EPISODE #10 BUSINESS NO LONGER A DIRTY WORD
For almost ever politicians have been duplicitous in their dealing with business. Associations were mostly sotto voce. This narrative may be just about to change.
Hi Everyone,
A very happy Monday to you.
Last week may well be another turning point for the political and economic history of modern India.
In an intervention in the Lok Sabha Prime Minister Narendra Modi shunned political correctness and celebrated businesses as “wealth creators” . No doubt it has left the government vulnerable to political criticism. However, taken together with the seminal Union Budget presented on 1 February which identified the private sector as the new commanding heights of the economy, the PM’s remarks suggest a significant ideological shift—the topic of my conversation this week.
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Pro-business
Last week Prime Minister Narendra Modi stunned everyone when he summarily claimed in Parliament that doing business is not a four-letter word. Instead, he went a step further and identified entrepreneurs as “wealth creators”.
The prevailing context makes his remark even more compelling. He made this claim in Parliament—the sanctum sanctorum of Indian democracy. And at a moment when a clutch of enraged farmers camped on the outskirts of Delhi and backed by several political parties, including the Congress, have been alleging that the new farm laws are a sell out by the government to big business.
Replying to the motion of thanks to the President in the Lok Sabha, PM Modi threw political caution to the winds and said:
“I would like to remind my friends in the Congress that if the public sector is critically important for the country then so is the participation of the private sector.”
Modi further elaborated his defence by listing the achievements of the private sector in key sectors of the economy like telecom and pharmaceuticals, before making his case for refreshing the prevailing mindset.
“(Yes) There was a time when the private sector was treated with suspicion,” he said, before adding, “Everybody should get chance. The culture of calling businessmen crooks and abusing them may have at one time won votes. Kindly recall I had stated this from the ramparts of Red Fort (during the Independence Day address) that wealth creators too are required. Unless they distribute their wealth (by creating enterprises and employing people) how will the poor benefit. How will jobs be created?”
A closer scrutiny suggests that the PM chose his words carefully.
Not only is he taking the battle to his political rivals, he has also put the private sector on notice: no excuses going forward. For the last six years India Inc has carped at what they claim is an unfair campaign painting them as crooks. As a result they have been reluctant to take up the desired role as a stakeholder in the economy; some even quietly relocated abroad. By suggesting that everybody should have an opportunity, the PM is also signalling his backing for a rules-based regime.
The PM’s remarks in the Lok Sabha (and the guiding principles underlying Nirmala Sitharaman’s Union Budget) have unequivocally set the record straight and created the political space for a fundamental rethink on how we look at private enterprise. And by according them respect the PM has implicitly included businessmen as stakeholders in nation re-building—the larger narrative Modi has deployed to justify the structural, and often times uncomfortable, change he is initiating.
Significantly, India Inc was quick to take the cue.
A Mindset Reset
Actually the prevailing trust deficit with business and Indian society is mutual and a hang over from the past.
The former chief economic advisor Arvind Subramanian had summed up this dilemma rather well in an interview granted to me in my previous avatar as a journalist at Mint, the business daily from the Hindustan Times group.
“My hypothesis is that India is affected by stigmatized capitalism, where there is not enough trust in the private sector or in the ability of the state to regulate the private sector. It is making it much more difficult to give the private sector a bigger role. It is easier to give a public or a quasi-public entity a bigger role rather than getting more private sector participation."
A third of us who are on the wrong side of 35 years may recall how businessmen were negatively caricatured in popular cinema. While the hero was almost never cast as a businessman, inevitably the role of the villain was reserved for them.
A fascinating piece of academic work by Nimish Adhia, Associate Professor of Economics, Manhattanville College, NY, actually established this empirically. Adhia discovered that for three decades businessmen were negatively portrayed in Bollywood cinema. I tracked down an interview conducted with him in 2010 in which he explains his thesis about this transition from villain to hero.
Adhia cites two examples from Bollywood to make his case about how the casting of businessmen transformed incrementally in the 1980s and then fundamentally in the 1990s.
First where the businessman was the villain (click the link to check it out):
Reel Life vs Real Life
Reel life was clearly ahead of real life (especially with respect to politicians) with Indian business continuing to be in the cross hairs of public rebuke. The massive scandals involving spectrum and coal auctions and the alleged heist of bank funds by flamboyant businessmen like Nirav Modi and Vijay Mallya only reinforced this stigma surrounding business.
In fact, candidate Modi in the run-up to the general election of 2014 had made alleged corruption in high office the centrepiece of his criticism of the two-term tenure of the Congress-led United Progressive Alliance. Interestingly though, almost immediately after coming to power the Bharatiya Janata Party (BJP)-led National Democratic Alliance initiated a subtle pivot.
In August 2014 it was finance minister Arun Jaitley, who in a reply to a debate in the Rajya Sabha on his first Union Budget (presented a month earlier) who coined NDA’s governance ideology: pro-business and pro-poor. Later he followed up with a post on his Facebook page saying:
“Unless government gets revenue, it cannot build infrastructure and service the welfare schemes for the poor. By being pro-business and pro-poor I am not contradicting; but both have to exist at the same time.”
But then in 2015, Rahul Gandhi, vice president of the Congress party, stunned the NDA with his “suit-boot ki Sarkar” jibe. Many believe that this was a turning point with the government thereafter focusing more on social welfare, even while it ratcheted up pressure on crooked businessmen.
What Modi did in Parliament last week was to attempt to bury this ghost, even while Gandhi continues to claim that NDA was practising cronyism—which benefitted the rich businessman.
Indeed it is a new chapter in an ideological face-off between two rival political parties. We will have to wait and see who will prevail: Whether, going forward, real life will finally play catch up and mimic reel life.
At the least it has stoked a debate on a long held belief: all enterprise is bad.
Recommended Reading
Last week a classmate of mine from school (Yes, it was a looong time ago. But then thanks to social media our association revived and endured.) shared a compelling story about two young entrepreneurs.
Their firm, Noccarc Robotics, successfully manufactured a ventilator in 82 days! And, this during the covid-19 pandemic.
Hope you enjoyed the share and left you inspired about India’s future.
Till we meet again next week. Stay safe.
Another great piece well researched AND to the point, very relevant in our present times. Socialism has played a big spanner in the works by creating a work force of sloths. Why should we feel bad if we create wealth and riches? Time for Rahul and his thinking of hum do hamare do is over. We further need to resolve to ease the control of babus to the minimum to ensure the benefits of galloping economy is passed on to the last Indian in the line.
Excellent as usual Anil.
I just hope that indian public which has long been given a dose of "Socialism+business are bad" think carefully what PM was saying and why he was saying. Even if one dislikes BJP, he must force opposition to stop abusing private sector.
We have already lost decades because of this anti-business mindset. We can't lose any more time. Next 2-2.5 decades will decide whether we, as a nation, realize our true potential or we stay a "could have been" story.