Modi’s Bid To Re-Engage With India Inc Is Just What The Doctor Ordered

By declaring openly, at an event in Uttar Pradesh yesterday (29 July), that “we are not…scared of standing next to businessmen”, Prime Minister Narendra Modi has finally broken the self-imposed mental shackle of not being seen as business-friendly.

The surprise is not that he made the statement; it lies in the fact that he felt he had to say it openly when most people who have watched him since his Gujarat days know he is usually accessible to businessmen, though not for special favours.

The self-imposed restraint of keeping India Inc at arm’s length was probably triggered in the run-up to 2014, when Arvind Kejriwal started his abuse of “Adani and Ambani”. This was followed up by Rahul Gandhi’s “suit-boot-ki-sarkar” jibe in 2015. Since then, Modi has not been keen to be seen as friendly to businessmen, especially given his efforts to pitch the Bharatiya Janata Party (BJP) as the party of the poor.

At the Uttar Pradesh function, it seemed as if Modi had decided that if you cannot live down negative perceptions about associating with business, you might as well make a virtue of it.

Among other things, Mint quoted him as asking: “Should we insult them (businessmen)? Should we call them thieves and burglars (chor aur lootere)?”

Even while emphasising that he will give no quarter to any businessman who indulges in wrongdoing (“he either has to flee the country or spend his life in jail”), he said his own conscience was clear, and “you don’t get tainted by standing with anybody”. In an indirect attack on Congress-style cronyism, he added: “those people have such fears who don’t want to meet in public but will do everything behind the scenes.”

To be sure, Modi began making changes last month, when he held his first open session with India Inc in Mumbai. This time he underlined the point to businessmen by directly telling them that he did not consider them to be outcasts.

It is always a mistake for any prime minister to seek to build a pro-poor image by keeping business away. You can’t achieve anything – growth or jobs – by pretending that it can all be done by government on its own. No country can prosper without a robust and ethical business climate, and for this regular interaction with businessmen is essential.

This dialogue was all the more needed when Modi has been trying to reset expectations from business, where they are now expected to stick to the straight-and-narrow, grow ethically, pay their taxes, and make do with less black money. Worse, they are also being forced to pay the price for past mistakes by being taken to the cleaners at the bankruptcy court.

It is when you want India Inc to reform itself that you need to talk more to it. This missing dialogue has now, hopefully, been reinstated. Hopefully, it will arrest Modi’s falling stock with businessmen.

As we noted in Swarajya in June, “Narendra Modi’s stock with India Inc has probably never been lower. On record, most chief executive officers (CEOs) will be all praise for the government and its reforms; off the record, they mutter darkly about how the government is yet to fix the big problems of the economy. That they are disappointed with Modi would be an understatement”.

A Business Standard poll of 28 CEOs indicated that the government should focus on delivering on its promises in its last year and not announce more schemes. And one senior editor wrote that the “negative buzz among select CEOs is growing.”

Modi has now decided that keeping business at a distance does not work, and may even be counter-productive. In fact, he should use the opportunity to mainstream good business and make them the lynchpins of India’s next growth story.