitly funding political parties, often on a royal scale. And companies’ reaction to politics matters. The current coalition, led by the Congress party, has been a slow and reluctant reformer. This helps explain why private corporate investment has slipped from 14% of GDP in the year to March 2008 to 10% or less now. Partly as a result, the economy is misfiring, with…

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