Don’t demonise: Modi sets the record straight on industrialists

Prime Minister Narendra Modi in a speech on Sunday in Lucknow highlighted the importance of industrialists in nation-building. It is a significant statement as India’s political class has dual standards when it comes to dealing with industry.

Ahead of budgets, industry associations are invited to meet the government for suggestions. Yet, we often find industrialists being demonised by politicians aiming to capture power. The consequence has been India’s peculiar brand of “stigmatised capitalism,” which has choked the pace of economic growth and led to underperformance.

In this context, Modi’s statement that he is unafraid to engage industrialists and they have an important role to play in nation building is significant. He should follow through his announcement by tweaking India’s economic architecture to make it market-friendly instead of business-friendly. Charges of crony capitalism stick only when there is a perception that the laws are framed to benefit a section of industry rather than grow the market.

India is among the handful of countries which has a long tradition of entrepreneurship and trade. Given this backdrop, India’s economic potential will be realised only when the economic architecture is created in a way which supports entrepreneurship in general. India’s policymakers need to note that be it communications technology or even extracting shale oil, technological breakthroughs have come from small companies operating without fetters.