4.1 The 2014 Landslide: Social Media and Hologram Campaigns

One evening in April 2014, something strange happened in a village in Uttar Pradesh. Thousands of people had gathered in an open space in this village, which had no electricity. Farmers, crouching on the dusty ground, stared at an empty stage. Suddenly, a beam of light burst from the air. A man three meters tall appeared on the stage. It was Narendra Modi, the Chief Minister of Gujarat. He spread his arms and said, "Brothers and sisters, your lives are going to change." The crowd cheered. But Modi was not actually there. At that very moment, he was standing in a studio hundreds of kilometers away. The Modi on stage was an alter ego made of light—a 3D hologram.

This single scene encapsulates the essence of the 2014 Indian general election. That election was not merely a change of government; it was an event that changed the very grammar of Indian politics.

A Crumbling Dynasty, A Rising Chaiwala

Before Modi’s arrival, the Nehru-Gandhi family sat at the center of Indian politics. It was as if a single family had monopolized the leadership of the ruling party since the nation's founding. Ever since Jawaharlal Nehru served as the first Prime Minister (1947–1964), his daughter Indira Gandhi and grandson Rajiv Gandhi followed suit. In 2014, the Vice President of the then-ruling Congress party was Rahul Gandhi, Rajiv’s son. Nehru’s great-grandson was carrying on the political legacy into the fourth generation.

However, the Congress-led United Progressive Alliance (UPA) coalition was suffering from severe fatigue after ten years in power. Prices were soaring, and corruption scandals involving government officials broke one after another. The 2G spectrum allocation scandal (estimated to have cost the state approximately 1.76 trillion rupees), the coal block allocation scam (Coalgate), and the Commonwealth Games scandal were exposed in succession, labeling the administration the "Coalition of Corruption." Economic growth was slowing down. The GDP growth rate, which was 9.6% in 2010, fell to 6.4% in 2013. The media called this 'Policy Paralysis,' meaning the government was incapable of making any decisions.

The nearly 800 million voters under the age of 35 were furious. What they needed was not a dynastic heir, but someone who could get things done. Modi carved his way into this niche. He positioned himself thoroughly as an 'outsider.' A man from a lower caste who used to sell tea at a railway station (see Chapter 1). A man with no family, no wealth, and not even a spouse. Yet, he was a man of proven results who had led Gujarat to an average annual economic growth of over 10% during his 13 years as Chief Minister. Modi turned his own life story into the narrative of his election campaign.

The Man in the Air: Hologram Campaigning

First, one must understand the scale of India. It is 33 times the size of South Korea, with 814 million voters and 22 official languages. Physically traveling to every corner for campaigning was impossible. The Modi camp decided to overcome this impossibility through technology. They expanded the hologram technology they had tested during the Gujarat state elections (see Chapter 3, Section 3.3) to a national scale.

3D hologram equipment imported from the UK, over 200 high-performance projectors, and more than 400 satellite antennas were mobilized. Mobile stages made from modified trucks headed to rural villages across India. The principle was a digital upgrade of a 19th-century stage technique called 'Pepper's Ghost.' By projecting a beam onto a transparent foil installed at the front of the stage, a life-sized 3D stereoscopic image would float in the air. When Modi in the studio waved his hand, the Modi in a village hundreds of kilometers away waved his hand back.

During the election period, more than 1,300 hologram speeches were delivered. More than 14 million voters witnessed this 'Virtual Modi' in person. A giant figure of light appearing through the night sky in a village without electricity—Hindu mythology is full of stories of gods manifesting (Avatar) in multiple places simultaneously. Whether intentional or not, Modi’s hologram stimulated the circuits of that mythological imagination. "This man is no ordinary human." This impression was etched into the minds of tens of millions.

The cost was also significant. The BJP invested about 6 billion rupees (roughly 120 billion won at the exchange rate then) in the hologram campaign alone. It was the most expensive election campaign in Indian political history. The BJP's total officially reported spending for the 2014 election reached 7,140 crore rupees (about 1.2 trillion won), more than double that of the Congress Party.

Infiltrating Smartphones: Social Media Strategy

If holograms dominated the rural night sky, social media ruled the urban day. Modi had a poor relationship with mainstream media after the 2002 Gujarat riots; many reporters and editors treated him critically. Modi decided to leap over this barrier. He went directly into the palms of voters without going through the press. Twitter, Facebook, YouTube, and WhatsApp were his conduits.

As of May 2014, Modi’s Twitter followers numbered 3.9 million, with 13 million 'likes' on Facebook. The politician with the second-largest social media influence in the world after Barack Obama was a regional Chief Minister from India. Modi was the first Indian politician to hold real-time conversations with netizens via Google Hangouts, and his own mobile app, the 'NaMo App,' recorded over 10 million downloads. As of 2026, Modi's followers on X (formerly Twitter) have surpassed 100 million, ranking him among the top politicians globally.

The real weapon was not just Modi’s personal accounts. It was the digital operations headquarters called the 'IT Cell' organized by the BJP. Under the command of Amit Shah, this organization deployed about 1.2 million volunteers nationwide to translate Modi’s messages into over 100 languages and distribute them in real-time through WhatsApp groups. More than 100,000 Facebook groups were operated nationwide. Tailored messages were delivered—promising agricultural policies to farmers, jobs to the youth, and a safe society for women.

