The Prime Minister while speaking at the launch of various development projects in Lucknow on Sunday, made a noteworthy comment that should have been uttered by yester prime ministers long ago. He essentially claimed to be a politician not afraid of standing beside industrialists. He also asserted that they have an equal share in the growth and development of the country as compared to any farmer or a banker. A statement that is apparent and incontestable. Yet, it took about six decades for a prime minister to be able to make it albeit with still pending repercussions of opposition hoping to twist it.
This is because unfortunately for us, our nation developed with a misguided perception of ‘Original Sin’ for industrialists. The government convinced itself and then its people, to view industrialists with suspicion. It convinced the people to consider their profits as fruits of corruption, their wealth a result of colluded loot and their properties, an organised land-grab. Thereafter, in the garb of this manufactured perception, it became imperative to control this greedy capitalist class. In effect, the economy was burdened with price controls, quotas, licenses, permits, ceilings and restrictions. All this was done to ensure that the rich don’t get any richer and the poor gets his fair share of resources.
However, merely harbouring good intentions don’t culminate in better outcomes. The net result of this governmental strangulation of the market was that the people who had the means, ability and resources to wade through these restrictions were able to sail through. In return, they left a grotesque machinery, a kind of parallel economy, where the writ of bribes, kickbacks and payoffs ran large. It did put a strain on their business but not on their wealth. It ensured that no new person gets to be a part of this club with governmentally granted exclusivity. Occasionally, an Ambani managed to trick the system but for the most parts it was rigidly restricted and rejected any aspirants with good ideas.
This nation’s tallest industrialist bears a testimony to this; J.D.R Tata continuously and painstakingly tried to convince Pandit Nehru and Indira Gandhi to mend their economic follies but was throughout told to zip it. He was thoroughly rewarded for his pieces of advice by having his Air India, Air India International and insurance outfit nationalised by the government. Meanwhile, we lost valuable time and essentially went backwards. Taking the example of Tata again, it used to manufacture armoured vehicles before independence but thereafter defence was taken out of the private sector’s domain. The result is India is still one of the largest importers of defence hardware in the world and yet struggles to adequately equip the armed forces. The tendency to distrust, demonize and defame the industrial class has cost us decades of development.
The previous UPA government relapsed in this self-perpetuated tendency with the horror of retrospective taxation. There are visible signs of UPA submitting to it again with no reasonable economic thought ever being put forward by the Gandhi Scion. It is, therefore, refreshing to have a politician speaking for industrialist and not casting the habitual suspicion as with mindless ‘Suit-boot’ jibes. This aggressive defence of the industrial class could guide India’s economic destiny for the coming years.