These
are bad times for corporate honchos, globally and in
India. Quite apart from the financial crisis and the
associated credit crunch, the end of the boom is exposing
many weaknesses that could earlier be effectively covered
up by the rapid expansion of output and profits. The
humongous scam of Satyam Computers is of course the
most dramatic example of this. But it may mark a more
general change in social attitudes towards big business.
As the euphoria around growth dissipates, the public
is becoming more conscious of the possibilities that
all corporate behaviour may not be squeaky clean, and
that all industrialists may not have been the saviours
of the country that our slavish media generally presented
them to be. So a period of more questioning and even
sceptical attitudes towards big businessmen is only
to be expected.
It is also likely that this will make the businessmen
themselves more insecure and cause them to search anxiously
for crutches, both economic and political. In any case,
corporate behaviour in India has always been marked
by a contradictory attitude towards the state – demanding
complete independence and freedom from all controls
when it suits them, and equally insistent upon protection,
subsidies and state support when the going gets even
marginally tough.
It is not an accident, therefore, that even in Britain,
the first large company to demand a government handout
in the ongoing slump was an Indian-owned company: Jaguar
Motors, which was purchased by the Tata Group last year
in an extraordinary act of hubris. In India, too, the
demands for state support in the current slowdown from
industry lobbies have been rapid and importunate, much
like spoilt children who come running to Mummy when
playground activities do not go in their favour.
With the sudden loss of confidence among corporate leaders
has also come a yearning for a strong government that
will work for them. In an increasingly uncertain world,
they long for certainty, especially for the knowledge
that they will be politically protected and that the
rest of society will be disciplined to ensure their
own profits. So they turn desperately to leaders who
they think can deliver this. This may be the social
psychology behind the extraordinary scenes that were
witnessed last week, as top Indian industrialists vied
with each other to lavish praise on the Chief Minister
of Gujarat, Narendra Modi.
It is by now obvious that Mr. Modi generates strong
emotions, and that many of the emotions he generates
are not all that positive. It is also well known that
large capitalists tend to prefer strong leaders who
do not brook opposition and can impose their will upon
others, especially when their will is ''business-friendly''.
And of course, business is ''apolitical'' to the extent
that it is only interested in its own profitability
and will go along with any politics that supports it.
Even so, it was startling to see the degree of sycophancy
and even rather pathetic dependence upon this political
leader, which was openly being displayed by grown men
who should know better. The various business leaders
who had gathered for a special two-day summit to attract
private investment in Gujarat provided paeans to Mr.
Modi's charisma, his leadership qualities, his generosity
(to business, of course), his farsightedness, his eminent
eligibility to be Prime Minister, and much more.
What is wrong with such an assessment, or with such
open declarations of not just admiration but almost
slavish adoration? Surely corporate leaders, like all
the rest of us, are entitled to their own opinions and
are free to express them. So why should we comment at
all on this chorus of praise for Mr. Modi?
One reason is because this assessment reflects so poorly
on the judgement of these large industrialists, who
have been so feted by media and society generally as
sources of pride for the country. This feeling of lack
of judgement need not reflect any political biases.
Let us therefore exclude the political track record
of Mr. Modi: his presiding over one of the most appalling
communal pogroms in recent Indian history during the
post-Godhra riots; his implicit encouragement of intolerant
anti-minority consciousness among citizens in his state;
his undemocratic attitude towards dissent in any form
and ruthlessness in dealing with it; his encouragement
of a proto-authoritarian personality cult. Let us consider
only that part of his record which the industrialists
have found to be so laudable: his government's ''achievements''
in economic and social indicators.
Gujarat under Mr. Modi's rule is being celebrated for
having achieved rapid rates of growth and industrialisation,
which therefore ought to have translated into better
conditions for its people. It turns out that this record
is actually much more dismal than has been projected.
High growth has been accompanied by increasing inequality,
so that the benefits of the growth have not percolated
to the people as propagated by the ''trickle-down''
hypothesis.
According to the National Sample Survey, between 1999-2000
and 2004-05, real per capita consumption in the rural
areas of the state hardly improved, and for the bottom
half of the population did not improve at all. Employment
growth has also been low, especially in rural areas,
relative to output growth.
The National Family Health Surveys provide even more
depressing news about basic health and nutrition indicators
in the state. In 2005-06, child malnutrition, as expressed
in very low weight-for-age, was as high as 47 per cent
in Gujarat, higher than the all-India average. 80 per
cent of children under 4 years of age were found to
be anaemic. Nearly half the children between 12-23 months
were still not fully immunised: 45 per cent of urban
children and 60 per cent of rural children. More than
60 per cent of pregnant women were anaemic, and in rural
areas 60 per cent of child deliveries were not in institutional
conditions.
What is more startling is that several of these indicators
were not only worse in Gujarat than for India as a whole,
but had even deteriorated in Gujarat since the late
1990s! All these depressing conditions have therefore
persisted or got aggravated under Mr. Modi's watch.
And so the shining growth story has also been at the
very least a major failure of socio-economic management,
since it has clearly failed to deliver in terms of improving
the basic conditions of life of ordinary people. This
is a sad comment on Mr. Modi's capacity to govern in
the interests of the people.
Obviously, the Tatas, Ambanis, Mittals and other corporate
players who gathered in Ahmedabad last week either had
not cared to find out any of this, or else simply could
not be bothered even if they did know. In terms of self-interest,
they were probably right: the one group that Mr. Modi
has made sure he delivers to, is precisely big business.
It has benefited hugely from the Gujarat government's
offers of subsidised or free land, a slew of tax incentives,
assistance in disciplining workers and many other favours.
No wonder, then, that they saw fit to shower praise
on him for being good to them. The alarming thing is
that they also appeared to think that he was therefore
good for citizens in general, and even for the country
as a whole. Unfortunately for them, such blatant lack
of judgement will only make it even harder for the rest
of society to trust what these business leaders say
in future.
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