Economy

When Rahul Bajaj broke the silence of India Inc on economy

PTI New Delhi | Updated on December 24, 2019 Published on December 24, 2019

Several industry veterans join in to raise their concerns

Whenever the economy goes into a downward spiral, policies aligned with growth ambitions are a far cry and the industry suffers, vocal leaders of India Inc are usually the first ones to raise the red flag. But not against the BJP-led government in 2019, except a few.

Those who stood out were the likes of Rahul Bajaj, Kiran Mazumdar-Shaw and Ajay Piramal for their words in an otherwise seemingly insulated, blissful world of their fellow corporate leaders even when India’s rapidly slowing GDP growth touched a six-year low at 4.5 per cent in the second quarter as manufacturing output slumped and consumer demand as well as private investment weakened.

Falling sales

In visible signs of economic woes, the auto sector went through one of the longest sales slumps leading to nearly 3.5 lakh job losses. In the FMCG sector, concerns persisted that consumers were thinking twice even before buying a ₹5-pack. The telecom segment continued to be under the pump, so was the stressed power sector.

Adding to the problems, non-performing assets plagued banks while two major non-banking financial companies — IL&FS and DHFL — crashed. Still, the leading lights from India’s corporate world could not hold up the mirror to the government.

For once, it was the “silent Prime Minister” — Manmohan Singh, now a vocal Opposition member — who did the talking on behalf those who blamed him for ‘policy paralysis’ and criticised him while he was at the helm for being weak, indecisive and silent. Writing on The Hindu newspaper on November 18, Singh wrote that there was “a palpable climate of fear in our society today”.

“Many industrialists tell me that they live in fear of harassment by government authorities. Bankers are reluctant to make new loans, for fear of retribution. Entrepreneurs are hesitant to put up fresh projects, for fear of failure attributed to ulterior motives. Technology start-ups, an important new engine of economic growth and jobs, seem to live under a shadow of constant surveillance and deep suspicion,” he wrote. Not long after, at an event organised by the national daily in Mumbai on November 30, where Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, and Commerce Minister Piyush Goyal were present, industrialist Rahul Bajaj spoke about the government’s stifling of criticism, among other things.

This environment of fear, it’s definitely on our minds. You (the government) are doing good work; and despite that, we don’t have the confidence that you’ll appreciate criticism, the veteran industrialist said.

Bajaj found support from Biocon CMD Kiran Mazumdar-Shaw who hoped that the government would reach out to India Inc for working out solutions to revive consumption and growth.

Replying to Sitharaman’s response to Bajaj, Shaw retorted, “Madam we are neither anti-national nor anti-government”.

Different views

RP-Sanjiv Goenka Group Chairman Sanjiv Goenka, however, disagreed with Bajaj’s views and asserted that there was no fear among industrialists.

Speaking at the India Today Conclave East 2019, Goenka lauded the Narendra Modi-led government for taking up steps to reach out to the common man and bring structural changes. “For the first time in several years, I see the will and the determination to do a structural change. In the past, it was pretty much the way it was. For the first time, I see changes at different levels,” Goenka said.

To be fair to Piramal Group Chairman Ajay Piramal, it was he who first mustered up the courage to tell the government in September that all was not well in the relationship between the industry and the ruling dispensation, and that mistrust between government and businesses was growing due to frequent raids, searches and lookout notices by various agencies on corporates. “Today, I see there is a gap, there is mistrust between the people who are in power and the people who are wealth-creators,” he said.

A little before him, L&T non-executive Chairman AM Naik had raised a faint voice while speaking on the sidelines of the company’s AGM in August, hinting to challenging times faced by private sector to make investments.

In 2020, the industry will hope to have more freedom to perform and raise concerns to the government without fear.

Published on December 24, 2019
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