While waiting for Finance Minister Nirmala Sitharaman to appear at the Express Adda last week in the glittering ballroom of the St Regis Hotel, I got chatting with some important businessmen. I asked them what the mood was now in Mumbai’s mighty corridors of commercial power. They said without hesitation, “The mood is gloomy. Nothing is happening at all on the investment front and the government is not paying its bills so there is no improvement on infrastructure… The NHAI cannot expect roads to be built if it doesn’t pay its contractors.” As soon as they finished talking, these worthy gentlemen looked nervously around and said that they would be grateful if I did not quote them. So they shall remain nameless. Suffice it to say that what they said is something I hear almost daily in this city, whether I am talking to big businessmen or small shopkeepers.
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In the words of one big businessman who also requested anonymity, “We had hoped that Modi’s first Budget after winning a second term would indicate signs of major reforms, but this did not happen. They say that the Budget was prepared by bureaucrats and handed to the Finance Minister to read out which is why there was nothing new in it. That is unfortunate. The situation in the private sector is so grim that solutions will only be found if Modi appoints an economic czar, like he has a political czar in Amit Shah.” When I asked if Nirmala Sitharaman could become that czarina, he said she had done a good thing by lowering corporate taxes but not much else had happened.
I arrived early at the Adda to get a seat close enough to the stage. I wanted a chance to ask the Finance Minister a question I have been longing to ask her about, something she said while imposing her super-rich tax in the Budget. She had said it would affect less than 5,000 super-rich Indians so she had no problem imposing it. I wanted to ask Nirmala Sitharaman if she was ashamed that in a country of more than a billion people there were only 5,000 super-rich Indians. So as soon as the floor was open for questions, I asked my question. She said she would like ‘millions of Indians’ to come into the super-rich bracket. What was she doing to make this happen, I persisted, and she said, “I have lowered corporate taxes, haven’t I?” She smiled as she said this so I was not sure if she was being ironic or serious. But, the truth is that she will have to do much, much more as Finance Minister if we are to see that miserable figure of 5,000 rise to even 50,000 by the end of Narendra Modi’s second term as Prime Minister. At the moment super-rich Indians are fleeing in their thousands to countries in which it is easier to do business.
The Prime Minister routinely announces proudly that India has gone up many notches on the international charts that measure the ease of doing business. If only he could wander unnoticed in the city that we grandly call India’s commercial capital, he would discover that he has little to be cheerful about. There is a peculiar menace in the air that has intensified in his second term because petty officials in positions of huge regulatory power appear to believe that it is open season on businessmen. It is as if they are conspiring to ensure that India remains stuck in a sort of undeclared licence raj, that now comes in the form of regulations instead of licences. It is no surprise at all that investment has not picked up.
Unless it does, there is little hope that those 12 million new jobs that need to be created every year will begin to happen. Wherever I go these days, I meet fashionably dressed young men who have about them a restless, angry quality. When I stop to talk to them, they tell me that they are all educated and so do not think that they should become farmers. In any case, they say, there are too many people in every family already employed on the farm. They want real jobs, they say, jobs that will enable them to better their lives and better the lives of their children. The dream of prosperity that Modi sold them remains a dream. It is these restless, angry young men who are meant to be India’s greatest asset and they are losing hope. If there is one single factor that could cause a sudden, sharp drop in Modi’s immense personal popularity, some day soon, it is his seeming inability to chase away the dark clouds that continue to hover darkly over the economy. Modi’s ministers who blame this enduring downturn on the global situation fool only themselves. Nobody believes what they say.
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