This digital mobilization system would later be criticized as a conduit for the spread of fake news and hate speech. The BBC documentary 'India: The Modi Question' pointed out that the IT Cell systematically distributed hate content against Muslims. The Indian government blocked the domestic screening of this documentary.

Turning Weakness into a Weapon: 'Chai Pe Charcha'

There was one decisive turning point during the election process. Mani Shankar Aiyar, a leader in the Congress Party, mocked Modi in public: "How can a man who sold tea become Prime Minister?" In Korea, such a disparaging remark about an opponent's background would have faced a massive backlash. The result was the same in India. Modi did not let this insult slide; instead, he embraced it. "That's right. I am a Chaiwala. I sold tea at a railway station. That's why I know the suffering of the common people."

He then held 'Chai Pe Charcha' (Conversation over Tea) events, connecting more than 1,000 tea stalls across the country via satellite. It was an event where Modi drank tea in a Delhi studio and had video conversations with citizens nationwide. The image of a boy who once sold tea now communicating with the nation through tea was a narrative placed exactly at the opposite pole of the aristocratic image of the Nehru-Gandhi family. The more the opposition tried to belittle Modi as a 'tea seller,' the more his 'underdog hero' narrative shone.

282 Seats, and the Shadows

May 16, 2014, election day. The results were overwhelming. The BJP alone won 282 seats. Including coalition partners, the NDA (National Democratic Alliance) secured 336 seats. For the first time in 30 years since 1984, a single party had won a majority (272 seats). The Congress party crashed to 44 seats, the worst defeat in the history of the Indian Parliament. Political analysts called it the 'Modi Wave.' Voters had not voted for the BJP; they had voted for the brand that was Modi.

Modi’s vote share was 31%. While this figure was dominant in India's multi-party structure, conversely, it meant that 69% of voters did not choose Modi. The distribution of votes in a first-past-the-post system created a massive disparity in seats. This structural characteristic would be highlighted once again in the 2024 election (see Chapter 9).

However, behind this brilliant victory lay an uncomfortable truth. Modi’s campaign spoke of 'Development (Vikas)' in large cities, but it used a different language in regions with strong Hindu colors. Hindu nationalism (Hindutva) was mobilized covertly and sometimes overtly. For the 200 million Indian Muslims, this election result was the beginning of caution rather than celebration.

And so, Modi entered New Delhi—the man who conquered the world's largest democracy using the 21st-century tools of social media and holograms. Indian politics was now reshaped from a confrontation between parties into a 'Modi vs. the Rest' framework. The center of power shifted rapidly from the cabinet to the Prime Minister's Office (PMO), and every decision began to pass through the single funnel of Modi.

4.2 Make in India: Doubling FDI, PLI Scheme

September 25, 2014, at the Vigyan Bhawan Convention Center in New Delhi. At the center of the stage stood a giant lion made entirely of gears. Dynamic yet elegant, this mechanical lion was a modern reinterpretation of the Ashoka Lion, India's national emblem. Three words were written below the logo: 'Make in India.' Prime Minister Modi spread his arms toward investors from around the world and said, "Come to India. Make things here. We will pave the way."

It was only four months since his inauguration. This was the first economic card Modi pulled out. Why manufacturing? To understand the answer to this question, one must first look at the distorted structure of the Indian economy.

The Paradox of an IT Powerhouse: A Country Without Factories

There is a typical image that comes to mind regarding India: IT engineers in Bangalore, Indian CEOs in Silicon Valley. This is correct. India is a global leader in the service industry, especially in IT outsourcing. The fact that the heads of global Big Tech firms—Sundar Pichai (Google), Satya Nadella (Microsoft), Parag Agrawal (formerly Twitter)—are Indian illustrates this well. However, therein lay the trap. As of 2014, while the service industry accounted for about 57% of GDP, manufacturing remained at a mere 15–16%. Compared to South Korea's manufacturing share of about 27%, it was less than half.

The problem was jobs. No matter how well IT companies do, only a tiny fraction of the total population can write code. Every year, 12 million young people flood into India's labor market. Compared to the 500,000 university graduates South Korea produces annually, it is 24 times more. Most of these young people were not university-educated and wanted to work with their hands. What they needed was not software companies, but factories.

Modi was someone who had already experienced this issue in Gujarat. During his time as Chief Minister, he built a reputation as a 'business-friendly' leader by attracting Tata Motors' Nano factory (see Chapter 3, Section 3.2). Now it was time to expand that experience to a national level. The fact that South Korea was among the development models he referenced is discussed in Chapter 7.

Opening the Bolted Doors: Dismantling FDI Regulations

The first step of Make in India was to unbolt the doors to Foreign Direct Investment (FDI). Since independence, the Indian economy had been so closed off it was called the 'License Raj.' To set up a single factory, one had to obtain dozens of government permits, and for foreign companies to invest in India, they had to navigate a labyrinth of regulations. While significant improvements were made after Manmohan Singh’s economic liberalization in 1991, core sectors like defense, railways, and insurance still remained closed to foreign capital.

