The trouble that ICICI Bank CEO and MD Chanda Kochhar is getting into is a pointer to the fact that the Narendra Modi government is waking up after quite a few bank defaulters fled India before the law-enforcement agencies could get a whiff of their intentions. Before a whistleblower blew the lid off Kochhar’s façade of professional integrity, properties of Nirav Modi worth more than the amount he has misappropriated have been forfeited. Rotomac’s owners have been arrested. Every other day, some ‘NPA villain’ is raided and apprehended. As this government ends its fourth year, the Chidambaram family is in the soup. A reason might also be the acquittal of A Raja by a special court where a lax public prosecutor failed to establish the Union of India’s case. It is obvious that the image-conscious prime minister is shaken. His concern and newfound alacrity are praiseworthy. Fly-by-night businessmen will now find it tough to escape the law. However, in view of the unravelling corporate scandals, a pro-active vigilance policy should be in place. For long, since the premier was the chief minister of Gujarat, his rivals have targeted him, accusing him of cronyism — often referred to as “crony capitalism” by socialist propagandists — of the Ambani-Adani variety. This, even as their allegations fly in the face of hard evidence. Such arguments must reach the lay in a lucid language. Further, when a Nirav Modi gets letters of credit issued from Indian as well as foreign banks by flaunting PNB’s letters of understanding, or when Videocon’s Venugopal Dhoot floats a company with Kochhar’s husband, takes a loan worth thousands of crores and then sells it off to Deepak Kochhar’s trust for some lakhs, the government can pre-empt such dubious acts. Such prevention would be wiser on the part of the state than the cure of chasing the crooks and recovering the money lost from them. Then, such a policy must be marketed well, too, for the sake of politics.
On the other hand, when the nation is concerned about the jobless GDP growth, it is not advisable to create an atmosphere of fear in the business class. This class of people that had got stunned by the 2008 subprime mortgage crisis was hit by a scared UPA government’s policy paralysis after the INC developed cold feet following incessant reports of financial wrongdoings by the then ministers. While the industry began looking up in the first two years of the BJP-led NDA government, it was struck by demonetization in the third and GST in the fourth. No doubt, the disruptive measure of November 2016 was needed to deal a blow to cash hoarders and the reform of July 2017 had been an age-old demand of all. However, the implementation of each left many befuddled. First, repeated warnings by the prime minister before the invalidation of Rs 500 and Rs 1,000 notes might have been good politics, given the BJP’s anti-corruption promises in 2014, but it was inadvisable economics. Then, if large denomination notes had become a convenient tool in the hands of bribers, the introduction of Rs 2,000 notes was inexplicable. And while GST was supposed to rid businessmen of the hassle of filing a whole lot of taxes, the complicated slab structures are now more difficult to handle than the sales tax, octroi, excise duty, etc that they had to contend with under the previous regime. The government must appreciate the fact that the trading class flourishes and generates jobs aplenty when the systems are not only simple but also familiar. Businessmen are now wondering whether the way they had been functioning for more than 70 years of Indian independence was all wrong! Ease of doing business, the government must note, is not realised by digitisation of the processes alone, which the Modi dispensation is excited about. That merely brings in transparency. The state must make rules and regulations simple and ensure there is no multiplicity of authority in the process of sanctioning a business.
Fortunately for Modi, he commands a huge support base of social media warriors who can hail his moves, defend him and troll the opposition. Unfortunately, the internet penetration is still not enough for the campaign to impress every pocket of society. Therefore, a multi-level approach is warranted to make good economics good politics as well. First of all, a roadmap of doing business ethically yet easily should be placed before businessmen. Then, if some slippery tycoons are being chased now, the government must hereafter felicitate scrupulous magnates before the people at large. No personality lesser than the prime minister himself must impress upon the masses that their aversion to the rich is suicidal, as their livelihoods will always be generated and maintained mostly by the private sector and not PSUs.