Politicians, don’t bash the business class

There’s no doubting the resurgence in the fortunes of India’s political opposition following the better than expected performance in Gujarat and some hard-fought successes in recent by-elections. And now, there’s the relatively strong showing in Karnataka albeit more in terms of vote share than seats. It is a welcome development because democracy works best when a strong and decisive government in power is complemented, and held to account, by a strong and effective opposition.

At the same time it was disturbing to hear the Opposition parties, during their electoral campaign in Gujarat, taking pot shots at the business class, in a throw back of an earlier era.

It is understandable that an Opposition party will grab every opportunity that comes by to put the ruling party on the mat. But, when stretched to a point where allegations were levelled against prominent businesses without basis, it cannot but strike a discordant note.

Consider, for example, all the loud talk about undue favours given by the Gujarat government to Tata Motors for their car project. Ratan Tata was forced to move the Nano car project to Sanand in Gujarat under circumstances too well known to bear repetition. True, the State government had wooed them with many concessions but this is fairly standard practice with local governments across the world that seek to attract business and industry with an eye on long-term benefits for the local economy.

And so, in the decade since, leading automotive players like Suzuki, Ford, Honda and Hero Motocorp have all followed Tata Motors into Gujarat to set up their own manufacturing plants. Today, the Sanand area has emerged as India’s Detroit even as the original Nano failed to live up to expectations.

Key lessons for Congress

Having dominated India’s political landscape for so many decades, it is the Indian National Congress that is widely expected to lead the challenge to the ruling party in the coming elections. But, with the party’s strength in Parliament falling to a historic low in 2014, there’s much lost ground to recover. In the quest to bounce back from the lows, the party must dispassionately examine its record in power going back to Independence, and draw relevant lessons for the future.

The Congress has every right to be proud of the major pluses — such as nurturing post-Independent India into a vibrant and stable democracy with robust institutions to underpin it, break-through programmes in space exploration and atomic energy, or the setting up of world class institutions of higher learning, to name a few. But the party must also come to grips with the let-downs on the economic front. After all, 70 years after independence, India still continues to grapple with the most basic problems of poverty and low productivity.

Arguably, this was the outcome of economic policies rooted in a socialist world view that distrusted private enterprise and prioritised the distribution of wealth, side-lining its creation. The approach did much to hinder the rise of a dynamic, risk-taking entrepreneurial class, giving birth instead to a class of crony capitalists whose talent was the ability to worm their way into the corridors of power. So it is no surprise that India’s economy grew at mediocre rates for so many years after independence. That India’s economy perked up the moment we allowed free market forces greater play is also no secret.

Interestingly, the indifferent economic record of the Congress party’s early years in power did not hinder its electoral prospects as it went on to win the first five general elections consecutively.

In the initial decades after Independence, India’s masses were largely clueless about the outside world. Hardened to poverty over generations and without means to access information about the rest of the world, they would have judged the tepid pace of their economic progress against the benchmark of the past which, under the colonial dispensation, was bleaker still.

Times have changed and thanks to internet, smart-phones and cable TV, even the remotest corners are quite abreast of the world. People have begun to aspire for the better things in life because, for a change, they know what those things are. The upshot is that voters are less likely to settle for the incremental improvements that an earlier generation would have taken in stride. Henceforth, rulers will have to deliver in good measure for a decent shot at re-election.

Media’s responsibility

India’s lively and outspoken media prides itself as a watchdog of democracy and upholder of liberal values, often taking politicians head on. It is now time that a forward thinking media takes up the cudgels on behalf of India’s business class, and took to task politicians who would gratuitously belittle businessmen to score easy political points. At first sight, this may seem absurd. Why should the media defend the ‘fat cats’ of business?

Well, in this hyper-connected age, no party can hope to remain in power for long without delivering meaningful economic progress. And so, when a political party espousing ‘liberal’ values is unable to let go of obsolete notions about what makes the private sector tick, it undermines its own ability to deliver the economic outcomes that voters seek.

Regressive ideas seep into policy making as the talk ends up into walk. The economic record dims in comparison to that of a party deemed ‘not liberal’ but open to private enterprise.

To conclude, it is in the nature of democracy to present its people with a choice of competing visions about how the country should evolve. For instance, if one side is seen as pushing for cultural nationalism, the other side can legitimately bat for a multicultural ethos. But the bottom line applicable to all is, when you concede space to anti-business posturing, you will ultimately undermine your own cause.

The writer is MD & CEO of Manappuram Finance Ltd. Views are personal.

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