Big business and the political process

In the late seventies and early eighties, it was fashionable for business and financial journalists to be mildly left. That fitted in with the prevailing political conviction of the time that Big Business was somehow Evil.

To be fair, it was hard not to escape that view-what with the stockmarkets operating in a cosy cabal and business successes largely dictated by the influence business houses wielded in the corridors of power.

As a result, company announcements about "future plans" were treated with suspicion as market-boosting information. At least one news editor I knew never carried these reports if he could help it, unless the paper ran short of news (a distressingly frequent occurrence in those days).

Of course, this began to change by the late eighties as India began to slowly and reluctantly integrate with the world economy. Reporting became less biased and slightly more informed.

Just a decade later, under the surge of economic liberalisation, the situation changed dramatically. Forget about debates over Good and Evil, covering business news was no longer a political choice.

Facts, data and expertise count for everything. One paper's newsbreak on a company's "future plans" is another paper's miss, and woe betide the beat reporter who missed the story. Why, some media houses even started behaving like businesses themselves. Today, 24X7 business news channels mark the apogee of this particular phase of India's business information revolution.

Though the media took a giant step in its attitude towards business, politics took far longer to evolve. Even as politicians thrived on business "donations" and many were pretty shrewd businessmen in their own right, the official attitude towards investors, investment and economic reform remained defiantly negative.

The ostensible explanation was that they were worried about the plight of the "common man" but the cynical explanation was that economic reform would force them to forfeit lucrative sources of income.

Today, however, apart from the Left parties, openly championing investment no longer attracts opprobrium across the political spectrum. Big Business is no longer a sinful visitor but a welcome guest.

Yet, not so long ago in the late nineties, Andhra Pradesh's Chandra Babu Naidu stood out like a beacon. Even as Jyoti Basu and Somnath Chatterjee made fruitless trips abroad to exhort investment in yet another Bengal renaissance, Chandra Babu was astute enough to understand the need to create a more enabling environment for investors and played a key role in transforming Hyderabad into a centre of IT excellence.

Naidu eventually fell on the altar of rural politics and political vested interests-as did Digvijay Singh and the talented S M Krishna for being similarly inclined. Perhaps all three (and Basu) were ahead of their times.

Today, however, political leaders of all hues have swung the pendulum. Thus we have West Bengal's Chief Minister Buddhadeb Bhattarcharya fighting a battle-fully backed by an approving Bengali middle class-with his parent party to transform Bengal into tomorrow's Singapore.

Guajrat's Narendra Modi and Rajasthan's Vasundhara Raje are making similarly robust claims about attracting investment. And, most unlikely of all, here is Bihar's newly anointed chief minister Nitish Kumar now talking of attracting investment in a state in which lawlessness is the law of the day.

Of course, it is not yet clear how much of this will translate into hard votes at the hustings. It is a fair bet to say that being pro-reform still essentially earns middle class approbation because it has been the primary beneficiaries of the fruits of liberalisation.

Even as statistics suggest that poverty levels have dropped, it is equally true that the benefits of liberalisation are yet to trickle down in a meaningful way to larger proportions of the population. Of course, this takes time. But freshly converted politicians run the danger of feverishly embracing free-market economics to the exclusion of all else.

In the long run, the rush for investment at the cost of constructive state intervention in health, education and social infrastructure could be India's biggest stumbling block in its headlong rush for economic supremacy.

The experience of the Asian Tigers showed just how effectively a healthy, educated population can reap the fruits of globalisation. This would be a good point to keep in mind as politiciansstart competing with each other in the investment stakes.