21.05.2026

Young militant carries flag of Communist Party of India (Marxist)

Further swing to right

Narendra Modi’s far-right BJP has made further gains at state elections and has almost totally marginalised the left. Given the country’s extremes of wealth and poverty this might seem paradoxical. Michael Roberts investigates the politics and economics of the world’s most populous country

In the recent state elections in India, the coalition government led by the far-right Bharatiya Janata Party won resounding victories in some key states previously held by opposition parties. In the highly populated West Bengal, Mamata Banerjee, India’s most powerful female politician, who had been in power for 15 years, saw her Trinamool Congress Party trounced by the BJP (she has refused to accept the result). And in the small southern state of Kerala, the pro-business Congress Party ousted the ruling leftwing alliance in a landslide victory, the BJP also gaining a foothold in the state for the first time ever. The BJP now controls 21 of the 28 states in India.

In the 2024 general election prime minister Narendra Modi, the leader of the BJP, retained power. The Hindu nationalist BJP was formed by members of what was basically a religious-fascist party, the Rashtriya Swayamsevak Sangh, an organisation modelled on Mussolini’s Black Brigades. Modi was a long-time member of the RSS, who then moved seamlessly into the BJP.

After winning power in 2014, Modi has increasingly cemented his control of government. The nationalist BJP is now seen as ‘business-friendly’, but it is still dedicated to turning a multi-ethnic and multi-religious India into a Hindu state, where minorities, particularly Muslims, would be reduced to second-class citizens. With increasing confidence, the Modi government has suppressed any public dissent by liberal democrats and socialists against this trend. Many opposition politicians have been imprisoned for lengthy periods on trumped-up charges and prevented from participating in elections and in public debate.

Support

So how is it possible for the BJP and Modi to be so popular? First, because the bulk of the BJP’s political support comes from the rural and more backward areas of this huge country, which have not benefited from the strident rise of Indian capitalism in the cities. These areas are bulwarks of Hindu nationalism, incentivised by fear of Muslims.

The second reason is the total failure over decades of the main capitalist party and standard bearer of Indian independence, the Congress Party, to deliver better living standards and conditions for the hundreds of millions - not only in the country, but in the city slums. Congress appears to millions as the party of the establishment, controlled by a family dynasty (the Gandhis), while the BJP appears to many as the populist party of the ‘forgotten people’.

Now even the leftist government in a small state of Kerala in the south-west of India (predominantly Christian, not Hindu or Muslim) has fallen. Kerala is constantly promoted among the international left as a success story for public investment and support for the poor over the rich. The reality is less sanguine. The Left Democratic Front government appears to have lost touch with working people. Take these examples from one source.

For 266 days, workers in the public-health system that the LDF boasts about at international forums went on strike, demanding a wage of 21,000 rupees a month (they were only drawing 7,000 rupees). After 10 months of protest, the government raised it to 8,000 rupees. The leftist government claimed that the strike was just a Congress conspiracy.

Farmers in the rubber belt have complained that they cannot survive and their children are being forced to migrate to the Gulf and elsewhere. Youth unemployment has reached 30% (among young women, 47%) - nearly three times the national average. The government promised 200,000 jobs in five years, but they have not materialised.

Worse, corruption emerged. Around 27 million rupees ($279 million) was paid by a mining firm to the IT company owned by the chief minister’s daughter between 2017 and 2020 for no demonstrable services. In the election campaign, the leftist alliance dropped its secular approach and tried to woo Hindu nationalists. As one source put it, “Kerala in 1957 voted communist because the left spoke for the labourer, the tenant, the Dalit¹, the fisherman, the woman in the kitchen and the field. Kerala in 2026 - it began speaking only for itself.”

The ‘communist’ left and Congress have failed to offer a clear alternative to the BJP, which continues to boast of the unending success of the Indian economy since Modi came to power. The Indian media and western economists laud the strong economic growth that India is apparently enjoying under the Modi government.