Modi boldly opened these doors. He expanded the FDI limit in the defense industry from 26% to 49%, and later up to 100% under certain conditions. He allowed 100% foreign investment in railway infrastructure and raised the insurance sector limit from 26% to 49%, and then to 74%. For a Korean context, this was a shock similar to foreign companies being allowed to become majority shareholders in Korea's defense contractors or railway corporations.

At the same time, he applied the 'Red Tape to Red Carpet' strategy, proven in Gujarat, nationwide. He integrated dozens of separate licensing procedures into a single online window and introduced 'Competitive Federalism,' making state governments compete to attract investment. Just as Gujarat won the Tata factory, a structure was created where 28 states competed to attract foreign firms. As a result, India's ranking in the World Bank’s 'Ease of Doing Business' soared from 142nd in 2014 to 63rd in 2019. Jumping 79 places in five years was unprecedented in the history of these rankings. (However, the World Bank later stopped publishing the rankings in 2021 due to allegations of data manipulation. An internal audit found irregularities in the ranking calculations for some countries, including China, casting doubt on the reliability of the rankings themselves.)

The numbers responded. Annual FDI inflows, which were about $36 billion in the 2013-14 fiscal year, reached an all-time high of $81.7 billion in the 2020-21 fiscal year. Although it adjusted to about $71.4 billion in the 2023-24 fiscal year as global capital flows slowed, India firmly established itself as the biggest beneficiary of the 'China Plus One' strategy. Major deals were struck one after another, including Walmart’s $16 billion acquisition of Flipkart and investments by Google and Facebook into Reliance Jio.

Korean Companies Answer Modi’s Call

Korean companies were part of this massive flow of capital. In 2018, Samsung Electronics completed the world's largest smartphone factory in Noida, Uttar Pradesh. From this factory, the size of 35 soccer fields combined, millions of Galaxy smartphones poured out every month. Prime Minister Modi attended the inauguration in person, and President Moon Jae-in sent a congratulatory speech via video. Modi held Vice Chairman Lee Jae-yong’s hand and praised him, saying, "Samsung is building India's dream together." Samsung later expanded the Noida factory to start local production of semiconductor display components as well.

Hyundai Motor had been a 'mainstay of India' since it took root in Chennai in 1996. Riding the wind of Make in India, it expanded its production capacity and solidified its position as the second-largest player in the Indian market. In October 2024, its Indian subsidiary (Hyundai Motor India Limited) was listed on the Bombay Stock Exchange (BSE), recording the largest IPO in Indian stock market history (with an enterprise value of about $27.9 billion). It was an event that showed the world the value of the Indian subsidiary to the Korean headquarters.

LG Electronics set new standards for Indian home appliances in the refrigerator and washing machine markets. POSCO pursued the construction of a steel mill in Odisha, but faced difficulties for over a decade due to land acquisition and environmental regulation issues. This case became a textbook example of how the 'Red Carpet' and 'Red Tape' coexist in India.

As of 2025, about 550 Korean companies have entered India. However, some evaluations suggest that South Korea's investment in India has not yet reached its potential given the density of the bilateral relationship. This will be discussed in detail in Chapter 7.

PLI: "If You Make More, We'll Give You Money"

If Make in India opened the door and brought in capital, the key mechanism that connected this to actual production was the PLI (Production Linked Incentive) scheme. Incentive policies for electronics manufacturing were strategically pursued starting in 2016, and this became the prototype for the PLI. Later, as the need for supply chain diversification was highlighted by the COVID-19 pandemic in 2020, the PLI was expanded to 14 core industrial sectors (smartphones, pharmaceuticals, auto components, semiconductors, textiles, food processing, etc.). The total budget scale reached about 1.97 trillion rupees (approx. 32 trillion won).

The operating principle was straightforward. If a company increases production and its sales grow in India, the government returns 4–6% of that increase in cash. This was not an indirect benefit like a tax cut, but a method where money was deposited directly into the company’s bank account. If South Korea's semiconductor investment tax credit is a retrospective benefit, India's PLI was an immediate carrot: "Make it now, and we'll give you money now."

The most dramatic effect was seen in smartphone manufacturing. In 2014, there were only two mobile phone factories in India, and most of the demand relied on Chinese imports. The Modi government used a 'carrot and stick' approach, gradually raising tariffs on finished goods while providing incentives for domestic production. Samsung, Foxconn, and Wistron set up factories one after another. By 2024, India emerged as the world's second-largest smartphone manufacturer, with annual production exceeding 300 million units. Apple’s iPhones also began to be assembled in India. As of 2024, about 14% of global iPhone production comes from Indian factories, and this proportion is rising rapidly.

The Mechanical Lion Roared, But...

The achievements were clear. FDI more than doubled, and India emerged as a core destination for global supply chain restructuring. However, the goal of raising the share of manufacturing to 25% of GDP was not achieved. In 2024, it still remains around 17%. Despite the brilliant record of attracting investment, Modinomics found itself lacking when faced with the question of whether it led to sufficient jobs. The criticism of 'Jobless Growth' has been consistently raised by economists.

