Time to Ban the Bans

Foreign investors are not rushing to invest in India. Monthly foreign direct investment equity inflows to India have fallen by half in recent months, from $4.4 billion to $2 billion. Modi has promised economic structural reforms but a culture war over religious differences could also contribute to investor reluctance: “arbitrary rule changes and whimsical bans now dominate the news and send the wrong message to foreign investors,” writes Nayan Chanda, consulting editor for YaleGlobal Online, in his column for Businessworld. Examples include the attempt to impose a retroactive tax on foreign companies as well as a various bans on meat and a move to block pornography, defined broadly, on the web. Twitter users quipped by applying the hashtag #banistan to India. Chanda concludes, “Modern India demands tolerance, openness and regulatory stability, not comically half-baked restrictions targeting minority communities.” – YaleGlobal    

Time to Ban the Bans

A culture war in India, including bans intended to divide religious groups, violates the modern image Modi tries to hard-sell all over the world
Nayan Chanda
Wednesday, October 7, 2015

Despite the Modi government's international investment road-shows and warm invitations to ‘Make in India’, foreign investors continue to shy away. According to the latest figures from the ministry of commerce, monthly FDI equity inflow has fallen from $4.4 billion in January to $2 billion in June. Not really a stampede of investors to a reforming India promised by Modi. Analysts can point to plenty of structural economic issues — from the global financial situation to domestic infrastructural and tax problems — to explain the reluctance of foreign and domestic investors. However, it is also likely that the heightened sense of an ongoing culture war since the BJP’s stunning 2014 electoral victory could be an additional factor giving foreign investors pause.  


The accusations against Muslims of conducting so-called ‘love jihad’ and the campaign to convert Muslims and Christians to Hinduism — the so-called ghar wapsi (return home), and provocative call by BJP leaders for Muslims to go to Pakistan have not created an atmosphere that is conducive to social stability. The reinvigorated nationwide campaign to ban beef has already strained relations with Bangladesh (which imported most of its beef from India) and has seriously hurt the country’s leather industry, which has seen exports drop by 13 per cent compared to last year.   


The economic costs of the culture war might be insignificant in the broader scheme of things, but arbitrary rule changes and whimsical bans now dominate the news and send the wrong message to foreign investors. The first of two glaring examples of the arbitrariness was the retroactive tax on foreign companies, which led to howls of protest from investors about ‘tax terrorism’. The government retreated and put the issue before a committee for review. The second was the botched plan to block porn sites on the Internet. The foolhardy short-lived attempt at defying the Constitution by blocking alleged porn underscored the erratic policy-making style of the government.  


The latest round of the culture war, banning meat, especially beef, aimed essentially at hurting the mainly Muslim communities that work in slaughterhouses and are also traditionally major consumers of meat, has taken the whimsical abuse of state power to a new level. Different BJP-run state governments banned the sale of meat for varying numbers of days during the period of a Jain fast. The argument was that Jains are offended by the sight of animals being slaughtered, and meat sale bans would help avoid offending their sensibilities. Different BJP-ruled states came up with different decisions. For instance, the ban in Mumbai covered the slaughter of buffaloes, goats and hogs, but excluded fish and poultry. The Maharashtra government permitted consumption of fish on the specious grounds that “it is already dead when it is taken out of water.” The argument implies that a life is not taken, and therefore this is acceptable to Jains, who might otherwise suffer emotional damage by witnessing animal slaughter during their holy period.   


Amused and irritated Twitter users came up with a new hashtag: #banistan. The proliferation of religion-inspired bans, and the arbitrariness with which they are implemented, are creating an image of India akin to the authoritarian theocracies of West Asia. This is clearly not an image that aligns with the Modi government’s slickly-packaged appeal to multinational CEOs to join the ‘Make in India’ campaign.   


Modern India demands tolerance, openness and regulatory stability, not comically half-baked restrictions targeting minority communities.   

The author is consulting editor of YaleGlobal Online, published by the MacMillan Center, Yale University.

Copyright © 2015

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