So ecstatic are mainstream economists about the success of Indian capitalism under Modi that talk of his neo-fascist past and current repressive measures are ignored. Instead, all the talk is of India ‘catching up’ with China and even surpassing its real GDP soon. For example, Goldman Sachs contends that India could have the world’s second-largest economy by 2075.² Modi made the economy a major part of his election pitch, pledging to lift the country’s economy “to the top position in the world”. This is nonsense, as I have shown elsewhere.³ It is true that the world’s largest country by population has had very fast economic growth, averaging 5%-6% a year (in fact a little slower in the 2020s), although the official figures can be questioned.⁴

Official figures

Also, according to official figures, poverty in India has declined substantially in both rural and urban areas. Based on the official poverty line, rural poverty fell from 64.9% in 2011-12 to 19.3% in 2023-24, while urban poverty declined from 39.7% to 8.6%. A similar pattern is observed for ‘extreme poverty’, which declined from 30.7% to 3.1% in rural areas and from 17.4% to 1.4% in urban areas over the same period.

But these estimates are again to be questioned. Labour market data suggest a much higher inequality in earnings with the top 10% of Indian earners getting income 17 times higher than the bottom 10%. Indeed, India’s economic growth post-pandemic has been uneven - or ‘K-shaped’ (where the rich have thrived, while the poor continue to struggle). India may be the fifth largest global economy at an aggregate GDP level, but on an ‘income per person’ basis, it still languishes at 140th. Inequality has widened to a 100-year high, according to research from the World Inequality Database. The top 10% of the Indian population now holds 77% of the total national wealth and the rise in inequality has been particularly pronounced since the BJP came to power in 2014.⁵ By 2022-23, the top 1% income and wealth shares (22.6% and 40.1%) reached their highest historical levels and India’s top 1% income share is now among the very highest in the world.

In contrast, many ordinary Indians are not able to access the healthcare they need. Sixty three million of them are pushed into poverty because of healthcare costs every year - almost two people every second. Indeed, it would take 941 years for a minimum wage worker in rural India to earn what the top-paid executive at a leading Indian garment company earns in a year. While the country is a top destination for ‘medical tourism’, the poorest Indian states have infant mortality rates higher than those in sub-Saharan Africa. India accounts for 17% of global maternal deaths and 21% of deaths among children below five years.

Rural distress, stagnation and falling farming incomes have led to a number of protests by farmers. According to Samyukta Kisan Morcha, an umbrella of farmers’ unions, over 100,000 farmers have committed suicide in the last 10 years of Modi’s rule. India ranks 111th of the 125 nations in the Global Hunger Index (2023) report. It is home to over a third of the world’s malnourished children - which is not only a health crisis, but has a wider impact on the economy. A 2023 joint report by institutions including Unicef and the World Health Organisation found that 74% of the population cannot afford healthy food.

The key for Indian capitalism (as it is for all capitals) is the profitability of its business sector. That profitability took a huge plunge in the 1970s, as profitability did globally. Under successive Congress-led governments, neoliberal policies were adopted to drive up profitability. Then came the ‘great recession’ of 2008-09 and the ensuing ‘long depression’ of the 2010s, and profitability and growth began to fall back. Modi came to power as a result. Under him, Indian capital has sustained a relatively high rate of profit, enabling it to expand investment and the economy.

Investment to GDP reached 42% at the peak of the credit boom of 2007. However, after the great recession and long depression, investment to GDP fell back significantly, until the Modi regime steadied the ship for Indian capital after the Covid slump.

World Bank

The Modi government is being encouraged by international economic institutions to keep up the incentives to Indian capital. In its latest report, the World Bank said:

Boosting private sector-led growth will be critical to strengthening economic resilience and supporting more young people to enter the workforce, A predictable, business-enabling environment will help to unlock investment and create jobs at scale in priority sectors like energy and infrastructure, manufacturing, tourism, healthcare, and agribusiness.⁶

But India’s economic future is uncertain: “India is not immune to these global shifts. Intricately connected to global value chains, India faces external shocks and acute effects from these global policy changes, including tariff escalations and volatile capital flows.”⁷

India imports nearly 90% of its crude oil and 50% of its natural gas requirements. Conflicts in the Middle East, such as the disruption in the Strait of Hormuz, pose a severe risk to this energy supply, potentially creating high inflation and hindering economic activity. If oil prices stay elevated for an extended period, it could significantly impact India’s external balance and increase the government’s subsidy burden. Industrial activity in early 2026 has been a mixed bag, with manufacturing and mining showing resilience, while electricity generation acts as a drag.

So the Indian economy remains vulnerable to global economic crises, particularly due to high energy import dependence and geopolitical disruptions. External headwinds like Middle East conflicts and global supply chain disruptions threaten momentum.

And, of course, if there is a global economic slump, India will join it.

Michael Roberts blogs at thenextrecession.wordpress.com