India can defeat jihadi Islam

In this column I have said before that the main reason why I supported Narendra Modi was because I believed him when he said that he would move India in a new economic direction. By this I mean that he would move firmly away from the Nehruvian socialism that kept India poor by putting the main levers of the economy in the hands of the State. He has not succeeded in doing this because every attempt at real reform has met with jeers from our socialist Opposition leaders, and sly but strong resistance from bureaucrats who derive power from the complex infrastructure of regulations, rules, inspectors and licences that decades of socialism created.

Modi like Manmohan Singh has been forced to reform by stealth. He seems still to believe that ‘government has no business to be in business’ but not a single major public sector company has been privatised since he became PM. Not even Air India. The word ‘privatisation’ cannot be uttered without people like Rahul Gandhi immediately shrieking about the ‘crown jewels’ being sold. This happened last week when the Finance Minister announced a National Monetisation Pipeline. She explained defensively that this is not privatisation but an attempt to monetise public sector assets.

As someone who believes that the public sector is a bottomless pit that sucks up money that could be better spent on improving public services, I welcomed the policy and was vilified by Dynasty loyalists and sundry socialists. They accused me of not understanding that the public sector was meant to create jobs and not make profits. Well, the truth is that it has created too few jobs for too much investment. The charge that truly astounded me was that the private sector must not be trusted because it created NPAs (non-performing assets) and corruption. Almost every public sector company is an NPA. And, there is no shortage of crooks and corruption.

We just hear too little about them. It is true that Vijay Mallya and Nirav Modi fled without paying their loans, but why do we hear so little about Ravi Parthasarathy who did the same thing? Was it because the company he headed, IL&FS, is a public sector company whose main investor has been the Government of India? In 2018, just before this company posted a loss of Rs 99,354 crore, Mr Parthasarathy, a famous socialite and bon vivant, fled to London supposedly to receive treatment for cancer. When the noise died down, he returned to Mumbai and lived quietly while his subordinates went to jail. Parthasarathy was safe, until last June, because he had cultivated some of the most powerful men in Delhi through an interesting system of bribery. The sons of senior officials and politicians always found jobs in IL&FS and those who needed funds for expensive foreign educations were also helped, as were wives who wanted foreign exchange on trips abroad. Parthasarathy is now rotting in a Chennai jail because in June the Tamil Nadu Economic Offences Wing managed to surprise him at home and arrest him.

Not only are public sector companies often dens of more iniquity, nepotism and corruption than private companies, they have less excuse because instead of creating wealth for India they have served mostly to suck it up. They are so unprofitable that it is estimated that five companies account for 40% of all profits. The public sector needs real reform, and the Prime Minister deserves praise for attempting it.

India will never see real prosperity until we realise that socialism was a bad idea that should have been abandoned long ago. Never has India needed more to show that it can become the economic hub of the subcontinent. This does not mean that our problems with jihadi Islam will die a quiet death. They will not. And we must never forget 26/11 because it can happen again. We need to become strong enough to prevent it.