It’s Not The Economy, Stupid…It’s Us…

The remarkable thing about our fine country is, we always have someone else to blame for our woes. Of the taps are dry, blame it on the Government; if there’s a callous traffic incident, blame it on the Government; if there’s an issue with paying your taxes, blame it on the Government. In many ways, we are the Republic of Whiners. And the people who whine the most are the ones that have often misused every iota of benefits accorded to them. They will be the ones who’ve tried to evade every possible law and then make it out to be an issue of ‘Ease of Doing Business in India’.

Our economy is not in the finest of health but then to blame the Prime Minister (some have even gone decades back to blame Indira Gandhi for nationalizing banks) and his Council of Ministers alone is silly. The truth of the matter is that some so-called star industrialists took this country for a ride for far too long and escaped both probity and scrutiny because they had the right friends in the right places. And these friends included pliant ministers and bureaucrats. There were weekly Delhi visits by many to ‘get their work done’: we were the capital nation of crony capitalism. The courts were lax in delivering their verdicts and the mechanism to punish errant economic offenders was just not in place. Today it has changed. But then many are still in denial. They call it creating a state of fear. But what would they rather have? No fear of breaking the law? No fear of criminality? No fear of going to prison of your actions were blatantly deserving of a prison term?

On my part, any economy’s strength lies not in how its capital markets perform or just random GDP numbers but instead because of the process of law. That to my mind, is the edifice on which honest and robust economies are built. Corporate India must stop whining about the fear state and instead look inwards. Banks were run like family posts. No accountability because it was ‘other people’s money’. Promoters swindled investors and shareholders and built gilded cages for themselves without any fear. We in India keep talking about Rural India and how it is (and will be a major driver of economic growth) and yet there were leakages and spillages without even adequate infrastructure. That changed in the last few years under Modi and is it all hunky-dory now? Of course not. But then why would you expect both material and behavioral change in 5 years when you allowed this depravation and regression to continue for almost 70 years? Some media outlets that today cry foul because they too are under the scanner gave awards to the same bunch of people including those who today languish in jail not because they were the epitome of corporate governance but because their PR machinery and media collusion was adequate to put the sheen on them. A veneer built at the cost of a hapless nation.

All of that is slowly changing. More and more errant promoters are fearful of losing their Empires and are hence cleaning up their act. More Bank Chairpersons know that it’s not a phone call but instead exacting due diligence that must drive their decisions to accord loans to industry. Government minsters have replaced patronage with performance and they realize Modi is not the kind to easily forget and forgive. Hence what we are seeing is the not a slow down but a course-correction.

If we are true citizens of this country we will brace for this and bear the short-term pain with a grin. Not a grimace. Because we were the ones who caused it in the first place. And only we can ensure that going forward, we are an economy by, of and for the people. And not for a handful of connected people.

Suhel Seth

Guest Author The author is Managing Partner of Counselage