Even while the coalition partners are slated to take office in the next few hours to form the new team at the Centre, it is interesting to note that the captains of the industry have, in a poll held by the Business Standard, emphasised the urgency to address the issue of unemployment in the country and the problem of inflation.
Typically, when a new government takes office, the tendency would be to seek concessions like tax relief, subsidies or benefits, and easing of rules that immediately benefit the business and industry.
The emphasis on the twin issues that are plaguing the ordinary folks is a departure from the routine. The concern shown by the top echelons in corporate India for addressing the burning social issues is commendable.
An attempt to check from the public domain if the problems of unemployment, lack of job creation in the economy, and galloping inflation, were raised in the recent past with the government by the chambers of commerce and industry associations, did not yield any result.
A Google search on these catchwords hardly brought out any representation made in recent times (say the past couple of years) to the government by the corporate sector or by any major industry body or chamber of commerce.
A problem acknowledged to be acute to figure on top of the pile of issues for immediate attention of the government under formation is surprisingly not seen to have been orchestrated as an issue to be attended to either in the pre-Budget memorandum and meetings held with the government, or in reaction to the budgets presented in the immediate past years, through post-Budget comments and critiques.
It appears to be the case that in the run-up to the elections, when the political parties were framing their manifesto and promises, the industry bodies made little noise about these problems.
This prompted an exercise to check how the big businesses in the country, which find their voice through the key business associations like the Confederation of Indian Industries (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI), have been receiving the annual budgets presented in recent years.
To avoid overloading the article with too many references, the reaction shared by one of the key industry bodies, CII, is shared below to understand how the representatives of the Indian industry responded to the policy changes over the last few years.
Though the 2017 Budget may now sound as if belonging to a different era, the short comment of the industry body exhibited on the side box says little about any serious issue facing the economy and commends the government for making things easy for business.
In its reaction a year later to the Budget of 2018, the last in the first phase of the Modi era, the rhetoric is pitched pretty positively and suggests that almost all the wish lists of the industry were granted!
The elusive 8+% growth is spoken of as if it is an instant possibility and within the immediate grasp of the North block!
The box on the left captures the reaction to the first two budgets after the mega mandate in 2019, which appears an unsurpassable peak, in light of the most recent electoral results.
The comments on the 2019 Budget talk of the US$5trn (trillion) dream which remains quite distant to this day!
Reading all the above comments by someone arriving from a different planet, the impression would be that it is a rerun of the golden era of the Guptas!
The following one for 2021, which came on the back of the COVID-19 setback, is yet another unqualified appreciation of the fiscal efforts undertaken by the government to meet the unexpected and unprecedented challenges of an economy that was shut down for a prolonged period resulting in major dislocation to the supply chains and hurting consumption in many sectors.
The comment that the Budget had ticked all the right boxes is akin to certifying an object as 24carat merely by seeing it!
By the time the 2022 Budget came to be presented, the slowdown in the other major economies contrasted with the rate of growth of the Indian economy, and the tag of the fastest-growing economy was effectively capitalised to appraise the economic performance.
Any contrary data brought into the discussion was considered an unfair criticism of a high-performance team by persons with a hidden agenda.
The advent of 2023 saw the political slogans of ‘Amrit Kaal’ and India@100 etc., getting melded into the economic vocabulary as well.
The industry bodies felt compelled to reverberate the same sentiment to be acknowledged of its commitment to be part of the government’s endeavour to make India an economic superpower.
The last full Budget of the second five-year term became a panegyric of invincibility in political management and infallibility in the economic management of the government.
The CII’s comments on the Budget resemble a book review by the author herself!
Seeing these comments, it is difficult to think that there is anything wanting about the economic management and a picture of perfection is imposed on the reality.
Rarely, in the past years, did the industry bodies show such deference and unqualified appreciation for the work of the government.
There is every reason to believe that the independence and rigour that was brought to bear on such appraisal of the functioning of the government, became lacking in recent years.
In the period before 1995, there was Nani Palkhivala to fearlessly scour the fine print and be unsparing in the critique of the government’s policies.
In the years since, while there was no equivalent intellect to do this exercise, there was no ostensible fear in speaking the mind with the key industry bodies.
How much would the position change in the years ahead, is something to closely watch.
An interesting reference to this aspect in a detailed article on the electoral results in the Financial Times, London is extracted here.
The article refers to the way the industry captains responded the previous time when it was a resounding victory, and contrasts it to the current impasse where the coalition dictates will decide many key policy matters.
While the business magnates are still figuring out how to straighten their spines which have remained quite bent over a decade, there is hope that they would gather enough courage, if not individually, at least as part of chambers of commerce to lay out the true requirements of the country that will help address the problems that are affecting the people at the bottom of the pyramid who are not the beneficiaries of the runaway stock market rise.
It will be apt to conclude the article with a short quotation from a speech given by Mr Palkhivala at Bangalore University on 15 January 1972.
He had aptly titled his talk “The Treason of the Intellectual”
In India today there are shortages of many commodities, but nothing is so scarce as intellectual integrity. Closer contact with the world will convince you that intellectual integrity is a much rarer quality than financial integrity. The treason of the intellectual consists in his not speaking loud and clear for the values that he, by his vision and the very nature of his personality holds sacred. What is needed is the resolute courage to stand up and be counted in support of a view which is not popular. Everyone finds it easy to swim with the tide. The great scientist GH Hardy said, “It is never worth a first-class man's time to express a majority opinion. By definition, there are plenty of others to do that.”
(Ranganathan V is a CA and CS. He has over 43 years of experience in the corporate sector and in consultancy. For 17 years, he worked as Director and Partner in Ernst & Young LLP and three years as senior advisor post-retirement handling the task of building the Chennai and Hyderabad practice of E&Y in tax and regulatory space. Currently, he serves as an independent director on the board of four companies.)
