Capitalism in its current form is plagued with serious structural problems. Growing income inequality, the extreme concentration of wealth and irreversible environmental damage are some of the most urgent crises created by capitalism.
In addition to this, certain Indian industries have spawned their own unique set of problems, aptly summed up by economist Raghuram Rajan: in India, there is a skewed form of capitalism. Promoters take the upside but the downside goes to the creditors, especially the public-sector banks.
Then there is the putrid history of certain Indian business houses manipulatingaging the policy environment and gold-plating the capital cost. In the past, a few Indian industrialists had built big infrastructure projects worth thousands of crores entirely with bank money. By using a complex web of related-party transactions and inter-group dealings, they created immense personal wealth by repeatedly turning debt (mostly public-sector bank money) into equity undergirded by an endless evergreening of loans from public sector banks.
While both Congress- and Bharatiya Janata Party-led governments are to be blamed for these sordid practices of the past, it’s incumbent on the present Narendra Modi government to reform the capital and money markets and guide Indian capitalism towards a new era of sustainable and equitable growth. The Opposition must question the government for not fixing the structural problems and for not taking action against those promoters who had systematically siphoned off public money to offshore tax havens.
But the targeted and selective haranguing of Adani and Ambani is a regressive political strategy. It is a throwback to the times when wealth creation in India was seen as inherently immoral and corrupt. The Opposition would do well to remember that the majority of Indians today rather want to emulate entrepreneurs like Gautam Adani and Mukesh Ambani.
The young and aspiring Indian wants to improve her station in life, and not necessarily partake in destroying what others have created. That perhaps explains why the constant baiting of Modi by hyphenating him with Adani-Ambani has not helped the opposition electorally. Social media warriors may have a field day running Twitter hashtags like #StopAdani, #BoycottAdaniAmbani and #BoycottJio, but when it comes to elections, the charge of Modi favouring either Adani or Ambani has found little traction with the voters.
Besides “hum do hamare do” (we two, our two) kind of political slogans divert the attention from the real challenges facing us as a nation – which is how we can set our growth and development on a sustainable path, eliminate poverty, reduce inequality, protect our environment, clean our air and water and make our towns and cities livable.
Will attacking Adani and Ambani alone solve all our problems? We all know the answer is an emphatic no. That’s why in the recent civic polls in Gujarat and Punjab, the sitting chief ministers rallied their parties to massive electoral wins. The Opposition had accused both Vijay Rupani and Amarinder Singh of favouring Adani, but the charge didn’t stick.
In the last century, the politicians often used the names of Tata-Birla as a trope in political sloganeering. That was the time India was languishing as a backward, semi-industrialised, poverty-stricken nation. Today we are among the world’s five biggest economies, aiming to move up to become the third-biggest economy behind the US and China.
But to achieve that we will have to cultivate a climate of celebrating our entrepreneurs and industrialists. We will have to encourage private capital to invest in seaports, airports, roads, renewable and clean energy, data centres, core infrastructure sectors, in the manufacturing, IT and services sectors.
When a company from the West like Tesla, Netflix, Apple or Microsoft goes on to dominate the global markets, they are encouraged and celebrated by their respective markets and countries. It’s time that our country too has its fair share of companies in the world’s leading conglomerates. Investments will flow in only those markets that provide a stable, predictable political and policy framework. But by unnecessarily dragging the names of corporate captains into political slugfests, we as a nation are sending a negative signal to international capital.
We have been trailing behind not only China but also countries like Vietnam, Taiwan and even Bangladesh when it comes to creating our own competitive advantages among the league of developing nations competing for the inflow of investments, new technology and private capital. While reforming our economy, our institutions and the legal, policy and regulatory regimes to make our country look a sufficiently attractive investment destination is a long-drawn, painstaking process, the least we can do in the short term is to reach a political consensus of abjuring the selective targeting of corporate groups businesses for political mileage.
The country’s telecom, power and mineral and mining sectors are still reeling from the devastating aftereffects of Vinod Rai’s sensational and spurious audit reports followed by equally erroneous Supreme Court orders of coal block and telecom licence cancellations that in one stroke wiped out thousands of crores of equity and bank money invested in the country’s core infrastructure sectors. As a country, we will do ourselves a great favour by not falling prey to the same kind of sensationalism again.
India had been too late in joining the first three industrial revolutions. The second-most populous country in the world, with tens of millions of people to feed and clothe and a young workforce of millions to be gainfully employed, can only miss the fourth industrial revolution bus at its peril. Embracing private capital and celebrating Indian entrepreneurship is the first essential step on the path to creating a favourable climate for accelerated, sustainable and equitable growth and development that India desperately needs.
Structural and systemic problems plaguing our capital and labour markets, our financial and regulatory institutions and the inadequacy of the economic policy framework must be addressed. Specific charges of crony capitalism and corruption should also be highlighted and the government must be held accountable for any favouritism shown to any particular corporation. But a wholesale denunciation of business houses is a precarious approach that will only damage India’s reputation as an advanced and mature economy with a stable polity.
Ashish Khetan is a lawyer and the author of Undercover: My Journey into the Darkness of Hindutva.