What does the Radia-tapes-Raja saga tell you about the power of corporate India? You can take your cue from Deng Xiaoping (learn truth from facts) or N.R. Narayana Murthy (look at the data first),and the picture that emerges challenges the popular stereotype being built up after the tapes became public,of rampaging corporate czars holding India,or specifically New Delhi,to ransom. It may indeed be that corporate India is now at its weakest post-1991.Until a few months ago,Ratan Tata was chairman of the Investment Commission set up by UPA 1. Reporting directly to the prime minister,and including other eminent captains of Indian business,HDFC Chairman Deepak Parekh and former Hindustan Lever Chairman (and Gandhi family confidant) Ashok Ganguly,the commission was expected to attract big-ticket foreign investments. It was not only to sell the India story to foreign investors,but also to help them cut red tape and secure fast-track clearances. Today,if Ratan Tata says that he needed to hire Niira Radia as he did not have permanent connections in Delhi to secure a level playing field for his business,what does it tell you about his power? Or that of corporate India?
Normally you would have expected Indias largest,most diversified and certainly most respected corporate group to hit all the right buttons and move on. But not in this fascinating phase in our post-reform political economy where corporate India has seen its power hit rock-bottom exactly when there is talk,and with good justification,of rampant crony capitalism. Just what is going on?It is not important which side of any inter-corporate divide you are on. Any which way,you find the conventional private sector losing not just political clout,but even access,often seeing itself denied the social niceties and respect it had come to take for granted. Those running the three main chambers CII,FICCI and Assocham would never admit it,but their power is now at its lowest point since 1991. The prime minister rarely,if ever,talks to corporate India. Government representation at the CII-World Economic Forum annual showpiece,the India Economic Summit,has rapidly declined over the UPAs six years. In fact,the edition last month was the poorest of all. The prime minister of course gave it a pass; Pranab Mukherjee made a brief visit to speak in his stead,and then most of the top ministers stayed away. This years summit had probably the poorest levels of interest ever,sometimes presenting empty halls to reasonably serious panels. Similarly,under the UPA,official Indian representation at Davos has steadily declined. At the January 2011 Davos conference India is again the theme,for a rare second time in five years; and yet CII and the World Economic Forum are struggling to get senior ministers to represent the government. It is a strange paradox: UPA enjoys the 9 per cent growth creates the good news India story and funds its populist yojanas,but is shy of being seen with those who have made it possible,our entrepreneurs.How is one to explain this contradiction where corporate India is so orphaned that even a Ratan Tata has to hire a lobbyist from hell and Mukesh Ambani needs to pay for a share of her time as well? (Once upon a time,a strategic phone call would have been enough.) Or when Sunil Bharti Mittal,one of Indias most successful self-made post-reforms entrepreneurs,is driven up the political wall by a good-for-nothing minister like Raja? Or how come the redoubtable Anil Ambani has his coal linkages all tangled up while sundry nobodies with political linkages squat on millions of tonnes of reserves? And this when almost everyone,from Raghuram Rajan to The Economist to Newsweek rank crony capitalism as the biggest threat to the India story.
sg@expressindia.com
