No matter what anybody says, there is no difference between the economic policies of the two political rivals — the Congress-led United Progressive Alliance (UPA) and the BJP-led National Democratic Alliance (NDA).
Both share the same objectives of achieving economic growth and prosperity for Indians by adopting almost identical policies: Both want private enterprise to play a growing role in building infrastructure such as energy, roads and transportation, or producing consumer goods, or providing services and utilities; both agree on making our tax rates uniform and simpler; both want more foreign investment in our industries and also want India to be a stronger player in the global economy. There is hardly any economic issue on which the two national alliances have any reason to quibble with each other.
Yet, as we close in on this year’s Lok Sabha elections, it is no secret that Big Business is almost unequivocally punting for the NDA’s prime ministerial candidate, Narendra Modi. Everyone — from the biggest and the most powerful to the more modest ones — has made no secret of their preference for Mr Modi and the alliance he leads.
Some have loudly proclaimed their faith in him at public forums, while others will tell you in private that they are firmly on his side. Why? Has Mr Modi promised lip-smacking giveaways that are making businessmen dizzy with anticipation? Or has he given them a sneak peek at a miracle strategy that he has up his sleeve that will lead the economy to a new high? No, he has done nothing of the sort.
Last Thursday, in Delhi, Mr Modi addressed three meetings — an economic conclave, a traders’ convention and another with finance professionals — where besides proclaiming his support for big retail, he said nothing that wasn’t platitudinous. In fact, none of what he said gave any indication of what the NDA’s economic blueprint was going to be. Then why does Big Business root for Modi?
The easy answer could be that under the UPA government, India’s economy has suffered: Its growth rate plunged from more than 9% to less than 5%; prices, especially of food, rose; and the value of the rupee plummeted, touching a low of Rs 68.85 to the US dollar. With a performance as poor as that, isn’t Mr Modi and the NDA a better alternative to back? No, because blaming the UPA for the economy’s travails wouldn’t be altogether fair. India’s current economic slowdown has a lot to do with how the world economy has performed.
For most of the past five years, Europe and the United States have been in a recession and this has affected the rest, India included. As for the rupee, its higher value (when it ruled at Rs 45 to the dollar in 2004) was largely because of big inflows of dollars into India when its economy was booming. The current fall of the rupee has more to do with fears of the US tapering down its own economic stimulus, which has seen funds from emerging markets flow back to a recovering US economy, rather than any policy lapse on the part of the UPA government.
It’s not for his economic policy that Big Business likes Mr Modi. It is not for what he will do as much as it is for what he will not do that business likes Mr Modi. Here’s the thing. In the past few years, Big Business has been put on the spot like never before. India’s mightiest business groups have been at the receiving end of investigations or enquiries either by the government, a proactive judiciary or investigative agencies.
A list of the companies that have been subjected to probes or court summons or government censure could read like the power-list of India’s business groups, including formidable names such as Tata, Reliance, Birla, Mittal, Jindal and so on. Some of those charges and investigations have come to naught; some are still underway; but the fact is Indian business has rarely experienced anything nearly as unpleasant as this. It is this that has made Big Business pin its hopes on Mr Modi. Not policies or concessions; but the hope that the nightmarish experience of being put on the spot would not be repeated.(A print version of this article appears in the Sunday edition of Hindustan Times)