On Friday, at the annual meeting of a chamber of commerce in New Delhi, Finance Minister Pranab Mukherjee spoke sharply of what he implied was Indian industry’s unhelpful attitude. Complaining about government inaction was getting to be too much, he said: “If we have problems, it is for us to solve them. Merely reiterating the distressed condition is not going to help us.” This came a day after Prime Minister Manmohan Singh said that “negative comments” from corporate India “added to the uncertainty and emboldened those who have no stake in our economic growth”. It is true that India Inc, normally quiescent in the face of misgovernance, has spoken out more boldly of late. A group of prominent people from the business world, including Deepak Parekh, Jamshyd Godrej, Azim Premji and Keshub Mahindra, wrote to the government in January and October this year. “We feel there is no movement in the key reforms,” they said in the second letter. Mr Premji later castigated the government for a “complete absence” of decision-making. As citizens, and as individuals in a position to understand the effects of slowing reform on economic growth, they have a right to let their opinions be known — and the government should think of the feedback as useful. Yet UPA-II, unwilling to ensure investment-friendly conditions, seems to think that such reminders are dangerous, instead of heeding the warnings they are receiving.
Both the prime minister and the finance minister blamed the composition of the coalition they lead for their problems. “In the era of coalition politics,” said Dr Singh, “it often becomes necessary for the government to build broad consensus on major policy issues. This may sometimes take longer than you like.” It is true that the government has not yet been able to introduce the Pensions Bill, and the Companies Bill, though introduced, is on the back burner. Also, foreign direct investment in multi-brand retail has been postponed. Yet all these failures can be attributed not just to the Congress party’s numbers in Parliament and to the obstructionism of the Opposition, but also to the ruling party’s inability or unwillingness to make a political case for reform. It is willing to invest political capital in other measures like the Lok Pal Bill, which will do little to curb corruption, or the Food Security Bill, which will destroy state finances — but not in those laws that will kick-start economic recovery.
UPA-II wants to ignore the message that its politics is no longer reform-friendly — and so it is shooting the messenger, corporate India. It is worrying that, more and more, it looks like this government is nostalgic for the 1970s. For an India with a state that spoke to industry only to reprove it, where those from corporate India kept silent about policy for fear of antagonising an unfriendly state, where populist measure after populist measure was heralded while growth declined and inflation rocketed. The government needs to introspect, and reverse course. Rather than attack those speaking out, UPA-II should use their discontent to bolster their case that more reform is needed, if growth and poverty reduction are not to stop entirely.
