Right-wing Leftist Modi Set to Make Marx, Markets Irrelevant in Creating New India
Since India Inc seems to be turning into a vociferous foe of PM
Narendra Modi, he doesn’t need friends and followers anymore. The masses
will rally behind him to fight avaricious tycoons and their loquacious
megaphones. For the past few weeks, a whispering campaign has been
launched against the Modi government for its supposed failure to deliver
on promises. In South Mumbai and Lutyens’ Delhi, the me-and-myself
types are gathering in well-appointed drawing rooms or clubs of
five-star hotels to grouch about Modi’s excessively centralised
establishment. After schmoozing with ministers and party officials for
over six months, the pinstriped class has realised that the PM cares
little about the coalition of the rich and famous, whose only aim is to
get policy tailored as per their interests. If the tone and tenor of
corporate discourse is any indication, Modi has to arm himself with
instruments to counter the crusade soon to be launched by a section of
the business world.
For him, there could be no better news than
this. Historically, politicians who are favoured by forums like CII,
FICCI etc. have never won the popular mandate the second time. What has
surprised the PMO is India Inc’s inability to respond to the positive
initiatives taken by the government. If manufacturing has hit a new low,
it is not because of government inaction but due to the failure of
Indian industry to start new ventures or complete the ones begun ages
ago.
If press reports are to be trusted, vocal, well-connected,
media-savvy corporate leaders feel Modi’s personal charisma is on the
wane because he hasn’t come through on economic reforms. Their idea of
reform is low interest rates, cheap land for new business ventures, less
import duties and liberal concessions on personal and corporate tax.
They believe good economics means a government of them, by them and for
them. After interactions with the new establishment, they realise Modi
may like to be seen rubbing shoulders with oligarchs, celebrities and
the chatterati, but when it comes to economics, he is more of a
Left-of-Centre leader than a blind promoter of free (for all) market. He
has been pushing an indigenous agenda for governance. His slogan ‘Make
in India’ has ruffled many feathers as it prevents foreigners from
converting the country into a market and not a manufacturing hub. His
decision to allow FDI in defence and realty sector is aimed at
encouraging MNCs to create productive assets in India. He has introduced
a few labour reforms, but is unwilling to give unfettered powers to
employers to adopt whimsical hire and fire policies. The PM expects
industry to move towards a Digital India, but by creating more jobs. For
the past four decades, while investment in industry has risen
enormously, the job opportunities created have been minimal, leading to
increased unemployment. Even economic growth is skewed. Currently, 65
per cent of India’s GDP comes from the urban population while 65 per
cent of Indians live in villages. Indian industry has failed to provide
enough employment channels for rural youth.
The PMO is much peeved
over the lobbying by business tycoons to change the Land Acquisition
Act in a manner that would allow pliable state governments to hand over
land to corporations at bargain basement rates. It is not a coincidence
that a few ‘liberal’ ministers who have little to do with the Land Bill
have advocated diluting its provisions. But both the PM and minister
concerned have chosen to keep mum because they feel the Act has enough
clauses enabling land acquisition for public utilities and not for mere
corporate promotion. Over raising FDI cap in insurance, Modi has adopted
an arm’s length distance. Since the bill is being touted as a major
economic reform, Modi has let his ministers bargain with other parties
to bring the matter to its logical conclusion, even at the cost of
diluting the intent of the original draft. In education too, his
ministers other than Smriti Irani spoke about reforms, but Modi let his
minister carry forward her agenda of Indianising education.
NaMo
isn’t impressed with the 35 per cent spurt in Sensex during the past six
months, which he feels is just hot money meant to promote certain
shares instead of benefiting the economy. In fact, there seems to be a
conflict between Modi’s economic model and the wish list of
entrepreneurs. Modi is in favour of demand-led growth, while industry is
pushing for supply side economics. It desires capacity expansion so
that companies can borrow liberally from public sector banks, import
more by over-invoicing and provide high-cost final products for maximum
profit. It is surprising that excessive supply hasn’t led to drop in
prices. Inflation has eased mostly because of the fall in prices of
consumer items. Real estate has collapsed not because flats are being
sold at lower prices, but due to the reluctance of consumers to pay.
There is no indication of decline in the FMCG and automobile sectors.
The PM wishes to propel policies that will put more money in the hands
of the consumer for both spending and saving.
Modi abhors
excessive control on business and has spoken out against coercive
retrospective taxation. His government’s decision to not appeal the high
court’s verdict in the Vodafone retro-tax case reflects the PM’s will
to provide a level-playing field to MNCs. But Indian industry has a
‘dil’ which always ‘maange more’. Modi is unlikely to offer any elixir
to quench their thirst. He doesn’t mind meeting honchos from abroad and
conveying his concept of good economics. After all, he is the only PM,
who had earlier as a CM proved to the world that good politics leads to
good economics. Modi’s Gujarat Model was based on the welfare state
principle. He chose the social sector, women’s empowerment, education
and an efficient bureaucracy to expedite decision-making.
There
is a feeling in certain quarters of the power circle that industry is
mounting pressure on the government to tweak the next budget in their
favour. But the PM is determined to unfold his own economic roadmap,
which will force big business to turn ‘Make in India’ into the fulcrum
of his dream to create a New India. Behind his chic look hides an
undiluted and uncompromising Swayamsewak as Swadeshi Modi. His demeanour
and the sheer authority of his personality is enough to stymie the most
articulate honchos who graduated summa cum laude from Harvard, Wharton
and Oxford. They could browbeat Manmohan Singh. But the Right-wing
Leftist Modi is determined to make both Marx and markets irrelevant in
creating a Modiscape of empowered India.
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