Addressing a global investors summit convened by the Haryana government, industrialist Anand Mahindra had some advice to offer to the state administration. An essential condition for attracting investment, he said, was a stable law-and-order situation and the maintenance of social harmony. Mahindra’s comments were made in the context of the recent Jat agitation that convulsed Haryana, resulting in several deaths and the destruction of public infrastructure and private property. But his advice holds true for governments across the country.
In Haryana, the state administration visibly collapsed under the weight of the Jat agitation. In the words of the state human rights commission chairperson, Justice Vijender Jain (retired), the police and civil administration were “mute witnesses” when the mobs ran riot. Chief Minister Manohar Lal Khattar failed to gauge the turbulence in the Jat community, which makes up nearly 30 per cent of the state’s population. His energies since taking over as CM a year ago have been directed towards implementing an ideological agenda that includes dictating dietary choices of citizens rather than in beefing up the state apparatus. When the unrest turned violent, therefore, the administration was caught unprepared. The police baulked at the challenge and the political leadership lacked the will and the skill to negotiate firmly with the agitators. Of course, there has been mounting concern within the Jat community about the declining returns from land and the shrinking of other employment avenues. However, public policy cannot be influenced by the threat or unleashing of violence.
Rural distress calls for surplus agriculture labour to shift to industrial jobs. But the violent Jat agitation may have driven away precious capital and, therefore, jobs.
As Finance Minister Arun Jaitley pointed out, investors shun states that can’t ensure the rule of law. In the past, states like West Bengal have seen capital flee in the wake of social unrest. Much of Haryana’s industrial growth has been due to its proximity to Delhi. That may not always be sufficient to attract or retain industry. When state governments prepare to compete with each other for capital, they need to first assure industry of a peaceful social environment.