Indias big business: A persecuted minority – The Times of India Blog

Sixty years ago, the great philosopher-novelist Ayn Rand delivered a famous lecture in which she called Americas big business as a persecuted minority. Evidently, she overlooked the situation in India, for the persecution of all businessbig and small, in services and manufacturing cutting across sectorswas infinitely more here than it was ever in the United States. Even 30 years after liberalization, which did away with some of the worst features of socialism, the captains of industry continue to be treated like second-class citizens. This is evident from the treatment meted out to the Infosys bosses, the Tata group, and the auto sector.

Not that micro, small and medium enterprises (MSMEs) are treated any better. An Indian-American entrepreneur, Rakesh Nayak, recently exposed the governments big claims about the enhanced ease of doing business in India in a tweet: Unpopular opinion: After spending almost a month in India doing business, I have concluded one thingthe morons who gave me lectures on how India has developed digitally & become business-friendly recently are either jobless or never did any business or they are worth nothing.

It has got more than 19,700 likes and 500 replies since then. It has been retweeted over 4,200 times.

MSMEs, however, can find some solace in the fact that at least ministers, ruling party leaders, and other politicians dont badmouth them. Even communists, doctrinally and temperamentally opposed to anything private, favor support to MSMEs.

Big business, however, is a different ball game. Politicians, especially those leaning Leftwards, regularly portray corporate biggies as anti-poor, profit-obsessed monsters who ought to be kept on a tight leash. Even the incumbent ministers, supposedly representing a Rightwing government, routinely humiliate top magnates. Big businesspersons can be accused of being heartless towards the plight of their employees and fellow citizens, ruthless in the market, not nationalistic enough, and now even anti-national.

A minister slams India Inc focusing on profits rather than nation building and another one harangues the auto sector for not going electric. These verbal assaults are symptomatic of a severely statist attitude which, in turn, has real, painful consequences.

For, in policy terms, statism translates into tight controls over businesses. Not just regulatory mechanisms are made more stringent and compliances more cumbersome and agonizing; state intervention tends to enter into corporate decision making.

A few years ago, the government mandated that a certain amount of big companies profits should go towards corporate social responsibility (CSR) funding. Non-compliance could result in criminal liabilities. Thankfully, finance minister Nirmala Sitharaman announced in August 2019 that the liabilities would be just civil and not criminal.

But the very idea of mandatory CSR is an abomination; it is indeed the epitome of illiberal welfarism, something no lover of human freedom can condone, let alone support. The first and foremost objection to the idea is that it represents the states brazen desire to control of one of the noblest of human instinctsphilanthropy. The urge to help fellow human beings is as old as mankind. Over two-and-a-half millennia ago, Prince Siddhartha Gautam, moved by the sufferings of men and women around him, sacrificed all the pleasures and privileges that his royal status could bring to him and became Lord Buddha. He was certainly not responding to some fiat by his father to do so.

Similarly, those countless Europeans who gave up comfortable lives to serve humanity as Christian missionaries in Africa and Asia did not do so because of some government diktat. In the last century, a large number of rich youngsters in the West as well as in India became communists and socialists in the mistaken belief that their ideologies would make the world a better place. Many American tycoons have donated huge amounts to set up foundations and charities. Indian business houses have also donated for society. So, why should our government force big industry to become philanthropic?

Mandatory CSR is egregious not just because it introduces a pointless state intervention where none is needed, but also, and more so, because it attempts to control all that is personal and private to any individualinstincts, sentiments, munificence, genuine, and spontaneous altruism. It enters the sacred space of the citizen, conscience, and defiles its sanctity. It is the colonization of conscience.

But Indias deep pink statecomprising statist policy and decision makers entrenched in the systemdoes not believe that corporations have any conscience. Since the institutionalized mindset is inveterately anti-business, the policy framework remains hostile to entrepreneurs. An obvious consequence is price control. The healthcare sector is the worst affected one; price caps on drugs and medical devices are a regular occurrence. The pretexts are well-knownaffordable healthcare, helping the poor, etc.

The powers that be, however, also meddle in other sectors to regulate prices. One of the most anti-business decisions the Narendra Modi government has taken so far was the setting up of the National Anti-Profiteering Authority (NAA) in 2017. The objective was to ensure that the consumer benefited from the reduction in rate of the Central goods and services tax. The exercise militated against the spirit of liberalization, for every economist, barring the lal salaam-types, agrees that prices are best determined by the market; politicians and bureaucrats should have nothing to do with them.

The NAA was supposed given a two-year term. But then, as Milton Friedman said, nothing is so permanent as a temporary government programme. The NAA got another extension, of two years, in 2019.

But what now, as the extension ends in November? Will the fiend die its natural death? Well, not if our political masters have their way, for the Goods and Service Tax Council is still pondering over the great issue of keeping the NAA alive. A proposal doing the rounds is that it may be merged with the Competition Commission of India (CCI). Evil is vanquished only in fiction, not in reality.

The moral of the story is that some things dont change in India; anti-business attitude is one of them. Unsurprisingly, India Inc remains a persecuted minority.

Views expressed above are the author's own.

END OF ARTICLE

Continued here:

Indias big business: A persecuted minority - The Times of India Blog