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Business News/ Opinion / Online-views/  In Narendra Modi, big money backs the wrong man in India

In Narendra Modi, big money backs the wrong man in India

The rise of Modi seems much less inevitable after the stunning performance of the AAP in Delhi state elections

No one seems to have more influence and prestige among Narendra Modi’s boosters, though, than India’s richest businessmen. Photo: Mint Premium
No one seems to have more influence and prestige among Narendra Modi’s boosters, though, than India’s richest businessmen. Photo: Mint

There is a great, virtual storm blowing through India today, and the most frantic people in the country seem to be those trimming their sails to it. I refer to the shrewdly concerted campaign to make Narendra Modi seem like India’s natural and inevitable leader—a veritable miracle worker who, emerging triumphant in elections due by May, will raise despondently low growth rates and restore the country’s pride and international reputation.

The chief minister of Gujarat is trailed by accusations of his complicity—and that of his closest aides—in the massacre of hundreds of Muslims in 2002, and barred, consequently, from travel to the US It is far from clear if Modi can jettison India’s unique model of collaborative capitalism and unleash entrepreneurial energies in the stagnant manufacturing sector, let alone push through much-needed investments in infrastructure and agriculture.

Furthermore, three months is a long time in politics. The rise of Modi seems much less inevitable after the stunning performance of the Aam Aadmi Party (AAP) in New Delhi state elections. Even a favourable recent poll puts Modi’s Bharatiya Janata Party (BJP) at least 80 seats short of a majority in the Indian Parliament; a BJP-led coalition may prove to be even more inefficient than the tottering regime under current Congress Party Prime Minister Manmohan Singh.

Nevertheless, Modi already seems to have been anointed in many moist eyes as India’s redeemer. The perception is a triumph of network power, involving chieftains of sectarian religious groups, politically ambitious columnists and corporate-owned TV anchors as well as the public-relations firm APCO. Armies of cyberthugs rampaging through Twitter and the comment sections of online articles have synergistically contributed to it as much as the man himself with his superb oratory and admirable hair transplant.

No one seems to have more influence and prestige among Modi’s boosters, though, than India’s richest businessmen. As The Economist put it, “Private-equity types, blue-chip executives and the chiefs of India’s big conglomerates all think he can make the trains run on time."

“If he says it will be done, it will be done," Ratan Tata has asserted. At the Vibrant Gujarat business summit last year, Mukesh Ambani, the chairman of Reliance Industries Ltd, proclaimed, “In Narendra bhai [brother], we have a leader with a grand vision." Ambani’s younger brother Anil added to the moment of fraternal bonding by hailing Modi as a “leader among leaders, a king among kings."

It shouldn’t be hard to understand this cheerleading—or, as The Economist put it, “creepy sycophancy." For a long time foreign investors preferred China’s business-friendly environment—easily acquired land, low wages, nonunionized labour—over India’s inept and venal bureaucracies. Modi, whom I have described elsewhere as “the primary Indian exponent of capitalism with Chinese characteristics," is adept at cutting through regulatory systems, seizing land, building infrastructure and offering other concessions to big industrialists.

It is not surprising that Ford Motor Co. and General Motors Co. have flocked to Gujarat, and that Tata has only praise for Modi. The Hindu nationalist famously rescued Tata’s cherished small car (Nano) project from the intransigent fury of dispossessed farmers in West Bengal by texting him an invitation to build his factory in Gujarat.

But can we plausibly credit tycoons with political sagacity? Neither the trust-busting Republican Theodore Roosevelt nor the New Dealer Franklin Delano Roosevelt thought much of their collective wisdom. Confronted in the 1930s with the hostility of the American League, which Alfred Sloan Jr. of General Motors and members of the Du Pont family supported, FDR denounced what he called “selfish big business." He warned the American public that large corporations were prone “to consider the Government of the US as a mere appendage to their own affairs."

Recent history shows that the tendency to seek profits wherever they are found, regardless of political circumstances, has consistently led to awful misjudgments. The modern technocrat is not trained to see that the ability to make trains run on time may be part of a much less commendable zeal for authoritarian control. As James W. Prothro noted in “The Dollar Decade: Business Ideas in the 1920s," many American business leaders thought fascist Italy “the most creditable development in human history" and Mussolini, the original maestro of punctual trains, “a fine type of business executive."

Scholarship has altered the Marxist caricature of bloodthirsty capitalists bankrolling Hitler’s rise to power. But, as the American historian Fritz Stern has argued, businessmen in Germany “shared with other members of the German elite a nondemocratic bias, a remarkable degree of political illiteracy" and “a self-assured civic amorality."

General Motors remained deeply invested in Germany’s heavily militaristic economy long after the Nazis had revealed their fangs. In April 1939, Sloan, chairman of the GM board, summarized his political indifference in a letter to a stockholder: “To put the proposition rather bluntly, such matters should not be considered the business of the management of General Motors. … An international business operating throughout the world, should conduct its operations in strictly business terms, without regard to the political beliefs of its management, or the political beliefs of the country in which it is operating."

As it turned out, what was good for General Motors was not good for America, or indeed the values of free societies everywhere. “It is easy to see," as The Economist has written, “why firms are drawn to pragmatism." But the purely pecuniary motive is not the same as sound political instinct. And shareholder value, even if boosted across several quarters, will not outweigh posterity’s damning judgment on all those guilty of a lethal abdication of moral responsibility. BLOOMBERG

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Published: 10 Feb 2014, 08:52 AM IST
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