Kanika Datta: The good, the bad and the aam aadmi

Industrialisation is acquiring characteristics of crony capitalism in which states are perceived to be ganging up with businessmen

When he finally chose Sanand in Gujarat to relocate the mother plant for the revolutionary Nano small car from Singur in West Bengal, Ratan Tata made an uncharacteristically political statement. “I hope that there is a bad ‘M’ and a good ‘M’. We need that transition,” he said, making a veiled reference to Mamata Banerjee’s anti-Nano campaign that drove the car project to Narendra Modi’s Gujarat.

Juxtapose Tata’s statement against the results of the 2009 Lok Sabha elections and you get an idea of the inequality of purpose between India Inc and the aam aadmi. As the United Progressive Alliance (UPA) gets ready to start a second term in office, its real challenge lies in bridging this gap constructively.

Consider the results in Bengal, where Mamata Banerjee’s Trinamool Congress scuttled not one but two major industrial projects — a chemical hub in Nandigram and the Nano factory in Singur. Despite strong criticism against her in the media and corporate circles, West Bengal’s voters overwhelmingly preferred the Luddite “Bad M”.

From one seat (hers) in the 2004 Lok Sabha elections the Trinamool Congress won 19 seats in the 2009 election, making it the second-largest ally in the UPA. And Trinamool also wrested the Hooghly and Tamluk Lok Sabha seats (in which Singur and Nandigram fall respectively) from the incumbent Communist Party of India (Marxist) — the latter by a margin of over 100,000 votes.

In Gujarat, despite Modi’s undeniable efficiency and industrialisation drive, the state’s voters were ambivalent about the “Good M”. Buoyed by much approbation from India Inc — Tata’s endorsement being considered a coup — Modi’s team was expected to deliver all Gujarat’s 26 seats for the Bharatiya Janata Party (BJP) in the Lok Sabha. He managed to get 15, improving the 2004 tally by one, and the BJP’s vote share fell by nearly a percentage point. That’s not a failure by any means, but it certainly cannot be considered a thumping endorsement of Modi’s pro-industrialisation policies.

From the way the Congress has swung votes in Uttar Pradesh to the Dravida Munnetra Kazhagam’s surprise win in Tamil Nadu the messages to the politicians are clear. Being pro-aam aadmi works at the hustings — whether it is the DMK’s allure of free rice and TVs or the UPA’s expensive employment guarantee programme, farm loan waiver or hefty pay rise for government employees. This is where Congress President Sonia Gandhi’s instincts lie and the election results have proved an endorsement of her policies of the past five years.

But it is worth noting that — with the exception of the pay increase for government employees that provided a transient demand boost for consumer goods — none of these policies have been of the slightest use to India Inc. That’s because the things corporations need to deliver faster growth mostly appear inimical to the interests of the aam aadmi or are weighted in their favour — easier labour laws to hire and fire, large tracts of land for globally competitive industrial projects, efficient infrastructure delivery and better access to credit being some prominent issues.

The big question that politicians focused on election results rarely care to answer is whether populist policies will make Indians more prosperous. Post-independence India’s history, from the days of garibi hatao to 1991, when economic reforms began, shows that the link between poverty eradication and high subsidies has been tenuous at best.

Tata’s statement about making the transition is spot on. But, having won 206 seats in the current Lok Sabha, Sonia Gandhi may not want to admit that delivering “inclusive growth”, the term in vogue now, requires much more than instituting NREGA or distributing free rice. In fact, it means preparing India’s population for economic growth in terms of health, education, social security and access to opportunity — all the things that will help India Inc create a virtuous circle of growth. That is the essential lesson from Nandigram, Singur and all the other troubled projects from Posco’s mega-steel plant in Orissa to the special economic zone in Raigad, Maharashtra. Resistance from potential land-losers stems from the fact that these projects will deprive rural people — many of them poor and, therefore, disempowered — of their livelihood and security to create jobs for the middle class. All politicians understand the link between industrialisation and jobs, but few care to think through the consequences of these policies because addressing them is time-consuming and often requires hard work below the voter radar.

As a result, industrialisation in India is increasingly acquiring the characteristics of crony capitalism in which states are perceived to be ganging up with businessmen at the cost of the aam aadmi.

It is a stigma that is now, unfairly, attached to West Bengal’s most well-meaning politician, Chief Minister Buddhadeb Bhattacharjee. Had his party leveraged its three-decade rule in a more constructive manner and delivered on social and physical infrastructure, Bhattacharjee would not be in a position that makes the “Bad M” look good to Bengal’s voters.