July 15, 2021 Sujeev Shakya

What they said at CII

The timing of the Confederation of Indian Industry (CII) session on the eve of an election may have ushered a new era as far is acknowledging the role of business and commerce in Indian politics is concerned. Never before had such a jamboree of political leaders taken place in which they were expected to lay out their economic agendas before the captains of industry. Politicians have realised over the years that election manifestos have become a joke and that the influence of business houses is paramount. A hung parliament stares at the politicians and they look forward for the corporate world to bail them out.

The BJP leader Atal Bihari Vajpayee was impressive when he spoke at CII, but the other leaders were clearly uncomfortable in talking brass tacks before businessmen. It was clever of Vajpayee to have harped on the swadeshi plank, defined and adapted for the ears of Indian tycoons. At a time when lots of Indian business houses are succumbing to the onslaught of multinationals, they have found solace in the swadeshi slogan. What is clear is that while former Finance Minister Monmohan Singh has shouted himself hoarse in calling for liberalisation, the large pro-protection lobby of business houses has not gone away. And it is this lobby within the CII, breaking decorum to speak out last month, which might define how the reform process in India is going to unfold.

The coming five years shall determine whether or not India will become an economic superpower on the basis of its reforms, and how soon the government can get out of running business and industry. It is clear that reforms will not take place at the pace that Mr Singh generated these last five years. Since other economies in South Asia have keenly followed, and emulated, the Indian experiment with liberalisation in varying degrees, reforms in the other countries will also definitely slow down. Hence, can we see a South Asian deceleration, which will leave it as a whole even further behind the Chinese and the Asian tigers?

While referring to the CII meet, I must note with some chagrin that not one political party saw it necessary to focus on the regional economy —meaning South Asia´s economy as a whole. While India might have remained, and wants to remain, insular, market forces are bound to force it to look at economic relationships with Bangladesh, Sri Lanka, Nepal and—on a different plane—Pakistan. When the entire world is busy forming trade blocs, the delay in doing so in South Asia may be detrimental to the regional countries, although it is true that this insularity will affect the smaller economies like Bangladesh or Nepal than the larger two.

The bull run started by the FIIs on the eve of an election shows healthy signs as far as their trust in the Indian economy is concerned and reiterates the de-linking of politics, human rights and economic issues that is visible in the case of China. This clearly indicates that, slowly but definitely, economic agendas, and other ´non-political´ issues are having more of a role in the Indian politics than before. Perhaps the time will come when the politicos will also deign to look at neighbouring economies. Is the new government in Delhi listening?