Twenty-six years after he made news as the voice of beleaguered Indian big business, industrialist Rahul Bajaj has once again spoken on their behalf. In 1993, he voiced their fear of foreign competition. Today, he voices their fear of domestic governance. Fear of arbitrary governance is only one side of a multi-dimensional problem that Indian business has come to confront. There is also a growing concern about economic slowdown and policy uncertainty. Bajaj is known to speak a lot, and even shoot his mouth off on occasion, but he is a widely respected and a hugely successful leader of Indian business. His views must be heard with care.
In 1993, the then finance minister, Manmohan Singh, was publicly dismissive of the concern Bajaj and friends articulated about the threat to domestic business from external economic liberalisation. The business media also did not share the concerns of big business, dubbing those who met at a Mumbai hotel to draft a memorandum of shared concern regarding foreign trade and investment policy, as “The Bombay Club”. The appendage of the word “club” damned them.
Prime Minister P V Narasimha Rao, however, paid heed. He reached out to business leaders and fine-tuned policy. He said he was turning neither Right nor Left, but would walk the Middle Path. His critics, including the more enthusiastic liberalisers, called it the “Muddle Path”, but the PM ensured he had everyone on board, stayed the course and moved India forward. The time has come for Prime Minister Narendra Modi to also reassure the nation that he will neither swerve to the Right nor the Left, but walk the Middle Path of “sabka saath, sabka vikas, sabka vishwas”, with greater conviction.
If, in 1993, Bajaj voiced business’s “concerns”, today he voices its “fears”. There is a world of difference between fear and concern. Concern can be about bureaucratic procedures and delays, poor infrastructure, dumping of subsidised goods by foreign competitors, and so on. Fear is often about the knock on the door, the tap of the phone, mysterious acts of retribution by persons in power. They do no good to the reputation of a liberal democracy. It is good that Bajaj has spoken openly and it is equally good that Union Home Minister Amit Shah has publicly reassured him, stating emphatically that the government would “have to make the effort to improve the atmosphere”.
It is not clear, though, how much of the fear of big business that Bajaj sought to convey is due to the chinks in their own armour and how much is due to unfair harassment. Indian business leadership has not covered itself with glory, still unable to run globally competitive businesses and continuing to seek a “level-playing field” seven decades after Independence. The relationship between government and business, therefore, remains fraught. It is characterised by feudal supplication, on the one hand, and a willingness to cut corners and buy political cover, on the other. It has to be said in Modi’s favour that he has been more forthright in weakening the foundations of crony capitalism than any previous government.
What ails this government is precisely what has ailed all governments — the arrogance of power. While such arrogance is often a mask for incompetence, business persons tolerate that arrogance in the hope of benefitting from the incompetence, and consequent arbitrariness. It is this incestuous nexus that Prime Minister Modi has tried to break, but in doing so he may have ignored the impact it would have on investor sentiment and business confidence. Clearly, it is time for some course correction. The government has taken a series of policy steps to improve the environment for business. Equal attention has to be paid to improving governance and better functioning of existing institutions, both at the Centre and in states.
The problem is not specific to the current ruling dispensation. It is inherent to the feudal nature of democratic governance in India. Today’s humble in Opposition were yesterday’s arrogant and arbitrary in power. Yesterday’s beacons of hope have become today’s cause for despair. That is true in state capitals too. Power tends to corrupt and absolute power corrupts absolutely. It is an old adage, everyone quotes Lord Acton approvingly, yet few have mastered the art of wearing and bearing power lightly on one’s shoulders.
Part of the problem in the government-business relationship is that both sides need each other and loath that fact. For Prime Minister Modi, the current conjecture, with a combination of an economic slowdown, political setbacks and foreign policy challenges, is a moment of reckoning. He has faced setbacks before, but the multiple challenges he faces today require a major reset in policy and politics. More of the same cannot and will not do. He may still have a significant chunk of the national vote with him, but there is growing restiveness in his traditional constituencies. Both his slogans of a “New India” and a “$5-trillion economy” have lost their shine and sheen.
The Opposition still has nothing new to offer. Its best faces remain those of an ageing leadership — from Sonia Gandhi and Manmohan Singh to Sharad Pawar — and its best ideas are from manifestos of a bygone era. Provincial leaders offer no national alternative. Given this situation, Prime Minister Modi owes it to the nation to make something of the massive mandate he received. It may have been a mandate for a nationalist platform but nationalism means nothing without economic development.
The idea of a Rising India has been devalued and diminished by a faltering one. India is once again at a critical crossroads but runs the risk of yet again missing the bus. The focus of governance has to move away from divisive issues, including issues of identity and citizenship, to the here-and-now of investment promotion, employment generation and the building of a capable and competitive economy. Governance in public institutions, including in the fields of education, has to be prioritised for improvement. No one but the prime minister can and must provide the leadership needed to address these challenges anew.
This article first appeared in the print edition on December 3, 2019 under the title ‘Mr Bajaj speaks again’. The writer is a policy analyst and former media advisor to prime minister of India.
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