The finance minister is doing what financial ministers usually do at this time of the year—meeting businessmen, economists, lobby groups, and others who have wish lists they’d like to see transformed into reality when he presents the Union Budget at the end of next month.
This column isn’t about those wish lists. It isn’t even about the finance minister. It is about a significant change in the attitude of Indian businessmen towards the government.
For much of the Noughties, as we have now decided to call the decade that is behind us, most businessmen and executives had a few refrains of choice about the role of government in business.
“We will continue to do well as long as the government doesn’t interfere,” went one.
“What role does the government have in business?” went another.
Businessmen mouthing such responses also had a few favourite lines regarding the Union budget.
“It is a mere accounting exercise,” was one.
Illustration: Jayachandran / Mint
“The budget is no longer relevant,” was another.
The chief executive officer of a large Delhi-based conglomerate told me recently that while such utterances were indeed common in the 2000s (at least till 2008), you would still have been hard-pressed to find a Delhi businessman?who?said?such?things.
He may be right. Businessmen in Delhi, maybe because of their proximity to and familiarity with the corridors of power, are aware of who calls the shots.
The situation has changed in the past 12-18 months, not just in India, but everywhere in the world.
With governments across the world stepping in to bail out banks and companies, questions about the role of government in business have vanished. Businesses, at least some of them, it is now clear, couldn’t have survived the events of 2008 had it not been for the intervention and generosity of governments around the world. Interestingly, the crisis as well as attempts to tackle it coincided in the US, which remains the largest economy in the world, with the swearing in of a new Democrat President, and the Democrats have always believed in bigger governments and more regulations for business. And around the world, the call is for more regulation, not less.
In India, too, the government acted promptly to mitigate the impact of the global economic slowdown on the country, and recent corporate results indicate the magnitude of the success of its intervention.
These days, businessmen no longer talk about wanting the government to stay out of business. Most want it to stay “in”, as evident in recent pleas asking for a continuance of fiscal measures announced last year to avert a slowdown.
For the first time in a decade, then—maybe even longer—the Union Budget will be presented in an environment where businessmen, even analysts, look at it as a Bill that can change the contours of the Indian economy and industry (I exaggerate a bit, Constant Reader, but surely you get the drift?). Not since the mid-1990s has a finance minister had the luxury of doing so.
Not that this makes the finance minister’s job any easier. If anything, it only makes it much more difficult.