Excerpt from Boom Country?

Narendra Modi is the first Indian politician I have heard making the case for fundamental economic reform in India in simple words that make sense to ordinary people. The first time I heard him speak live in public was in April 2012, when he was still the chief minister of Gujarat, at the inauguration of the Charanka Solar Park in the arid land abutting the Rann of Kutch.

Typical of Modi's ambition, Charanka was the largest such facility in the world with millions of glinting, blue solar panels, soon to be 500MW in capacity, on 5,000 acres of former wasteland. After arriving by helicopter at the Solar Park's new helipad, Modi gave a barnstorming speech in Gujarati and Hindi to a crowd of local residents and farmers who had come for the free lunch in a huge air-conditioned tent put up for the occasion.

Modi explained in blunt colloquial terms to the dhoti and Gandhi-cap wearing crowd how economic progress, symbolized by the ranks of solar panels outside, would support jobs and a better life for their children. Some days earlier, the private-sector developers with operating solar assets in Charanka had been summoned to the Chief Minister's residence in Gandhinagar to be told that we should contribute towards the cost of the launch event.

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When it came to my turn, the only foreigner around the table, I regretted that as a PE-investment company we could not make a monetary contribution to an event that might be construed as political. Instead, I offered to invite and host a group of foreign journalists to cover the launch. Modi paused momentarily, then switched to English to agree.

Here was a man capable of understanding business, I thought. Modi built his reputation as a strong and effective administrator in 13 years, starting from 2001, as the chief minister of Gujarat. The terrible anti-Muslim riots of 2002 in Gujarat tarnished his image for many in India and overseas. However, his effective rule in Gujarat dissipated the negativity as the years passed.

The Hindutva70 social agenda of the Bharatiya janata Party (BjP) and its parent organization, the RSS, of which Modi had been an activist from childhood, was not overt and clearly took second place to good government and economic progress. In january 2007, Ratan Tata attended the huge Vibrant Gujarat convention and embraced Modi on stage, declaring that you would be stupid not to do business in Gujarat.

Based on his track record as chief minister, Modi's campaign in the general election of 2014 was fluent, effective, high-tech and caught the mood of the country. He promised change after years of an ineffective Congress government; he promised development and jobs. I was surprised during the later months of 2013 and into 2014 by the number of encounters I had in all parts of the country with people who, not traditional BJP voters, said they would vote for Modi: an IT worker in Bangalore, a hotel receptionist in Darjeeling, a driver in Calcutta.

He was swept to power and an unexpected Parliamentary majority on a wave of optimism. Most Indians, especially those in business, have learnt to take a cynical view of the effectiveness of government. The well-meaning socialism of Nehru became increasingly anti-business through the 1950s and '60s. As has been discussed earlier, the noose tightened further on business after Indira Gandhi moved more towards a socialist model with the objective to eradicate poverty ('Garibi Hatao') but instead tightened the regulatory stranglehold on the economy, nationalizing many sectors and squeezing out foreign companies.

The result was throttling red tape, widespread corruption, and multiple and high taxes. The unwinding of some of these constrictions in the reforms made from 1991 onwards, under another Congress government led by P.V. Narasimha Rao, spurred economic activity and gave new opportunities to entrepreneurs in newly liberalized sectors. Nevertheless, the government sought to balance growth in a new, confident India by talking of 'inclusive growth' which maintained a wider social agenda. The perception that poor policy and governance was at the root of India's ills persisted, and was only reinforced by the ineffectiveness and scandals that came to characterise Manmohan Singh's second term in office from 2009.

Few, at least in business, saw government as a positive force for change. In presenting India to foreigners, I have often contrasted India, with a competitive private sector held back by an ineffective and seemingly unhelpful government, with China, where the government is typically proactive and ambitious, and a true private sector is only now developing more fully.

While that characterization has a strong factual basis, in reality India's private sector, and now its explosion of new entrepreneurship, could not have developed without government policy. India has preserved many of the aspects of a market economy from colonial days, most importantly the rule of law. The excellent elite colleges, most notably the IITs and IIMs, are government institutions. I termed the first cohort of entrepreneurs I interviewed as "Manmohan's Children" because much of their success was enabled by the reforms of 1991, not least by opening many sectors of the economy to the private sector. The growing pace of entrepreneurship in India pre-dated Narendra Modi and resulted from years of incremental government policy change.

Modi's arrival in government has resulted in new policy initiatives, including those encouraging entrepreneurship and resurgent business optimism. Modi changed the tone of India's central government after he swept into power in May 2014. He espoused a vision of the future that was confident and positive. He promised strong, clean and effective rule. He was avowedly pro-business. His pro-development agenda was noticeably different from the narrative of inclusive growth that preceded it. His policy priorities included investment in better infrastructure and passing the unified national GST to reduce complex and accretive state-level tax systems. His drive to improve the ease of doing business in the country was well judged, his focus on manufacturing welcome.

Modi's language, positivism and apparent effectiveness altered the perception of India internationally. His 'gigs' overseas, in Wembley Stadium and Madison Square Gardens, were masterful in the way they enthused NRIs about the potential of the 'new India'. Modi's next step was to issue a clarion call for new start-ups to play a major role in creating growth and employment. In his Independence Day speech from the ramparts of the Red Fort in Delhi on 15 August 2015, Modi promised an entrepreneurial India in which new jobs would be created by new businesses. He called on India to 'start-up' and 'stand up'. The question was whether he could fulfil all of these promises.

(See interviews: Riding the entrepreneurial wave)