In a boring pictures contest, the photos of industrialists arriving to meet Finance Minister Pranab Mukherjee on Monday would have been rivalled only by those of Prime Minister’s Economic Advisory Council (EAC) releasing, on the same day, its report on the economic outlook for 2011-12. But the latter event was far less a cause of concern than the former.
True, the EAC’s admonitory report telling the government to get on with the business of governance and offering a scaled-back forecast for economic growth was hardly cause for cheer.
In contrast, the gathering of what the media is wont to call “the captains of industry” was much more upbeat. Mr Mukherjee and Commerce and Industry Minister Anand Sharma promised to address their problems and everyone came away happy — or so they said.
But as the “captains” delivered their bytes – or platitudes as the case may be – it was difficult to not feel sceptical. For one, there’s a faint hint of cronyism to this grouping. Whenever industry leaders are called upon to meet the government, it’s roughly the same set of people who appear. Had Kumar Mangalam Birla and Mukesh Ambani been present – both invitees who did not attend the Monday meeting – the Usual Suspects group would have been complete.
Each of these industrialists has been tasked with sending, within four weeks, five proposals that are most important for their sectors to help the government make policy. Now, at least four of Monday’s invitees are already on the Prime Minister’s Council on Trade and Industry – Ratan Tata, Mukesh Ambani, Kumar Mangalam Birla and N R Narayana Murthy. Each of them heads a Task Force that is expected to make recommendations on improving the sector.
These Task Forces deal with six Special Subject Groups covering a fairly comprehensive list (examples: infrastructure, knowledge-based industries, food & agro industries and so on). Pranab Mukherjee and Anand Sharma attend those meets as well. It is difficult to understand why they organised yet another meeting and requested even more recommendations. Surely this is a pointless overlap when there is so much work to be done — as the EAC pointed out so bluntly? It is difficult to escape the notion that Monday’s meet was more a ruse to show that, far from being in stasis, the government is on the job.
The ministers and officials who organise these things are bound to argue that these “captains” are automatic choices by virtue of their size, market shares and the range of industries in which they are involved. This is valid, of course. The Tata, Birla, Ambani and Mahindra groups alone would cover pretty much everything from services to manufacturing and their companies mostly dominate these industries. But can they really speak for all of the companies in their sector? Their perspective must be vastly different from a medium or small firm or even a newcomer in the business.
More From This Section
In this context, the fact that G M Rao and G V K Reddy were also invited is telling. They certainly deserve to be there by virtue of the airport and other infrastructure projects they build in partnership with the government. But the point is that neither is a very large corporate entity. In terms of net sales in Business Standard’s latest BS 1,000 ranking GMR Industries comes in at 114 and GVK at 257. There are many respected people heading companies larger than both that North Block could also have invited on Monday — Kishore Biyani of Pantaloon Retail (rank 61), Dilip Shanghvi of Sun Pharma (131), B N Kalyani of Bharat Forge (160) to name some alternatives at random. As businessmen who grew in the post-reforms era, they may have been better bets than Y C Deveshwar, R P Goenka or Venu Srinivasan, all of whom have been regular invitees.
Even assuming the Usual Suspects are deeply altruistic, they also head competitive entities and are eager to grow. Their five proposals, therefore, can be expected to be as opportunistic as possible. Nothing wrong with that, except that it would have been better to route such proposals via industry lobbies where others would have had a say than through individual industrialists.
Mr Narayana Murthy described the meeting as being “almost like the spirit of 1991”. That in itself was a depressing statement. Nineteen ninety one was 20 years ago and India was in crisis. The economic environment has changed fairly radically since then and so has the “spirit” of industry.
Still, Mr Narayana Murthy was one of the few whose presence at the Monday meeting was difficult to refute. Although he stopped actively running Infosys ages ago, he remains a “new-age” industrialist in pioneering the industry that has done much to establish India’s reputation on the global stage. That would apply to Sunil Mittal as well.
But the clubby exclusivity of the whole exercise was unconsciously expressed by Anand Mahindra, who said, “If there was a trust deficit it was dispelled.” For whom?