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Opinion | The demonising of corporates, industry must end

Author: Abhinav Prakash Singh
Publication: Money Control
Date: October 31, 2018
URL:      https://www.moneycontrol.com/news/business/opinion-the-demonising-of-corporates-industry-must-end-3112241.html/amp?__twitter_impression=true

Addressing IT professionals at a recent town hall, Prime Minister Narendra Modi said that he doesn't believe in the culture of criticising corporates and industries. This is a bold statement to make in a country with deeply entrenched socialist biases since Independence. And that Modi has said it twice in a span of a few months assumes significance. In July too he said in Lucknow that he is not afraid of being seen with industrialists. This is a deliberate attempt aimed at reshaping the political culture of India where empty pro-poor socialist rhetoric dominates the public discourse.

Contrary to the colonial stereotypes internalised by Indians and even the nationalist movement, India has always been an entrepreneurial civilisation with sprawling urban centres and dynamic trade and manufacturing linkages across the world since millennia. India has a long history of nurturing the entrepreneurial and industrial zeal which made it one of the most prosperous regions in the world up until the 1750s.

Even under the oppressive colonial rule, Indian industrialists did something unique, they spread across the British empire and set up their industrial and commercial enterprises and thus directly challenged the European dominance over the economy. Within India, the world's first steel mill outside of Japan and the West was set up by the Jamshedji Nusserwanji Tata. The Dalmias built sugar, cement, textile, paper industries. Walchand Hirachand established shipping, engineering industries. Scindia Steam Navigation Company shipyard (now Hindustan Shipyard Ltd) at Visakhapatnam revived the once formidable Indian shipbuilding industry. GD Birla started Hindustan Motors, Walchand floated Premier Automobiles, and the Tatas conquered the skied with Air India. All of this was done under the colonial government, which left no stones unturned to stop the growth of Indian industry. Also, do we need to remember that the Indian freedom struggle was also funded by these industrial houses?

On the eve of Independence, India had one of the most sophisticated and developed industrial bases outside of the western world and Japan. However, instead of building on this base, the new commissars in the government and the planning commission set out to hound businessmen and industrialists. Private companies and industrialists were branded as public enemy number one. They were supposed to be responsible for the poverty and misery of the masses.

Subsequently, the aim of government policies was not to promote businesses but to stifle their growth under the infamous license-permit raj. Industrialists were demonised, profit was turned into a dirty word and the word “Baniya” was turned into an abuse by campus-communists and radical socialist demagogues.

Politicians were expected to maintain an arms-length distance from industrialists and to demonstrate their purity of socialist faith by launching periodic crusades against them. The colonial policy of suppression of Indian businesses continued unabated in independent India.

All this tilted the scales against businesses which were left with no option but to actively court politicians and officials to escape impossible rules and taxation. This undermined institutions and gave rise to crony capitalism and landed us into the present day mess of corruption, politician-businessmen-bureaucrat nexus and burgeoning NPA problem.

Even in the post-reform era, no one actually tried to seriously challenge this nexus till Modi started insisting that be it big corporates or small businessmen, they must start playing by the rules. Deep structural reforms such as the Goods and Service Tax (GST), simplification of laws, the Insolvency and Bankruptcy Code law, etc. have started to reshape the contours of the economy.

It is noteworthy that as prime minister, the first-ever business conference Modi attend was of the Dalit Indian Chamber of Commerce and Industry in 2015. It seems that the current BJP-led NDA government is not afraid of the socialist jibe of the “suit-boot ki sarkar” and rightly so. After all, BR Ambedkar too always wore ‘suit-boot' to emphasise his vision of a modern industrial society.

- (Abhinav Prakash Singh is assistant professor, Shri Ram College of Commerce, University of Delhi, Delhi. Views are personal)
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