Fundamental obstacles also remained. It took years to acquire land, power supply was unstable, and logistics costs were still high. While Vietnam could get a factory running in six months, it was not uncommon for it to take 3–5 years in India. Korean companies were also feeling this reality. The process of getting the Samsung Noida factory running, the labor-management conflict at the Hyundai Chennai factory, and the endless land disputes at POSCO’s Odisha steel mill. The 'Red Carpet' was laid in front of the Prime Minister’s podium, but 'Red Tape' still remained on the factory floor.

And then there was the question: 'Growth for whom?' The fruits of Make in India appeared to be concentrated in giant Indian conglomerates like Adani and Reliance. In January 2023, the US short-selling specialist investment research firm Hindenburg Research published a report alleging stock manipulation and accounting fraud by the Adani Group, turning the Modi-Adani relationship into an international issue. The market capitalization of the Adani Group evaporated by over $150 billion in just a few days. Adani denied all charges, and while the Indian Supreme Court ordered further investigation by regulatory agencies, it did not recognize any direct illegal acts.

Nevertheless, the first term of Modi’s Make in India was an undeniable turning point in Indian economic history. Doors were opened, capital flowed in, and factories were built. India’s old label as a 'difficult country for investment' began to change into a 'land of possibility.'

4.3 Digital India: Aadhaar ID, Jan Dhan Yojana, UPI Revolution

A sweltering afternoon in 2015, in a remote village in Odisha. Sunita (a pseudonym), a single mother, looks at a short text message that arrived on her old feature phone. It was a notification that her government subsidy had been deposited. Just two years ago, she had to walk half a day to the town’s government office to receive this money and had to give 30% of the subsidy to a low-level official as a 'fee.' She couldn't even blame the official pocketing the money; Sunita had no documents to prove she was who she said she was. But things have changed now. Her 'Aadhaar' card, which contains her fingerprint and iris information, proves her existence, and the full amount was deposited into her bank account created through 'Jan Dhan Yojana' without a single rupee leaking.

The story of how Modi tore out India's old neural network and transplanted new digital arteries begins right with this scene.

A Country of 1.3 Billion Financial Illiterates

In 2014, India stood atop a giant paradox. It was a country that produced the world’s largest IT workforce, yet more than half its citizens didn't even have a bank account. When the government sent subsidies to the poor, they all leaked out in the middle. The words of former Prime Minister Rajiv Gandhi in 1985 were still valid 30 years later: "When the government sends 1 rupee, only 15 paise reaches the poor." This meant 85% of subsidies disappeared into the pockets of middleman brokers, ghost beneficiaries, and corrupt bureaucrats.

Modi declared he would solve this chronic problem with technology. He chose three tools: 'Jan Dhan (bank accounts),' 'Aadhaar (biometric ID),' and 'Mobile.' Together, these three were called the 'JAM Trinity.' It was a massive restructuring of power, stripping away the influence of the 'middlemen' who had dominated Indian society for thousands of years and directly connecting the central government to individuals.

Jan Dhan Yojana: A Bank Account for Every Single Person

On August 28, 2014, Modi launched the 'Pradhan Mantri Jan Dhan Yojana (Prime Minister's People's Wealth Scheme),' which he had previewed in his first Independence Day speech. The core was simple: we will open an account even if the balance is zero. We will provide a RuPay debit card for free. We will even include accident insurance. The idea was to eliminate the very concept of a high banking threshold.

Public sector bank employees flooded into rural villages with tablet PCs. On the launch day alone, 15 million accounts were opened. In the first week, 18.09 million accounts were opened, entering the Guinness World Records for the 'most bank accounts opened in one week.' As of August 2025, the number of bank accounts opened through Jan Dhan Yojana has surpassed 561.6 million. Of these, 67% are accounts in rural and semi-urban areas, and 56% are accounts in the names of women. The total deposit balance reaches 2.67 trillion rupees (approx. 43 trillion won).

Of course, there were criticisms that many were just 'empty' accounts, and indeed, as of July 2025, 130.4 million accounts (23% of the total) are inactive. However, these accounts soon became 'pipelines' into which government subsidies were directly injected.

Aadhaar: Fingerprinting 1.4 Billion People

If Jan Dhan Yojana laid the pipes, Aadhaar was the valve that let the water flow through them. It is a biometric ID containing fingerprints and iris information linked to a 12-digit unique number—a digital identity proof that is impossible to forge, equivalent to a resident registration card.

Aadhaar was not Modi’s invention. It was a project designed and launched by Nandan Nilekani—co-founder of Infosys—who served as the first chairman of the Unique Identification Authority of India (UIDAI) under the previous Manmohan Singh government. Modi took the technical platform Nilekani created with an IT entrepreneur's sensibility and raised it to a level of virtual mandatory use through political will. Currently, more than 99% of the 1.4 billion population have been issued an Aadhaar ID.

