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Toffee and land

Mr Gandhi shouldn't confuse cronyism and pro-business policies

Business Standard Editorial Comment  |  New Delhi 

In recent days, the Congress party has rediscovered some of the energy that it lacked in the earlier part of this general election campaign. Perhaps this follows from a recognition that it has failed to avoid making Narendra Modi the main issue in this campaign - and so it has recalibrated its messaging to focus, belatedly, on Mr Modi's claims of good governance in Gujarat. It may be too late for the Congress to make a dent in the "Gujarat Model" narrative. But recent speeches from the party's vice-president, Rahul Gandhi, in particular, which have spoken instead of a "toffee model" in Gujarat, indicate that this is precisely what the party is trying to do. Mr Gandhi has, in speech after speech as well as in a television interview broadcast on Sunday, spoken of the special packages given by the Gujarat government to the Adani group of companies in particular, saying that they got land for a single rupee, the price of "a toffee". "Is there any other industrialist you know of in Gujarat?" he asked in the interview. He also said that Mr Modi had offered very attractive terms to the Tatas, claiming that "in Gujarat, the Tatas get a loan for 20 years at one per cent, while farmers have to pay 12 per cent".

The point is not the accuracy of Mr Gandhi's mathematics, which depend very heavily on the exact discounting chosen, and so on. The worry lies elsewhere. Perhaps he intends to attack Mr Modi for cronyism, which is a legitimate political accusation. After all, the fact that Mr Modi handed out land to the Adanis cheaply is well known. But the problem arises when such accusations acquire the tone and character of a general attack on incentives for business that are not preferentially doled out only to the favoured few. It is important to distinguish between business-friendly economic policies for industry to revive investment and crony capitalism, where the government favours specific business houses with special concessions - often in return of political support from them. Mr Gandhi should focus on specifying how certain decisions of the Gujarat government smacked of crony capitalism, instead of allowing his criticism to be seen as an attack on the idea of pro-business policies altogether.

To an extent, Mr Gandhi's recent statements demonstrate the effect of Arvind Kejriwal's insurgent Aam Aadmi Party and its blockbuster media presence on mainstream political rhetoric. It is unusual in an Indian political campaign for accusations of cronyism to receive so much space; and it is even more unexpected coming from the scion of a party in power for 10 years. After all, the United Progressive Alliance has been subjected to several accusations of cronyism - whether over coal mine allocations or natural gas prices. But Mr Kejriwal, with his attacks on various other corporate houses, has put the issue squarely on the agenda. Mr Gandhi is, late in the day, picking up the baton and running with it. However, he should remember that he himself has argued that the only way forward for India is "a partnership between business and the poor". Thus, he and other political leaders should not confuse crony capitalism with business-friendly measures. The two are different. Allowing any confusion of the two to persist will have adverse consequences for India's economy.

First Published: Wed, April 16 2014. 21:38 IST