Telling it like it is

She only asked you to come and see her; she didn't ask you to crawl."

This was the rather blunt comment from the managing director of a leading corporation to a press baron whose newspapers had been distinguished by their pusillanimity towards the Emergency after he met Indira Gandhi.

Twenty-nine years later, that comment came forcibly to mind when businessmen and industrialists offered their comments on Finance Minister P Chidambaram's Budget.

Off the record, most of them readily admitted that Budget 2004-05 was well below expectation, if not retrogressive in some respects. Outwardly, the attitude bordered on the unctuous.

Every businessman paid politically correct obeisance to the focus on education, health, drinking water, the poor, and so on and so forth. Yes, they intoned, the education cess was a great thing, and of course they were willing to pay it in the interests of India's greater literacy. But the much-discussed issue of the quality of spending went largely unmentioned.

This dichotomy was even more noticeable at the routine post-Budget meetings with the finance minister hosted by the two major industry lobbies, CII and FICCI.

Industry had many serious and legitimate grievances--transaction tax, inverted duty structures, growth incentives, and so on. But all of this was so wrapped in bales of fulsome praise that the finance minister could well have been forgiven for thinking India Inc had no major issues with Budget 2004-05.

It was an attitude that attracted the attention of noted economist Surjit Bhalla. In his Budget analysis, he commented, "I find the almost universal reaction of industrialists (interviewed on TV) to be very positive on the Budget. They are positive on every Budget. And that is the problem. There must be tremendous distortions in the economy, and tremendous power of the politician/bureaucrat, that makes such learned people cringe in sycophancy. Why are they afraid of telling it like it is?"

Why, indeed? After all, even accounting for the admittedly incomplete nature of reforms, the government has largely withdrawn from large swathes of business activity.

If a charitable explanation were needed to explain the sycophancy of the newspaper baron mentioned at the start of this piece, it could be said that he was dependent on government-mandated newsprint quotas. Today's businessmen operate under no such constraints.

Certainly, when The Strategist asked industrialists and businessmen on their attitudes to rate the progress of economic reforms (December 30, 2003), the overall grade was C+ --not great, but no major complaints either.

Most recorded rated as "good" or "satisfactory" such things as the ability to get petty clearances for power, water and so on, or to deal with labour. Significantly, on issues such as "the need to lobby central and state governments", almost a quarter of the sample said things had improved, and a third said the situation was "satisfactory" (note that the ratings were taken off the record to ensure accuracy).

If almost 60 per cent of businessmen were ready to admit that they needed to lobby the government less, why were they so irresolute when it came to openly criticising the government on perfectly legitimate grounds?

If anything, India Inc now has more than enough mettle to hold its own with the government and it is well within its rights to do so. If India is on the global map today as a significant sourcing destination not just for IT services but manufacturing too, it is because of the speed with which domestic industry has adjusted to global competition and transformed itself.

Business process outsourcing, IT, the diamond-processing business, auto components and automobiles have all flourished without noticeable government assistance. 

True, the government has helped industry by receding from the scene, but it is still far from providing the constructive enabling mechanisms that would catapult India into, say, the China league.

Given Indian industry's admirable track record, surely it is in a sufficiently strong bargaining position to offer the government more candid and realistic opinions and assessments?

In his article, Dr Bhalla was making the larger point that reforms probably hadn't dug in deep enough yet to weaken the power and influence of politicians and government officials. This is probably true. But given its own achievements, it is still a mystery why India Inc should be so hesitant about telling the government like it is.