It has become increasingly clear that the new Indian government faces a dilemma entirely of its own making, one that its predecessor never had to deal with.

The election of Narendra Modi as Prime Minister was initially hailed around the world as marking the advent of a more business-friendly government in the world’s largest democracy. Investors rushed to hail Modi as a new messiah of development, one whose sound-bites were noticeably pro-market: “We will replace red tape with a red carpet,” “the government has no business to be in business,” and “Make in India” were among his more popular slogans.

Modi’s BJP party enjoyed the first absolute majority in the lower House of Parliament of any Party in a quarter of a century, thus freeing it from the pressures and constraints of coalition governance. The Prime Minister’s forays abroad were invariably accompanied by talk of new business opportunities, new foreign investments and new joint ventures. He vowed to improve India’s ranking in the World Bank’s “Global Ease of Doing Business Report” from a dismal 125th position to “at least 50th” in the world.

The talk remains, but it seems increasingly removed from the central preoccupations of Modi’s ruling party. Modi has risen to power at the head of a family of ostensibly right-wing organizations that not only largely do not share his economic priorities, but are obsessed with what is known as “cultural nationalism,” which is really little more than Hindu majoritarian chauvinism of the most bigoted kind. The tensions between the two tendencies—the economic reformism preached at the top and the cultural nativism that animates the majority beneath—have begun to paralyze the Government. What makes it worse is that the political majority needed by the Prime Minister to pursue his economic policies relies entirely on the political campaigns and organizational capacity of the very people whose chauvinism is undermining him. It is a contradiction that emerges from the heart of the ruling party’s schizophrenic nature.

The ascension of Modi was followed almost immediately by a series of incidents affecting India’s minorities, particularly Muslims. They ranged from the tragic—the beating to death of a young Muslim techie in Pune in “retaliation” for a supposedly defamatory social media posting he had nothing to do with—to the ridiculous (the shoving of food down the unwilling throat of a Muslim cafeteria employee during the fasting month of Ramadan by a legislator from a BJP ally).

Then came a nationwide scare about “love jihad,” an alleged Muslim ploy to seduce Hindu girls into romantic entanglements that would lead to their conversion to Islam and make India a Muslim-majority country. No sooner had this BJP-fueled hysteria been widely dismissed (Muslims are currently 13% of the Indian population, and there have been only a handful of such marriages) than the inflammatory rhetoric mounted. A prominent Modi supporter declared that all Indians had to acknowledge that they were culturally Hindu; a member of the Council of Ministers divided the country into “Ramzada”s (believers in the Hindu god Ram) and “Haramzada”s (bastards), and remained in her post under Modi’s benign gaze. Another ruling party legislator declared Mahatma Gandhi’s Hindu-chauvinist assassin to be a patriot, while a fringe party in the Modi camp announced a campaign to install the assassin’s busts throughout the country.

The galloping nativism knew no bounds. The Education Minister abruptly decided mid-term to withdraw German as an optional third language in government schools and replace it with Sanskrit. The Prime Minister himself embarrassed many by declaring in a speech at a new hospital, no less, that the figure of the Hindu god Ganesh, with his elephant head on a human body, testified to the ancient Hindus’ knowledge of plastic surgery! Meanwhile the RSS, a volunteer organization modelled on the Fascist groups of the 1920s (complete with khaki shorts and staves), declared a campaign of “Ghar wapasi” (“return home”), or reconversion of minorities back to the Hinduism from which their ancestors had allegedly lapsed in the distant past.

The resultant controversies have not merely convulsed the nation and dominated political discourse, they have sidelined Modi’s economic policies altogether. Protests by Opposition parties against these extremely provocative statements and measures have paralyzed the Houses of Parliament, making it impossible for the government to introduce, let alone pass, important elements of pending economic reform legislation, such as a law raising foreign investment in the insurance sector to 49%.

But Modi, who needs the foot soldiers of these organizations for the election campaigns that sustain his majorities in Delhi and in an increasing number of states, has said nothing to silence his supporters or mollify his critics.

The problem is that the dominant strand in the ruling party cares much more about asserting Hindu chauvinism than it does about the economic reforms and investments that Modi trumpeted—and which won him the support of voters who did not share his “Hindutva” agenda. That agenda, however, is undermining the economic agenda.

Investors are looking with mounting concern at Modi’s inability to manage this contradiction in his own support base. Foreigners are particularly concerned. As negative press increased abroad, potential investors have begun to feel skittish. “What to think about the recent anti-Christian and Muslim tirades and conversion propositions?” one of them, Lorenz Reibling of the German-American firm Taurus Investments, asked me on the verge of committing a major investment to India. “Conversion and ethnic/religious cleansing doesn’t ring well here in Germany particularly. The bizarre dream of a 100% Hindu India would be an India with little or no foreign support. That is not what India deserves.” He added, in an email: “I doubt the Middle Eastern investors would welcome an anti-Muslim policy either.

They could react by turning off the $-spigot. Europeans and Americans certainly would scale back considerably if Christians are exposed to an inquisition in reverse.”

Reibling was giving voice to what many investors abroad are already saying. The warning bells have already rung.

The Prime Minister finds himself in an invidious position in relation to his own supporters: he can’t live with them and he can’t live without them. But until he resolves this fundamental dilemma, the hopes of a Modi Miracle in the Indian economy will fade as rapidly as they rose.

Shashi Tharoor is a two-time MP from Thiruvananthapuram, and the former UN Under-Secretary-General. He has written 14 books, including, most recently, Pax Indica: India and the World of the 21st Century. This article was first published on ndtv.com

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