Best of BS Opinion: India must go from pro-business to pro-market

Today's newsletter ties together multiple issues, but the central theme remains one of much-needed reform and regulatory action, be in in job creation or aviation or industry

The central government on Tuesday unveiled a major employment push with the Employment Linked Incentive (ELI) scheme, an acknowledgement that India’s economic growth must translate into gainful job opportunities, notes our first editorial. The scheme’s focus on the manufacturing sector also highlights its centrality in the government's employment strategy. While the move, with incentives for both employees and employers is welcome, it will not be enough by itself to address structural challenges to large-scale, quality employment generation. Structural bottlenecks, from labour regulations to poor skilling outcomes, continue to be worrisome. Given a skills mismatch between training and industry, thanks to low penetration of technical and vocational education, such schemes will need to be supported by improving the skilling environment and policy reforms to materially improve the business environment, especially for small and medium enterprises. 

India's external affairs minister, S Jaishankar, speaking at the recent meeting of foreign ministers of the Quad, asked for the grouping to understand India’s right to defend itself against terrorism. The joint statement in Washington, too, reflected India’s concerns about cross-border terrorism by condemning the Pahalgam terror attack. However, achieving that goal may be challenging, given the nature of the current White House, says our second editorial. The US' willingness to do business with a country that openly supports terrorism in India - as seen in President Trump's hosting of Pakistan's Army chief Asim Munir shortly after the Pahalgam attack - raises misgivings in New Delhi. A key issue is that the nature of the group is itself a source of weakness. While Mr Jaishankar has said a more focused Quad will deliver results, its expansion from a group focused on a more open and free Indo-Pacific region (read: to counter Chinese power there) into one that include vaccines, artificial intelligence, security and even cultural exchanges has diluted its security element. The US' view of the Quad's usefulness could also turn on a dime, given that the Trump administration is swiftly closing in on a trade deal with China, its largest trading partner.  Our lead columnist today, Ajay Chhibber, takes a dim view of the growth of the Big Five business houses in India - Reliance, Tata, Adani, Aditya Birla group, and Bharti Telecom - arguing that India has adopted a pro-business approach instead of a pro-market one. As a result, these five have not only overshadowed the next five, even the next 20, but have created massive entry barriers that effectively shut out new entrants in the sectors they are in. What's more, they have exponentially expanded the number of sectors they have a presence in. Also, unlike the Korean Chaebols, which were export-oriented and created linkages with the small and medium enterprises, the Indian Big Five are almost entirely serving a protected domestic market, with hardly any world-class export products. India’s strategy of relying on big business to create world-class companies by giving subsidies and tariff protections seems to have backfired - the companies have grown, but they are not helping India grow any faster. 

 

  The preliminary report on the Air India flight 171 crash is expected soon, but the lack of any communication from the authorities has meant that conspiracy theories have proliferated, complicating matters for those struggling to get their confidence back in flying, writes Nivedita Mookerji. The truth about what triggered the fatal crash should also outline the future course of action in aviation, particularly the importance of clear communication during a crisis. It is also time for the regulator, the Directorate General of Civil Aviation (DGCA), to prioritise air safety to ensure a smooth aviation system and improve its oversight significantly. Given the growth of the aviation sector, the corpus of trained and experienced human resources has not kept pace with the requirement, a gap that needs urgent attention.  In his book review of Robert MacFarlane's Going with the flow of nature, Shyam Saran examines the idea of rivers as living things, and whether they should, or can, be seen as merely a piece of property subject to exploitation for profit. Interestingly, while MacFarlane is an author of some repute on the spoliation of riverine regions by corporate interests, Saran has been a prime minister's special envoy on climate change. MacFarlane explores the notion that rivers, and other natural bodies, are living things and should be treated as such. For this book, he travels along three river systems: the Rio Los Cedros in Ecuador, the Magpie river in Quebec (Canada), and the three rivers that sustain Chennai - the Kosasthalaiyar, the Cooum and the Adyar. In Chennai, he finds that industrial sewage and rapid urbanisation have already destroyed these three river. Saran finds the book compels the reader to face the price that modern industrial civilisation extracts to meet material demands of both affluent and aspiring societies.