When Aadhaar, Jan Dhan accounts, and mobile were combined, a revolution occurred. The 'Direct Benefit Transfer (DBT)' system was completed, where food subsidies, gas subsidies, scholarships, and pensions that the government sends to the poor are injected directly into the recipient's bank account without any intermediate steps. According to a 2024 report by the BlueKraft Digital Foundation, the DBT system has blocked cumulative budget leaks of 3.48 trillion rupees (approx. 56 trillion won). In the food ration (PDS) sector alone, 1.85 trillion rupees were saved through Aadhaar-based authentication, and in the farmer support program PM-KISAN, 221 billion rupees were saved by filtering out 21 million ineligible beneficiaries. The number of beneficiaries increased 16 times from 110 million in 2014 to 1.76 billion, yet subsidy spending actually decreased from 16% to 9% of the total budget.

The experience of having money deposited into a bank account with a 'ping' of a text message, without having to go to a government office and pay a bribe—this led directly to the ironclad support for Modi among the poor.

The UPI Revolution: Paying for a Cup of Chai with a QR Code

If the spread of bank accounts was step one and the innovation of the welfare delivery system was step two, step three was the revolution in payment methods. The protagonist is the 'Unified Payments Interface (UPI),' launched by the National Payments Corporation of India (NPCI) in April 2016.

The structure of UPI is like this: it is an open-source platform that allows real-time remittances using only the other person’s phone number or a QR code, without the need to enter complex account numbers. If China’s Alipay is a closed system centered on a specific company, UPI is like a public railway. Private companies like Google Pay, PhonePe, Paytm, and WhatsApp provide services by competing freely on this public railway.

In the beginning, there was much skepticism. The question was whether digital payments could take root in an Indian society with an absolute dependence on cash. However, the demonetization of November 2016 (to be discussed in the next section) acted as shock therapy. People whose cash in their wallets turned into scrap paper overnight reluctantly installed digital wallets, and merchants began to put up QR codes in front of their shops. Simultaneously, Jio, the telecommunications subsidiary of India's largest company Reliance, released 4G data at prices virtually close to free, causing an explosion in smartphone distribution. Due to Jio's aggressive pricing policy, the price of mobile data in India became the lowest in the world at about $0.17 per 1GB. It was like pouring fuel onto a foundation.

The growth was phenomenal. Monthly UPI payment volume, which was 4.46 million transactions in January 2017, surpassed 18.5 billion transactions per month in 2025. In 2025, the annual transaction volume reached 228.3 billion transactions, and the transaction value recorded 299.7 trillion rupees (approx. 4,800 trillion won). The International Monetary Fund (IMF) recognized UPI as the world's largest real-time small-value payment system, and according to an ACI Worldwide report, UPI accounts for about 49% of real-time payment transaction volume worldwide. A single country’s system is processing half of the world's real-time payments (see Preface). As of early 2026, UPI users have exceeded 500 million.

From luxury shopping malls in Mumbai to street vegetable stalls, from rickshaw drivers to donation boxes in temples, all of India was covered in QR codes. The scene of paying for a 10-rupee (approx. 160 won) cup of chai with a smartphone became routine. India skipped the credit card stage and jumped directly from a cash society to a mobile fintech society. If South Korea reached Kakao Pay and Samsung Pay through the popularization of credit cards in the 1990s, India skipped that whole process at once.

The international community, taking note of UPI's success, began discussing the export of this system. Linkage with Singapore's PayNow has been pursued since 2023, and with France and the UK since 2024. It is a process where the public digital infrastructure created by India is establishing itself as a global standard.

Light and Shadow: The Blessing of Efficiency and the Fear of Surveillance

The World Bank evaluated that India achieved the financial inclusion task in six years, which would have taken 47 years for other countries. Nobel Prize-winning economist Paul Romer praised Aadhaar as "one of the most meaningful technological innovations in the world."

However, behind this brilliant display, shadows are also dark. As the fingerprints, irises, and financial transactions of 1.4 billion people were tied to a single digital ID, concerns grew over a 'Digital Panopticon' where the state could monitor every move of its citizens. In 2017, the Supreme Court of India declared privacy a fundamental constitutional right in the landmark K.S. Puttaswamy judgment, putting the brakes on the excessive mandating of Aadhaar. In a subsequent 2018 ruling, the Supreme Court ruled that Aadhaar could be used for welfare benefits and tax filing, but forcing it for opening bank accounts or mobile phone subscriptions was unconstitutional.

The elderly without smartphones and the lower classes with low digital literacy were marginalized in this system. Cases of death after being denied food rations due to Aadhaar authentication errors were reported in states like Rajasthan. Personal information leaks and fraud cases also spiked. In the 2024-25 fiscal year, digital payment-related fraud cases exceeded 13,500.

Modi created an efficient bureaucratic system through this technology. At the same time, it was also a tool to put 1.4 billion people into a single net. Digital India was both a hand of mercy that rescued the poor and a lens of power.

4.4 Light and Shadow of Structural Reform: Demonetization, GST, Swachh Bharat

On the evening of November 8, 2016, at 8:00 PM, Prime Minister Modi’s face appeared on TV screens across India. Citizens thought it would be an ordinary speech like any other. The sentence that came out of his mouth was a bombshell: "From midnight tonight, the 500-rupee and 1,000-rupee notes currently in circulation will cease to be legal tender." There were four hours left until midnight—four hours until 86% of the cash circulating in the market would become scrap paper.

In a Korean context, it was like the president suddenly declaring on the evening news, "Starting tomorrow, you cannot use 50,000-won and 10,000-won notes." Furthermore, the new currency had not even been printed in sufficient quantities yet.

