Senior industry leader Rahul Bajaj has posed an important question for the Narendra Modi government. Why is industry afraid of speaking out on the government’s economic policies? Why is there an atmosphere of fear under the Modi regime, so much so that industry leaders are reluctant to make critical comments about the government? In comparison, the same industry was not afraid of asking questions about government policies when Manmohan Singh was the prime minister, Bajaj noted.
The Modi government has taken the observations made by Bajaj quite seriously. Home Minister Amit Shah responded by saying there is no reason for industry to believe there is an atmosphere of fear. But since such comments have been made, the government would examine them to see what improvements can be brought about.
There have been other responses as well from senior Union ministers. Finance Minister Nirmala Sitharaman said it was always better to seek an answer to one’s question, and that approach was always better than spreading one’s impressions, which could hurt national interest. Railways and Commerce Minister Piyush Goyal said there was no need to fear. The fact that such a question could be raised showed that there was no atmosphere of fear, he said. Housing, Urban Affairs and Civil Aviation Minister Hardeep Singh Puri suggested that statements such as those made by Bajaj were fake narratives.
It is important to examine the context and implications of what Bajaj said in Mumbai last week, in the presence of a galaxy of Indian industry leaders and senior ministers seated on the dais, where he spoke his mind. Note that the octogenarian industrialist prefaced his critical comments by saying that the Modi government was doing some good work. But what hurt him was that industry leaders were not sure if their critical comments about the government would be appreciated and received in the right spirit.
This is a slightly different narrative from the general criticism of the manner in which the Modi government has handled the challenges faced by the Indian economy. Bajaj’s comment was not on the way the Modi government was dealing with the challenges that have arisen out of the current slowdown. He was a founder member of the Bombay Club that, in the early 1990s, had demanded a level playing field for domestic industry to help it face the challenges from the opening up of the Indian economy. Today, Bajaj could not have been uncomfortable with the Modi government raising tariffs or even pulling out of the Regional Comprehensive Economic Partnership, which would become the world’s largest trading arrangement.
Also read: If BJP leaders could speak like Rahul Bajaj, this is what they would tell Modi & Amit Shah
Thus, the criticism was not for the Modi government’s economic policy stance, but for the manner in which it had shut itself off from any feedback from industry, which was now afraid to make any critical comments. Biocon Chairperson and Managing Director Kiran Mazumdar Shaw endorsed Bajaj’s observations and hoped that the government would now reach out to India Inc. to discuss how economic growth could be revived. So far, industry leaders were all pariahs and the government did not want to hear any criticism of the economy, Shaw said in a social media comment.
What Bajaj, therefore, was actually pleading for was that the Modi government must revive the communication links between India Inc. leaders and the ruling political establishment. He seemed to be articulating the desire of India Inc. leaders that the terms of engagement between industry and the Modi government must be reset. Those terms had been reoriented early in the life of the first term of the Modi government. Indian industry had hailed the Bharatiya Janata Party (BJP) government because it believed that its leader, Narendra Modi, would usher in more economic reforms.
True to such expectations, Modi did try hard to amend the land acquisition law, but eventually gave up after recognising the growing political resistance to that idea. In the remaining years of that government, Modi did introduce many reforms like the launch of the goods and services tax, real estate regulation and a legal framework for insolvency and bankruptcy resolution. Even in its second term, the Modi government has taken a few bold measures like the cut in the corporation tax rates and a roll-out of an ambitious privatisation programme.
But it was becoming clear that the Modi government would not like to be seen to have come close to the Indian industry. To be seen as very close to India Inc. seems to carry a political risk that can create hurdles for the BJP in acquiring more political capital and gaining electoral mileage. In such a situation, Bajaj’s criticism that Indian industry leaders are afraid to criticise the government actually helps strengthen the BJP’s political image of not being close to India Inc. Even after returning to power after the general elections of 2019 with a greater majority in the Lok Sabha, the BJP leadership continues to be obsessed with the idea of increasing its political capital and political footprint in the country.
