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Rift Between Indian Big Business and Government is Boost for Modi


When Indian Prime Minister Manmohan Singh arrives in China today he’ll bring with him some of India’s top businessmen. In a joint speech with Xi Jinping he’ll also address the second annual India-China CEO Forum. Along with border issues, business is the most important item on the agenda for Singh’s visit. But back home, Indian business leaders criticize Singh and his government with increasing frustration for being anti-business.

The mood among Indian executives is dour. According to a recent poll, an overwhelming number (73 percent) of Indian businessmen prefer Narendra Modi, the opposition candidate for PM in next year’s elections, to whomever Singh’s Congress Party eventually chooses as its candidate. “Pity the titans of corporate India,” writes James Crabtree in the Financial Times. “They stand becalmed by an economic slowdown and beset by anti-corruption investigations. Their frustration with India’s lacklustre government is clear. Many wait quietly for the saviour they hope will arrive after next year’s elections: opposition leader Narendra Modi.”

The current administration in Delhi has struggled recently for a vision to revitalize Indian businesses and the economy. Several investigations unearthed evidence of wrongdoing in the government’s relationship with big businesses, several of which were definitely up to no good. But those scandals prompted Indian politicians to pull away from controversial decisions where it might look like they were favoring one interest group or company over others. Recently, an investigation targeted Kumar Birla, the head of one of India’s most successful companies, who is seen as one of the country’s most reputable and respected businessmen. Other executives then asked each other, “If they are going after him…are any of us really safe?” Meanwhile, international investors are pulling out of India one after the other while GDP growth has slipped to the lowest level in years.

In his home state, Gujarat, Modi is famous for being pro-business. Support for him from the business establishment across India is becoming stronger as executives grow increasingly disillusioned with Congress. But even if Modi wins next year, he can’t fix everything. Early polls suggest he would preside over a fractured coalition, unlikely to be able to make serious structural reforms to the Indian economy. There is no way to know if he’d be able to bring his successful Gujarat model to the country at large.

[Photo courtesy of Getty Images.]

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  • Jacksonian_Libertarian

    The Great thing about a Democracy is its flexibility due to frequent changes in leadership. Where a Monarchy, Dictatorship, or One Party State, will see unchanged leadership in power for decades, a Democracy can see significant changes in only a few years. India clearly needs to get rid of a lot of dead wood anti business regulation, blocking foreign investment, business expansion, and entrepreneurial start ups.

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