A War on Black Money, or a Reckless Gamble

The justifications Modi put forward were threefold: we will unearth the 'Black Money' that corrupt rich people have buried under their mattresses, inside their walls, and in their fields. We will cut off the flow of terrorist funds by blocking counterfeit notes flowing in from across the border in Pakistan. We will forcibly transition India from a cash society to a digital society.

The only people who knew of this decision were the Prime Minister himself and a tiny handful of confidants. Reports surfaced that even the Governor of the Reserve Bank of India (RBI) was only notified a few hours before the announcement. There was no precedent for a case where such a scale of economic shock was delivered while maintaining this level of secrecy in a democratic country.

Chaos: People Who Died Standing in Line

Immediately after the announcement, India fell into chaos. People stood in line in front of banks for days and nights to deposit their old notes and exchange them for new ones. New notes did not come out of ATMs. This was because the newly printed 2,000-rupee notes were of a different size and did not fit into existing ATMs. Reports followed that more than 100 citizens had died of exhaustion and heart attacks while waiting in line.

The rural economy and small-to-medium commerce, which were absolutely dependent on cash, were paralyzed. Farmers abandoned sowing because they had no cash to buy seeds. Factories closed because they had no money to pay wages. During November, which was the wedding season, millions of families had to postpone ceremonies because they had no cash to buy food for guests. Daily laborers lost their means of livelihood overnight.

According to the RBI's annual report, the GDP growth rate for the third quarter of 2016-17 immediately following demonetization plummeted from 7.5% to 6.1%. The Centre for Monitoring Indian Economy (CMIE) estimated that 1.5 million jobs disappeared due to demonetization. Former RBI Governor Raghuram Rajan evaluated demonetization as a "policy where the long-term costs overwhelm the short-term benefits."

The Irony of 99.3%

The result was paradoxical. The black money that Modi vowed to "incinerate" was not incinerated. 99.3% of the invalidated notes were returned to the banks. The rich laundered their funds using all sorts of expedients, such as distributing deposits across the accounts of servants, relatives, and even the homeless. When the official report of the Reserve Bank of India confirmed this figure, critics attacked, saying "the very goal of the policy has failed."

In 2023, the Supreme Court of India also deliberated on this matter. By a 4-to-1 opinion, it upheld the constitutionality of demonetization, but Justice B.V. Nagarathna, who dissented, stated that "inflicting this scale of economic shock by the executive alone without parliamentary approval has the potential for illegality," leaving a debate over procedural legitimacy.

However, politically, it was a complete victory for Modi. Ironically, common people accepted the inconvenience they experienced as a "patriotic sacrifice for the nation." Even while standing in line at the bank, they felt a kind of catharsis, saying, "The rich must be suffering more than we are." Modi read this emotion accurately. The frame of a "holy war against the corrupt establishment for the poor" worked perfectly, solidifying his image as a 'leader of action' and a 'clean reformer.' In the long run, this shock therapy also produced the unintended success of accelerating the forced expansion of UPI and digital payments mentioned earlier.

GST: One Nation, One Tax

On July 1, 2017, before the shock of demonetization had even subsided, Modi dismantled another giant landmine: the introduction of the Goods and Services Tax (GST). It was the largest tax reform since independence in 1947.

Previously, tax laws in India differed by state. Each of the 29 states levied its own sales tax, value-added tax, entry tax, and entertainment tax. For a truck to carry goods from Gujarat to Tamil Nadu, it had to wait for days at checkpoints to pay taxes every time it crossed a state border. In a Korean context, it was like having to pay Gyeonggi-do tax, Chungcheong-do tax, and Gyeongsang-do tax separately while going from Seoul to Busan. Logistics costs were astronomical, and India was effectively 29 separate economic zones.

Modi went so far as to enact the 101st Constitutional Amendment under the slogan "One Nation, One Tax, One Market." He integrated the complexly intertwined central and local taxes into a single GST.

The chaos in the early stages of implementation was extreme. The tax rates, divided into five tiers of 0%, 5%, 12%, 18%, and 28%, flatly contradicted the slogan "one tax." Small and medium-sized merchants had to obsess over tax filing due to frequent regulation changes and IT system errors. The opposition mocked the GST as the "Gabbar Singh Tax" (after a famous movie villain).

However, as the system stabilized over time, positive effects emerged. As interstate checkpoints disappeared, logistics movement time was reduced by more than 20%. Tax revenue grew steadily as underground economy transactions came into the light. In April 2025, monthly GST collection reached an all-time high of 2.37 trillion rupees (approx. 38 trillion won), and the number of registered taxpayers exceeded 14 million. This was an increase of more than 75% compared to the 8 million at the beginning of implementation. The GST integrated India into an effective single market and became the foundation for providing a predictable business environment for foreign investors. The change that Korean companies first feel when building factories in India is this GST integration.

Swachh Bharat: Toilets Are More Important Than Temples

Alongside economic reform, there was a social reform that Modi poured his heart into. It was the 'Swachh Bharat Abhiyan (Clean India Mission),' which started on October 2, 2014, coinciding with Mahatma Gandhi’s birthday.