That is largely because the BJP’s performance in the assembly elections in Maharashtra and Haryana was a setback. It needs to bounce back with victories in the forthcoming round of assembly elections. To be seen as a government that has no cosy relationship with Indian industry leaders, who as a result are afraid of speaking out against government policies, can politically help the BJP in the coming round of assembly elections. Bajaj’s comments have only helped bolster that image.
The fact is that a close relationship between India Inc. and the government cannot help the BJP win elections. On the contrary, an India Inc. that is comfortable with the BJP government and has a special or friendly relationship with it can have an adverse impact on the party’s political fortunes. While opposition political parties may feel good about Bajaj criticising the Modi regime, the BJP should actually be seeing the indictment as a political boon.
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Thank god all freebooters, pirates, buccaneers, leeches, vultures — DALALS in ordinary language have been banished from the ministries and corridors of power.
All are sulking along witb their Congress patrons.
Its just that after many years of observations and experiences Mr. Rahul Bajaj finally broke the iceberg and spoke against the Govt. I feel PM is still leaving in a world of illusions and feels every sector is like a coral reef easily to tackle, Just a flaw we all know now. His superficially articulated and memorized words means nothing but a comic story where the Hero takes a lead finally to kill the evil for a happy ending. The Demonetization and GST implementation will always be remembered in coming decades like a nuclear strike which created a huge wave of worries to every person who lost his means of survival. Revivals of all policies set up by Manmohan Singh has further added more trouble to the people still under the impression of old losses due to Demo-GST menace. Falsely placing economic figures via the set media happens to be a knife on the back, still no direct confrontation was witness between the masses and the Govt who felt time should be given for setting things right. The lucrative unorganized market was too targeted and liquidity chased on all fronts of accountability with a fearing businessman searching to survive. Still unable to accept the truth, the Govt is pursuing its strategies as Mr. Modi after visiting western countries feel he can turn the page of the book and change the scene., So easily he thinks to change every traditional system and values that prevailed in our country prior to its independence. Few are able to receive the big share of the cake like Adani and Ambani’s who enjoy the 100% policy favour’s of the Govt. Now its the telecom sector to be hit hard. 32crores customers with 40% enhanced tariffs with little option to migrate, Birla wants a relief package before the dust comes for Voda-Idea. Oil sector is already making Billions of profits. Mr. Bajaj is witness to all this and might feel betrayed as to why the loot comes via an authorized channel set by the Govt. against the ordinary citizen who even has been deprived of puting his arguments against the wrong policies of the state. Much more can be talked and read but I feels this is not going to solve any problem until the the next election, if it happen via ballot instead of EVM’s.
Whole world know Reliance, Adani group exponential growth & cronyism behind this. People are not fools
Whole world know Reliance, Adani group exponential growth & cronyism behind this. People are not fools
If one takes the central thesis of this column further, there should be no government presence in Davos. No Investor Summits. Or Chief Ministers taking delegations to the First world, importuning investment. Making the economy hum like a Rolls Royce engine is the government’s job. Why should five years be spent only on planning for and winning elections.
If BJP had seen Rahul Bajaj words as boon, then it’s IT Cell wouldn’t have tried to run down Rahul Bajal after comments.
Not sure, at a time when the economy looks like it has been hit by a meteorite, Indians regard being anti business as a virtue for the government of the day. Nor does one believe the fairy tale that the poor welcomed Demonetisation because they saw the rich being hurt. Optics and management of perceptions / headlines can take a government only so far. If Haryana and Maharashtra did not come up to expectations, part of the reason is that their large automobile industries were visibly bleeding. Apart from agrarian distress and an uptick of rural poverty.
The point is the government is supporting some sections of the corporate world such as ambani and adani etc.you failed to look at that angle.
Modi government is supporting all industrialists. Cut in corporate income tax was for all businesses. It looks pro Congress industrialists are feeling guilty and shying away from interacting with the government.
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