Big Indian business: a persecuted minority

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Sixty years ago, the great philosopher and novelist Ayn Rand gave a famous lecture in which she called big American corporations a “persecuted minority.” Obviously, she overlooked the situation in India, as the persecution of all businesses – large and small, in services and manufacturing across sectors – was infinitely more here than it ever was in the States. -United. Even 30 years after liberalization, which removed some of the worst characteristics of socialism, captains of industry continue to be treated like second-class citizens. This is clear from the treatment reserved for the bosses of Infosys, the Tata group and the automotive sector.

Not that micro, small and medium enterprises (MSMEs) are better treated. An Indo-American entrepreneur, Rakesh Nayak, recently laid out the government’s big claims about the increased ease of doing business in India in a tweet: “Unpopular Opinion: After spending nearly a month in India doing business, I concluded one thing: who lectured me on how India has grown digitally and recently become business friendly are either jobless or never done business or worth nothing.

It has received over 19,700 likes and 500 replies since then. It has been retweeted over 4,200 times.

MSMEs, however, can find some comfort in the fact that at least ministers, ruling party leaders and other politicians do not disparage them. Even the Communists, opposed by their doctrine and their temperament to anything private, favor support for MSMEs.

Big business, however, is a different ball game. Politicians, especially those who lean to the left, routinely portray big business as anti-poor, profit-obsessed monsters who should be on a leash. Even outgoing ministers, supposed to represent a right-wing government, regularly humiliate the biggest tycoons. Great businessmen can be accused of being heartless to the plight of their employees and fellow citizens, merciless in the marketplace, not nationalistic enough, and now even anti-national.

One minister criticizes India Inc for focusing on profits rather than nation building and another harangues the auto industry for not going electric. These verbal attacks are symptomatic of a severely state attitude which, in turn, has real and painful consequences.

Because, in terms of policy, statism translates into strict controls on companies. Not only are regulatory mechanisms made more stringent and compliance more cumbersome and distressing; state intervention tends to enter business decision-making.

A few years ago, the government demanded that a certain amount of profits from large companies be spent on financing corporate social responsibility (CSR). Non-compliance could result in criminal liability. Fortunately, Finance Minister Nirmala Sitharaman announced in August 2019 that the responsibilities would be only civil and not criminal.

But the very idea of ​​mandatory CSR is an abomination; it is indeed the epitome of illiberal welfarism, something that no lover of human freedom can tolerate, let alone support. The first and main objection to this idea is that it represents the brazen desire of the state to control one of the noblest human instincts: philanthropy. The urge to help other human beings is as old as humanity. Over two and a half millennia ago, Prince Siddhartha Gautam, moved by the sufferings of the men and women around him, sacrificed all the pleasures and privileges that his royal status could bring him and became Lord Buddha. He was certainly not responding to a decree from his father to do so.

Likewise, those countless Europeans who gave up a comfortable life to serve humanity as Christian missionaries in Africa and Asia did not do so because of a government diktat. In the last century, large numbers of wealthy young people in the West as well as in India have become communists and socialists, mistakenly believing that their ideologies will make the world a better place. Many American tycoons have made huge donations to create foundations and charities. Indian trading houses also donated to the company. So why should our government force big industry to become philanthropic?

Mandatory CSR is blatant not only because it introduces unnecessary state intervention where none is needed, but also, and more, because it tries to control everything that is personal and private for everything. individual – instincts, feelings, munificence, genuine and spontaneous. altruism. It penetrates into the sacred space of the citizen, of the conscience, and defiles its holiness. It is the colonization of consciousness.

But the dark pink state of India, made up of state politicians and decision-makers entrenched in the system, doesn’t believe companies have a conscience. Since the institutionalized mindset is entrenched against business, the political framework remains hostile to entrepreneurs. One obvious consequence is the price control. The health sector is the most affected; Price caps for drugs and medical devices are commonplace. The pretexts are well known: affordable health care, helping the poor, etc.

However, the powers that be are also interfering in other sectors to regulate prices. One of the most anti-business decisions the Narendra Modi government has taken so far has been the creation of the National Anti-Profit Authority (NAA) in 2017. The aim was to ensure that the consumer benefits from the reduction in the plant’s rate. goods and services tax. The exercise militated against the spirit of liberalization, because every economist, except the lal salaam types, agrees that prices are better determined by the market; politicians and bureaucrats should have nothing to do with them.

The NAA was supposed to have a two-year term. But then, as Milton Friedman said, nothing is as permanent as a temporary government program. The NAA got another two-year extension in 2019.

But what about now, as the extension ends in November? Will the demon die his natural death? Well, not if our political masters have what they want, because the Goods and Services Tax Council is still thinking about the big question of keeping the NAA alive. One proposal that is circulating is that it could be merged with the Competition Commission of India (ICC). Evil is conquered only in fiction, not in reality.

The moral of the story is that some things do not change in India; anti-business attitude is one of them. Not surprisingly, India Inc remains a persecuted minority.



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Disclaimer

The opinions expressed above are those of the author.



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