For India to become an economic powerhouse and the world’s third largest economy, politics needs to speak to business, catalyse it, work as partners. By coming out strongly in this direction and meeting industrialists, Modi shows he is looking at a 21st century India, an India that respects its Vaishyas and impels others to dream big, to achieve scale, to deliver value.
It is a shame that the Prime Minister of the world’s sixth-largest economy, and one that will be the fifth largest by the next quarter, is forced to state that he “meets industrialists”. It is a shame that a country that so desperately needs wealth has so much political contempt for its wealth creators. It is a shame that the politics seeking ‘jobs’ for its constituents is the same that condemns those creating it. It is a shame that, as a nation, we have swallowed this outdated ideology and political claptrap, and rubbished the doers, the builders, the entrepreneurs who stand behind every job, every 1,000-point rise in the Sensex and every percentage point increase in our GDP.
This shame does not fall on the shoulders of Prime Minister Narendra Modi. By speaking to business persons, he is doing his dharma of engagement, just as he does when talking to farmers, bureaucrats, archaeologists, students, economists. It is what the UPA government did. It is what the next government will do. To a little extent, the shadow of this shame looms over those who have steered the recent economic discourse against business — Congress president Rahul Gandhi and Aam Aadmi Party (AAP) national convener and Delhi Chief Minister Arvind Kejriwal. The former encased the sentiment in a catchy phrase, “suit-boot ki Sarkar” (loosely translated as “government of the rich”); the latter in a relentless and shrill rhetoric, “sab chor hain, ji” (alluding loosely to Congress and BJP governments as “all are thieves” because they serve businesses, not people.
It is not their fault. The problem lies in carrying forward the momentum of history without questioning it. In my new book, 70 Policies that Shaped India: 1947 to 2017, Independence to $2.5 Trillion, I explore the laws, regulations and rules that have steered our economy over the past seven decades. The big story behind these laws: They have largely been enacted to curb and control the entrepreneurs of India. Sitting behind impenetrable symbols of imperialist dominance — the distance between the governors and the governed, the personal assistant to cushion the meet, the dizzying paraphernalia around the designation — the government only extended the British Raj into license raj and inspector raj.
A series of governments between 1947 and 1991 tried to make more efficient something that was intrinsically decaying. The Industrial Policy Resolution of 1956, for instance, turned entrepreneurs into thieves. Nationalisation — beginning with Air India (1953) and percolating to life insurance (1956), banks (1969 and 1980), coal (1971, 1972 and1973) and general insurance (1972) — took the ‘loot’ of industrialists and brought it to the people. All the while, relegating industrialists to the status of rabid dogs. The political rhetoric and force of the government ensured that this ideology seeped deep into the consciousness of the nation. And when a country begins to look at the creators of its jobs and wealth with contempt, it condemns its own future.
The balance of payments crisis of 1991 was one big outcome. But behind it was a series of policies, laws and rules that tied down Vaishyas, the business community. The Factories Act of 1948, for instance, takes it to ridiculous levels and demands that in every factory a sufficient number of spittoons be provided in convenient places, to be decided by State governments (Chapter III, Section 20). While this can be looked at as a tool to create swachh factories, hardcoding it into a law means a contravention of industries like food and pharmaceuticals that need a completely sanitised environment. Isn’t cleanliness more of a business requirement than that of the State? This law extended the Factories Act of 1881, enacted by the British government to fight the “menace of competition from Indian mills”, according to Raja Kulkarni.
Or take the Minimum Wages Act of 1948. Nobody can argue against workers having a minimum wage. The aspiration for a minimum wage comes from the Constitution. Article 43 of Part IV of Directive Principles of State Policy states that the state shall endeavour to provide a living wage for workers, ensure a decent standard of life and full enjoyment of leisure. The law follows the constitutional brief. Being a State subject, the implementation is left to the States. And so, at a stretch, there should be 29 minimum wages across the 29 States and add another seven for the union territories. But the number of minimum wages across India stands at, hold your breath, more than 1,200, as Biju Varkkey and Rupa Korde analyse in their paper, Minimum Wage Comparison: Asian Countries: Official Representation of Minimum Wages. Several of these numbers are the same. The question is: why have them in the first place?
If you think this was the state pre-liberalisation, think again. Although business persons have been excluded from the political discourse since Independence, when India chose the socialist path to poverty, the attitude changed superficially in the first two decades of liberalisation. Corporate leaders were seen going to meet the Prime Minister at least twice a year at the Prime Minister’s Office. That changed in the run up to the 2014 elections, when politics dragged the country to the past. Crony capitalism became a political issue, using which, BJP and AAP ousted the Congress at the Centre and in Delhi. Crushed between politics and the media, businesses got labelled as the new evil. Of course, there were some bad apples in business, just as there are in politics, bureaucracy, media. But typecasting an entire community that creates jobs, builds wealth, delivers GDP growth was the unfortunate repercussion. It was not just crony capitalism that was turned bad — all capitalism was.
In the complex world of today, it is ideologically silly and practically dangerous to devise policies without consulting or hearing the constituents — and that includes the business class. Otherwise, our laws will continue to be designed by copy-pastes from developed nations that, for instance, have the money to support entitlements. Or, they will be cobbled together by whims hiding behind ‘best practices’ or noble intentions. Neither will work. For an India to become an economic powerhouse and the world’s third largest economy, politics needs to speak to business, catalyse it, work as partners.
By coming out strongly in this direction and meeting industrialists, Modi shows he is looking at a 21st century India, an India that respects its Vaishyas and impels others to dream big, to achieve scale, do deliver value. It is the realisation that wealth creation is a virtue, not a crime. This is indeed the missing narrative in India’s journey to becoming a $10 trillion economy.
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Last Updated 1, Aug 2018, 7:33 PM