How significant is PM Modi's caution against treating all industrialists as ‘chors’

It is significant that Prime Minister Narendra Modi has clarified that industrialists have an important role to play in nation-building just as other categories of people like farmers, labourers, bankers, workmen, financiers and government employees and that if one’s intent is good and clean one can stand with anyone and no taint will attach to oneself.

Right since the Nehruvian era and the days of the licence-permit raj there is a taboo attached to industrialists being seen with politicians and bureaucrats, which has lingered on, though to a reduced extent. It was, therefore, important that the Prime Minister declare that all industrialists must not be painted with the same brush.

In the early decades of independence, the highest rate of taxation on income was a whopping 95 per cent which meant that the businessman who earned Rs 10 lakh had to part with Rs 9.5 lakh of that to the government. It is undeniable that people were forced into dishonesty because of such unrealistic expectations and lop-sided rules.

Later, realisation dawned on finance ministers and the highest rate of taxation was scaled down. Tax compliance improved even as the tax net widened. There is still a lot of tax evasion but tax laws are undoubtedly more realistic.

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Congress president Rahul Gandhi has been shouting at public meetings that Modi fraternises with businessmen. That now-tainted businessman Nirav Modi of the Allahabad bank scam was seen in a group photograph with Prime Minister Modi in Davos was made a big thing of. Likewise, Gujarat industrialist Gautam Adani being on the prime minister’s business delegations to several countries is frowned upon.

This is the tendency that Narendra Modi is alluding to in public while making an impassioned plea not to treat industrialists as pariahs. As Modi has pointed out, Mahatma Gandhi had an open and transparent relationship with then leading industrialist GD Birla during the freedom struggle. He almost invariably stayed at Birla abodes but that was never misinterpreted.

The Prime Minister said his transparency was in sharp contrast to the “back room and shadowy” dealings of the Opposition leaders. However, a section of the Opposition has been critical of the way the public sector Hindustan Aeronautics Ltd (HAL) was removed from the controversial Rafale deal and replaced with Anil Ambani’s newly-created company in the field.

Modi’s sharp response at his meeting with industrialists in Lucknow came amidst criticism holding him personally accountable for the re-negotiation of the Rafale deal.

With general elections less than a year away, the Prime Minister is particular that Rahul’s charge of association with some industrialists and his lack of transparency must not stick. There is also ambiguity about the secrecy clause in the Rafale deal with India, which is sowing confusion in the public mind.

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The Prime Minister’s visit to Lucknow apparently also had to do with the announcing of new projects that would seek to quick-start an economy that has been on a slow path. With projects worth Rs 60,000 crore announced, there is an attempt to re-energise the Uttar Pradesh economy. By reposing his trust in industrialists in general, Modi attempted to wipe off the stigma on them of use of unfair means across the board.

The Prime Minister claimed that the projects launched on Sunday would generate direct employment to at least two lakh people while Uttar Pradesh would soon become “a trillion dollar economy.” That such figures are dished out without due authentication on election-eve is a malaise of our system but surely some development would accrue from the investment.

He said, “we humiliate industrialists, call them thieves, robbers.... how is that right”? He, however, qualified his remarks by saying that those who did any wrong would have to either leave the country or end up in jail.”

All in all, it was an election-inspired visit that Modi was trying to capitalise on.