In a speech from the Red Fort, Modi broke a taboo: "Building toilets is more important than building temples." This remark, coming from the mouth of a Hindu nationalist, surprised the audience. He declared that he would make an 'Open Defecation Free India' by 2019, the 150th anniversary of Gandhi's birth.

Numbers are needed to understand the seriousness of this issue. In 2014, 62% of rural households in India did not have a toilet. According to UNICEF, about 550 million people were practicing open defecation. About 60% of the world's open defecation population was concentrated in India. For women, this was an issue of safety and dignity beyond hygiene. Women who had to go out to deserted fields in the dark became targets of sexual crimes.

The government provided subsidies to build toilets in homes, schools, and public spaces. About 110 million toilets were constructed over five years, and in October 2019, the Indian government officially declared the attainment of 'ODF (Open Defecation Free)' status. The image of Prime Minister Modi himself cleaning the streets with a broom was repeatedly exposed in the media, and the glasses-shaped Swachh Bharat logo was printed on all Indian banknotes and official documents, allowing Modi's presence to permeate everyday life.

Of course, cases were reported where toilets were built but used as storage, or not used due to water shortages. According to a 2019 survey by the National Statistical Office (NSO), the actual usage rate among households with toilets was around 95%, falling short of 100%, and in some regions, cultural customs still preceded infrastructure. However, it is certain that it contributed to bringing hygiene issues to the center of politics and changing the daily lives of the poorest women. This campaign gave Modi the image of 'Gandhi’s successor' and created a solid support base among rural women.

The Politics of Pain

Demonetization, GST, Swachh Bharat—these three structural reforms have a commonality. While they entailed enormous chaos and pain in the short term, Modi succeeded in converting that pain into his own political asset. The appeal to "swallow bitter medicine for the nation," combined with nationalist sentiment, exerted a paradoxical rallying power.

Critics criticized this as "packaging organized incompetence as patriotism." Supporters praised him as the "only leader who broke structural contradictions that no one had touched for decades." The judgment is up to the reader. What is clear is that through this process, Modi solidified his image as a "strong leader who does not avoid difficult decisions," and that image became the foundation for his re-election in 2019.

4.5 Security Nationalism: Uri Strike, Balakot Air Strike

At 3:30 AM on February 26, 2019, a flight of Mirage 2000 fighters of the Indian Air Force took off, piercing the darkness. The target was a terrorist group training camp located in Balakot, Khyber Pakhtunkhwa province, deep inside Pakistani territory across the Line of Control (LoC). It was the first time since the Third Indo-Pakistani War in 1971 that Indian fighters had crossed the Pakistani border.

This dawn sortie was not just a military operation. it was an event that fundamentally changed India’s security doctrine and a political momentum that imprinted Modi as the 'Guardian of India (Chowkidar).'

Scrapping Strategic Restraint

To understand the relationship between India and Pakistan, the closest comparison is the relationship between North and South Korea on the Korean Peninsula. The two countries, which have fought four wars since the partition and independence in 1947, are tied by the unsolvable knot of Kashmir. Pakistani intelligence (ISI) has waged a 'hybrid war' for decades, using terrorist groups as proxies to attack India. In December 2001, the Indian Parliament building itself was attacked by armed terrorists, killing nine people, and in November 2008, ten armed members of the Pakistan-based terrorist group Lashkar-e-Taiba (LeT) occupied the Taj Mahal Hotel and other locations in Mumbai for 60 hours, killing 166 people.

The response of past Indian governments was 'Strategic Restraint.' Concerned about escalation between nuclear-armed nations, they maintained a passive attitude limited to diplomatic protests and appeals to the international community. Even when the 2008 Mumbai attacks killed 166 people, the Manmohan Singh government refrained from military retaliation. The emotion felt by many Indian citizens was anger and helplessness.

Modi’s arrival changed this formula. Notably, he started with a gesture of peace. He invited Pakistani Prime Minister Nawaz Sharif to his inauguration in 2014, and on Christmas 2015, he made a surprise visit to Lahore, Pakistan, to congratulate Sharif on his birthday. However, when the Pathankot airbase attack broke out in January 2016, Modi coldly flipped the board: "Dialogue and terror cannot go together."

Uri: Crossing the Line of Control

On September 18, 2016, Pakistani armed terrorists infiltrated an Indian Army base located in the Uri region of Kashmir. In a dawn surprise attack, 19 Indian soldiers were killed. All of India seethed with rage.

Eleven days later, on the night of September 29, Modi made a decision. Indian Army special forces (Para SF) infiltrated across the Line of Control on foot under the cover of night. They simultaneously struck several terrorist 'launch pads' within Pakistan-administered Kashmir, killed a significant number of terrorists and Pakistani military personnel, and returned safely.

The Indian government officially announced this as a 'Surgical Strike' the next day. The key lay in the 'official announcement.' In the past, the Indian military might have performed small-scale operations near the Line of Control unofficially. However, it was the first time the government publicly admitted to and promoted an LoC-crossing operation. This directly shattered Pakistan's calculation that "India will not dare touch us, a nuclear power."

