Prabhu Chawla By

Since India Inc seems to be turning into a vociferous foe of PM Narendra Modi, he doesn’t need friends and followers anymore. The masses will rally behind him to fight avaricious tycoons and their loquacious megaphones. For the past few weeks, a whispering campaign has been launched against the Modi government for its supposed failure to deliver on promises. In South Mumbai and Lutyens’ Delhi, the me-and-myself types are gathering in well-appointed drawing rooms or clubs of five-star hotels to grouch about Modi’s excessively centralised establishment. After schmoozing with ministers and party officials for over six months, the pinstriped class has realised that the PM cares little about the coalition of the rich and famous, whose only aim is to get policy tailored as per their interests. If the tone and tenor of corporate discourse is any indication, Modi has to arm himself with instruments to counter the crusade soon to be launched by a section of the business world.

For him, there could be no better news than this. Historically, politicians who are favoured by forums like CII, FICCI etc. have never won the popular mandate the second time. What has surprised the PMO is India Inc’s inability to respond to the positive initiatives taken by the government. If manufacturing has hit a new low, it is not because of government inaction but due to the failure of Indian industry to start new ventures or complete the ones begun ages ago.

If press reports are to be trusted, vocal, well-connected, media-savvy corporate leaders feel Modi’s personal charisma is on the wane because he hasn’t come through on economic reforms. Their idea of reform is low interest rates, cheap land for new business ventures, less import duties and liberal concessions on personal and corporate tax. They believe good economics means a government of them, by them and for them. After interactions with the new establishment, they realise Modi may like to be seen rubbing shoulders with oligarchs, celebrities and the chatterati, but when it comes to economics, he is more of a Left-of-Centre leader than a blind promoter of free (for all) market. He has been pushing an indigenous agenda for governance. His slogan ‘Make in India’ has ruffled many feathers as it prevents foreigners from converting the country into a market and not a manufacturing hub. His decision to allow FDI in defence and realty sector is aimed at encouraging MNCs to create productive assets in India. He has introduced a few labour reforms, but is unwilling to give unfettered powers to employers to adopt whimsical hire and fire policies. The PM expects industry to move towards a Digital India, but by creating more jobs. For the past four decades, while investment in industry has risen enormously, the job opportunities created have been minimal, leading to increased unemployment. Even economic growth is skewed. Currently, 65 per cent of India’s GDP comes from the urban population while 65 per cent of Indians live in villages. Indian industry has failed to provide enough employment channels for rural youth.

The PMO is much peeved over the lobbying by business tycoons to change the Land Acquisition Act in a manner that would allow pliable state governments to hand over land to corporations at bargain basement rates. It is not a coincidence that a few ‘liberal’ ministers who have little to do with the Land Bill have advocated diluting its provisions. But both the PM and minister concerned have chosen to keep mum because they feel the Act has enough clauses enabling land acquisition for public utilities and not for mere corporate promotion. Over raising FDI cap in insurance, Modi has adopted an arm’s length distance. Since the bill is being touted as a major economic reform, Modi has let his ministers bargain with other parties to bring the matter to its logical conclusion, even at the cost of diluting the intent of the original draft. In education too, his ministers other than Smriti Irani spoke about reforms, but Modi let his minister carry forward her agenda of Indianising education.

NaMo isn’t impressed with the 35 per cent spurt in Sensex during the past six months, which he feels is just hot money meant to promote certain shares instead of benefiting the economy. In fact, there seems to be a conflict between Modi’s economic model and the wish list of entrepreneurs. Modi is in favour of demand-led growth, while industry is pushing for supply side economics. It desires capacity expansion so that companies can borrow liberally from public sector banks, import more by over-invoicing and provide high-cost final products for maximum profit. It is surprising that excessive supply hasn’t led to drop in prices. Inflation has eased mostly because of the fall in prices of consumer items. Real estate has collapsed not because flats are being sold at lower prices, but due to the reluctance of consumers to pay. There is no indication of decline in the FMCG and automobile sectors. The PM wishes to propel policies that will put more money in the hands of the consumer for both spending and saving.

Modi abhors excessive control on business and has spoken out against coercive retrospective taxation. His government’s decision to not appeal the high court’s verdict in the Vodafone retro-tax case reflects the PM’s will to provide a level-playing field to MNCs. But Indian industry has a ‘dil’ which always ‘maange more’. Modi is unlikely to offer any elixir to quench their thirst. He doesn’t mind meeting honchos from abroad and conveying his concept of good economics. After all, he is the only PM, who had earlier as a CM proved to the world that good politics leads to good economics. Modi’s Gujarat Model was based on the welfare state principle. He chose the social sector, women’s empowerment, education and an efficient bureaucracy to expedite decision-making.

There is a feeling in certain quarters of the power circle that industry is mounting pressure on the government to tweak the next budget in their favour. But the PM is determined to unfold his own economic roadmap, which will force big business to turn ‘Make in India’ into the fulcrum of his dream to create a New India. Behind his chic look hides an undiluted and uncompromising Swayamsewak as Swadeshi Modi. His demeanour and the sheer authority of his personality is enough to stymie the most articulate honchos who graduated summa cum laude from Harvard, Wharton and Oxford. They could browbeat Manmohan Singh. But the Right-wing Leftist Modi is determined to make both Marx and markets irrelevant in creating a Modiscape of empowered India.

Prabhuchawla@newindianexpress.com

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