Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman. (AP Photo) Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman. (AP Photo)

As someone who has vivid memories of our bleak socialist decades, alarm bells start going off in my head when I see the smallest signs of socialism. They have been going off loudly since the Budget because a pall of despair has descended over Mumbai. It is as if businessmen, big and small, have given up all hope of India ever becoming a country in which they will be able to do business without some regulator, inspector or corrupt official breathing down their necks.

Things have been bad for a while. This is why, according to the Global Wealth Migration Review, 5,000 Indian millionaires fled the country last year. But, there was hope that with the massive mandate that Narendra Modi has just won he would come up with a Budget that would revive private investment. It has been dangerously stagnant for so long that the Economic Survey for 2018-19 said that reviving private investment was critical. The Finance Minister said she wanted ‘animal spirits’ to return, but how can this happen with corporate taxes going up to more than 40 per cent? When the Finance Minister says proudly that high taxes will affect less than 5,000 rich Indians, the signal she sends is that rich Indians deserve to be penalised.

She seems to have forgotten that it was this handful of rich Indians who transformed India from an economic backwater into a country that now dares to dream of becoming an economic superpower. It was this handful of rich Indians who created world-class airlines, hotels, hospitals, schools, airports and consumer goods. Remember for a minute what socialist India was like. Remember a time when the only domestic airline was so badly run that we used to joke about how Indian Airlines had more employees than passengers. Remember a time when Doordarshan was the only TV channel, when the only jobs available were in government offices, when airports looked like tin sheds, when hotels reeked of shabby service, when everything in India was second rate.

Having been part of the ‘Khan Market gang’ since my childhood, I remember well what it looked like in socialist times. It consisted of a handful of scruffy shops that sold such shoddy goods that ‘Made in India’ became a guarantee of poor quality. It was only after P V Narasimha Rao ended the licence raj that things began to change. Today Khan Market has shops that sell Indian goods of such high quality that my foreign friends come to India to shop. Personally, I cannot remember when I last felt the need to buy something that was not Made in India.

All this could change if the Prime Minister does not discover soon that ‘black money’ is not India’s biggest economic problem. This obsession with black money has brought back an inspector raj that is like a blight. Instead, what he should do is set up a task force in the Finance Ministry to investigate why black money exists in the first place. He might discover that it is one of the legacies of socialism. In socialist countries, taxes are usually so high and unreasonable that even salaried middle-class people are forced to evade them.

To return, though, to those 5,000 Indians that will now be paying crippling taxes, may I stress once more that it is because of them that some things in India changed from second-rate to world-class. It is they who create most of India’s wealth, and if they stop being able to do this, where will the Prime Minister find the money to finance the welfare schemes that persuaded voters to give him this huge mandate? Where will he find the money to make our cities look like real cities instead of slums? It is not his fault that they look so bad. It is not his fault that national highways collapse when the rains come. It is not his fault that socialism kept millions of Indians mired in hideous poverty for such a long time. What is his fault is that he has not done enough to change course.

In the speech he made in Varanasi after the Budget, he warned people not to be misinformed by those who went about spreading despair. I do not count myself among them, but cannot emphasise enough that the pall of despair I detect in Mumbai is real. Since the Budget, I have had conversations with a whole range of people, from small shopkeepers to big businessmen, and have not met a single person who said confidently that the future looks bright and hopeful. Most said that what worried them was that the Budget that the Finance Minister brought to Parliament in that bright red bag, oldfashioned, Indian-style, indicated to them a return to old-fashioned, Indian-style socialist policies. This is what set alarm bells ringing in my head.

This article first appeared in the print edition on July 27, 2019 under the title ‘Fifth column: Bad tidings from Mumbai’.

(Follow Tavleen Singh on Twitter @ tavleen_singh)

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