Themes > Current Issues
20.01.2009
Love in a Cold Climate: Business and Politics in Gujarat
Jayati
Ghosh
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.
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.
© MACROSCAN 2009