Even if belatedly, the leadership of the BJP has begun to differentiate itself from the Congress Party which ruled free India for over half a century during which it grafted inorganic socialism learned by Jawaharlal Nehru, post-independence India’s first prime minister in fashionable drawing rooms of the idle rich in Bloomsbury Square, London, upon the Indian economy. Replying to the motion of thanks to the President’s address to Parliament on February 10, prime minister Narendra Modi unequivocally spoke up for private enterprise and the country’s private sector industry leaders and entrepreneurs. “The culture of abusing the private sector is not acceptable. We cannot go on abusing our youth (sic) like this,” he said highlighting the role of private pharmaceutical companies which have made worldwide impact, and private telecom companies which provide the world’s cheapest connectivity. On February 24, he went one better. “Government has no business to be in business,” he said.
Such unequivocal public declarations in favour of private enterprise and entrepreneurs has never been made by any leader of the Central or state governments during the past half century and is music to your editor’s ears. The assertion that the business of government is governance and not commerce, was continuously reiterated by your correspondent as founding editor of Business India and later Businessworld (1978-87).
Presumably to some effect because when P.V. Narasimha Rao was appointed Congress president and prime minister in 1991, post-independence India’s notorious licence-permit-quota raj was substantially dismantled. Industrial licensing and monopolies legislation was rescinded and greater freedom to conduct business was conferred upon private sector industry. The impact of the landmark economic liberalisation and deregulation of 1991 was dramatic and immediate. The annual rate of GDP growth, which had languished at a rock-bottom 3.5 percent for over four decades, more than doubled to 8.5 percent for the next two decades and has levelled off at 5 percent.
Therefore when the BJP was swept to power at the Centre in 2014, the general expectation was that it would accelerate liberalisation of the economy because of its pro-business credentials and because it is unencumbered by the socialist legacy baggage of the Congress party. But in its first term it queered its pitch with the ill-advised currency demonetisation experiment which proved a disaster. However even if belatedly, its leadership seems to have seen the light.
The plain, unvarnished truth is that post-independence India’s persistence with neta-babu socialism and pervasive licence-permit-quota raj has been an unmitigated disaster which has ruined the modest material aspirations of two generations of free India’s citizens. Foolishly Congress party leader Rahul Gandhi continues to demonise “suit-boot” businessmen. But for their taxes and job creation India’s children won’t have a snowball’s chance in hell. Now it’s time for prime minister Modi and the BJP to walk their belated talk.