This operation was made into the Bollywood blockbuster movie 'Uri: The Surgical Strike,' which became a massive hit. The movie line "How's the Josh? (How is the morale?)" became a buzzword for Modi supporters. Modi even shouted this line himself at election campaign rallies.

Pulwama and Balakot: The First Air Strike Since 1971

On February 14, 2019, just a few months before the general election, an even greater tragedy occurred. In Pulwama, Jammu and Kashmir, a vehicle laden with explosives rammed into a convoy of the Central Reserve Police Force (CRPF). 40 personnel were killed. The Pakistan-based terrorist group Jaish-e-Mohammed (JeM) claimed responsibility. What was shocking was the fact that the suicide bomber was not a Pakistani national, but a 22-year-old local youth from Kashmir, Adil Ahmed Dar. It was a signal of how serious the radicalization in Kashmir had become.

Modi declared he would give the military full authority. Twelve days later, at dawn on February 26, a flight of Indian Air Force Mirage 2000 fighters entered Pakistani airspace and dropped precision-guided munitions on the JeM training camp in Balakot.

This was on a different level than the Uri strike. It was an air strike using fighters rather than a ground infiltration by special forces, and it struck deep within the Pakistani mainland rather than near the Line of Control. For nuclear-armed nations to mobilize air power to conduct bombings deep within each other’s territory was an extremely rare event globally.

Wing Commander Abhinandan and 60 Hours of Crisis

The next day, Pakistan launched a counterattack. A dogfight between the fighters of both countries ensued, and an old MiG-21 fighter of the Indian Air Force was shot down. A crisis occurred when the pilot, Wing Commander Abhinandan Varthaman, was captured alive by the Pakistani military. It was a moment when two nuclear powers went to the brink of all-out war.

However, faced with international pressure and the hardline stance of the Modi government, Pakistani Prime Minister Imran Khan returned Wing Commander Abhinandan after 60 hours, calling it a "gesture of peace." The image of Abhinandan bravely crossing back into India with a bandaged face and his trademark mustache was broadcast live across India, and he became a national hero. Abhinandan received the Vir Chakra medal and was promoted to Group Captain in 2022.

The Battle of Truths, and Why It Didn't Matter

Controversy remained over the actual scale of damage from the Balakot strike. The Indian government claimed to have "killed numerous terrorists," but Western media like Reuters and AP, along with satellite image analysis from the European satellite analysis organization DigitalGlobe, countered that "bombs fell in the forest, only knocking down trees." Pakistan took foreign journalists to the site the day after the strike to show that "there was no damage."

However, for Modi, facts were a secondary issue. What was important was the catharsis felt by the Indian people. "We are no longer just taking it." "Our fighters invaded the enemy's inner sanctum." Modi’s real strategy was to convert this emotional energy into his power.

Security Swallows the Election

The Balakot strike completely changed the landscape of the 2019 general election. At the time, criticism of the Modi government's economic failures, such as rising unemployment, rural economic stagnation, and the aftereffects of demonetization, was growing. Rahul Gandhi of the opposition Congress Party (INC) attacked by digging into allegations of corruption regarding the introduction of French-made Rafale fighters. "Chowkidar Chor Hai (The watchman is a thief)!"

Modi turned this attack on its head. He added 'Chowkidar (Watchman)' in front of his Twitter ID and launched the "#MainBhiChowkidar (I am also a watchman)" campaign. Tens of millions of supporters added 'Chowkidar' in front of their SNS names, and the internet was flooded with the wave of "I am also a watchman protecting this country."

At campaign rallies, Modi shouted: "We enter the enemy's house and hit them (Ghar mein ghus ke marenge)!" The crowd was ecstatic. Life-related issues like unemployment, prices, and farmer debt were sucked into the black hole of 'national security.' An atmosphere was created where the opposition's criticism of economic failure was denounced as 'anti-national behavior.'

Security Nationalism: A Double-Edged Sword

The result was a landslide victory for Modi. In the 2019 general election, the BJP won 303 seats, more than the 282 seats in 2014. It was the result of the explosive synergy between security nationalism and Hindu nationalism.

Modi shifted India’s external strategy from 'Passive Defense' to 'Active Deterrence.' Beyond military utility, the Uri strike and the Balakot strike instilled the psychology that "We are a great power" in the 1.4 billion citizens.

However, every sword has two edges. In the name of security, the opposition was denounced as "those who want to become heroes of Pakistan," and critical media were branded as "enemies of the state." The gaze toward the Muslim residents of Kashmir became even colder. Security nationalism became armor that protected India from external enemies, but at the same time, it became a press that compressed India's internal diversity and democratic space.

In April–May 2025, Indo-Pakistani relations fell into a state of extreme tension once again. When a terrorist incident occurred in Pahalgam, Kashmir, where 26 tourists were murdered, the Modi government took measures exceeding those of 2019, such as the effective suspension of the Indus Waters Treaty, the expulsion of diplomats, and the closure of airspace and ports, and the possibility of military engagement between the two countries seemed to be becoming a reality. The development of this situation is covered in Chapter 9.

The tool of 'security nationalism' that Modi introduced into Indian politics became a frame that he created, but also one that traps him. This is because the vengeful spirit of the public, once awakened, can exceed the range that a leader can control.