Without fear or favour

The exchange between Rahul Bajaj and Amit Shah is of great value to the country

The star performer at a recent ET Awards function was Rahul Bajaj. Speaking to an audience of India’s leading industrialists with three ministers (home, finance, and commerce and industry) on the stage, he said people had the freedom to critique the United Progressive Alliance (UPA) government but that the current regime has created an environment of fear and uncertainty.  “During UPA-II, we could abuse anyone. You are doing good work, but if we want to openly criticise you, there is no confidence you will appreciate that. I may be wrong but everyone feels that”.  Home Minister Amit Shah responded by saying: “About fear I can say that nobody needs to be afraid…. But still, you are saying that an atmosphere [of alleged intolerance] has been created and we too will have to work to improve that. But I want to reiterate that nobody needs to be afraid.”
 
This exchange — a powerful and courageous statement from Mr Bajaj responded to positively and openly by Mr Shah — is of great value: It opens space for discussion and debate.  Three propositions to trigger discussion and debate on this first day of the New Year:
 
Our key priority is the economy:  Many of us view with dismay the events unfolding since the passage of the Citizenship Amendment Act (CAA).  Our key concern should be that the CAA and the protests it has prompted are diverting us from what must be paramount: Our moribund economy.  
 
“Moribund” is a strong word: The dictionary defines it as “in terminal decline; lacking vitality and vigour”.  The only debate is over how fast the decline is. Official government figures say our growth rate has fallen consistently to 4.5 per cent now.  The former chief economic advisor, Arvind Subramanian, says all real indicators point to even slower growth — the lowest in 29 years. Our consumer goods firms report major stress in rural demand — growing, for the first time in decades, at a lower rate than urban demand.  Employment is stressed, with unemployment at a 45-year high. The construction sector, which accounted for much of our recent employment growth, has been losing jobs. Exports have stagnated for six years. Both domestic output and imports of capital goods have dropped by over 10 per cent this year, reflecting falling investment. Electricity output is flat for the first time in decades.  All this demands attention without diversion by any alphabet — CAB, CAA, NRC or NPR.  Future generations will not forgive us if we neglect our single collective priority.  A public acknowledgement of the deep challenges the economy faces would enable the government to use its considerable political capital to drive the necessary changes we need.  I have written separately of how the government could use the Budget to kick-start the economy (Business Standard, December 19, 2019).  Massive public investment in construction — in rural roads, water infrastructure, highways, low-income housing, ports — would do more to revive the economy than any tax cut or attempt to stimulate consumption. 
 
Debate and independent institutions are to India what strong government and state leadership is to China:  On almost any Confederation of Indian Industry mission to the US, we hear an India-China comparison.  The complaint is typically about contradictory policies being pursued by the Centre and states (the Centre plans the NPR, some states say they won’t implement it), or a reversal of policy by a new government (Amravati, the Bullet train), or outlandish or shameful words used by a politician (termites, chowkidar chor hai, pappu, tukde tukde gang).  The contrast is always China — where no one contradicts anyone, the provinces (at least officially) toe Beijing’s line, and policy is consistent to the point of boredom.  My response is that the US should not expect India to be like China, but expect it to be like, well, the US.  The present administration in Washington takes the US out of the Paris Accord on Climate Change — and California passes a resolution saying it will pursue it.  It withdraws from the Iran nuclear deal — and other supposedly binding and sacrosanct agreements.  And Donald Trump is surely a world-champion of political invective! 

 
The point is that China is an authoritarian state; debate ends when the boss says so, and action follows his words.  India — and the US — are noisy democracies.  We do not work in a coordinated, planned manner, following the dictates of any one leader, however strong, however popular.  The protests against the CAA must be seen in this light.  So fundamental a change requires widespread support across the population, and not only a parliamentary majority.
 
So how do noisy democracies progress?  By checks and balances from autonomous and independent institutions such as universities, election commissions, courts,  independent media, and an effective opposition.  Instead of a strong leader determining what’s right, independent institutions frame the rules.  And these rules are built on a foundation of distinctive, balanced values.  Our leaders must be able to compromise, listen, tolerate, include, and balance as much (or even more) as they are strong, decisive, visionary and courageous.  Leaders who wish to leave a permanent positive legacy on vibrant democracies must set aside things that divide and make people fearful, and focus on things that unify and inspire.  When democracies progress they do so because millions of animal spirits are liberated, and not just the spirit of one state animal.  The process may be messier and less efficient than in an authoritarian state, but it is much more powerful.
 
Without fear means without favour: Let me come back to Mr Bajaj and industry.  We cannot speak truth to power if we plead for favours and special privileges.  For too many years, Indian industry has looked to the government for help — for protection from imports, for tax relief to help boost demand, for concessions and incentives to boost investment, for a word put in with a bank to renew a loan, and — in the bad old days of the 1970s — a licence to manufacture a particular product.  It is time to shed this culture of supplication, of deference, of vassaldom.  Let us deal with the government as equals —praising where praise is due, but criticising when criticism is called for.
 
Let industry shed its fear and speak truth to power, as Mr Bajaj did, and stop asking the government for things.  Let the government respond by trusting industry to do right.  And let industry repay that trust. A new relationship — as tough, demanding, and unforgiving as it is mutually respectful — between government and industry can take India forward and make 2020 a truly Happy New Year.

 
The writer is co-Chairman Forbes Marshall, past president CII, chairman of Centre for Technology Innovation and Economic Research and Ananta Aspen Centre; ndforbes@forbesmarshall.com