The guest list

Instead of meeting captains of industry, the prime minister should have heard from some ground-level troops to fix the economy

By Mohan Sule

The ritual of the policy makers from prime minister downwards meeting corporate bosses every time the economy goes into a tailspin is familiar and frustrating. The conclusions drawn from the few hours of interaction with the who’s who of the government are also predictable. The ministers kick the ball into the businessmen’s court. The manufacturers and financiers plead for more fiscal and monetary sops. It is puzzling why Prime Minister Narendra Modi, who rode to power promising a break from the past, should carry on with this legacy of a thoroughly discredited regime. Though there was a sprinkling of public sector presence, the gathering was dominated by big private sector players. Many of them could have been the poster boys of crony capitalism, enriching themselves by cornering lucrative commodity prospecting rights. One is allegedly involved in the coal block allotment scam and another blamed by the government of under-performing to get higher prices for the output. A banker is grappling with mounting bad loans due to interference from power brokers and so also a peer because of aggressively chasing market share. Another emerging industry czar with political ties is believed to have under-reported revenues to avoid levies. The head of a diversified conglomerate makes a toxic product as well as a food item that is of late under the scanner of the regulator.

The old guard of India Inc is known to get policies tailored to protect them from competition, out-of-turn favors and easy access to the PMO and the finance ministry. It is used to bagging licenses not for any skill set but because of the proximity to the movers and shakers in the capital. Loans were obtained without adequate collateral and risk assessment following phone calls from bureaucrats, secure in the knowledge that any execution risk will be taken care of by visiting the relevant ministers. Auctioning of natural resources, instructions to banks to give credit based on commercial viability, cracking down on makers of spurious products and directing influential visitors to the concerned officials instead of the finance or prime minister have not helped the Modi government in winning any popularity sweepstakes with Corporate India. In fact, a patriarch got miffed because his fund-raising proposal did not get any preferential treatment. Many are heard grumbling, anonymously, in the media of not getting to meet the prime minister to sound him out on troubling issues specific to their projects. After operating in such a comfort zone, no wonder industry is muttering about cheap Chinese imports and sluggish rural market. The subtle message is that the government should continue routing doles through the Mahatma Gandhi National Rural Employment Guarantee scheme and increase the minimum support price for crops to bring prosperity to the hinterland, hurt by poor monsoon, to lift sales instead of declaring that it is ready to set up factories to provide jobs to the next generation of those farmers willing to give up their land for a stake in future prosperity.

What should the prime minister have done instead? Often he has professed his belief that it is the medium- and small-scale units that drive employment in India. To test his proposition, he should have invited tier 2 and tier 3 entrepreneurs. For example, the boss of the newest private sector bank and a new-age insurer could have elaborated on the potential of financial services to marry technology and human resources. The founder of a corporate healthcare chain could have focused on the paucity of skilled workers including doctors, support staff and lab technicians. A publisher of educational tools would have been a symbol of the parallel system that is catering to thousands of students outside the mainstream. One of the MPs from the prime minister’s own party could have revealed the potential of the entertainment industry as a revenue generator as well as a magnet for employment in front and back of camera. The potential of processed food, as any of the promoters graduating from the unorganized sector to builders of brand for the domestic and export markets would have told, still remains to be tapped. A food supermarket entrepreneur would have been appropriate to note the linkages between better prices for farmers, cheaper products for consumers and training of unskilled labor. A budget hotelier would have reminded that domestic tourism, too, is a crucial contributor to the GDP. A first-generation airline owner could have dissected the reasons why a once emerging sector had gone out of favor with investors and how it is a supplier of jobs ranging from flight service to maintenance engineers. To win the war against poverty and unemployment, there is need for foot soldiers rather than generals.