India Unbound by Gurcharan Das

Author:Gurcharan Das
Language: eng
Format: epub
ISBN: 9788184758504
Publisher: Penguin Books Ltd
Published: 2007-12-16T18:30:00+00:00

My questions emboldened an American businessman to get up. He said, “My issue, Madam Prime Minister, is with the government’s insistence on limiting foreign ownership in companies to 40 percent. Consequently, multinational companies have lost interest in India. And your country is neither getting investment nor technology.”

Mrs. Gandhi sniffed the air. Her advisers began to get impatient. “We want to be self-reliant,” she said. “Our foreign investment laws have parliamentary sanctity. We want multinationals to bring technology and we permit them 51 percent foreign equity. We don’t want multinationals to sell Vicks VapoRub, like our young friend here.” She looked at me and there was more laughter.

With great charm, on the spring morning, amidst shining marigolds, Mrs. Gandhi had attempted to preserve three myths of the ancien régime—the value of licensing, the importance of high taxes, and the need to limit foreign investment. As I was leaving the PM’s house, an elder statesman of industry nudged me and whispered, “Watch it, young man!” I turned around, but he was gone. Since it was a nice morning, I decided to walk. I walked along the wide, tree-lined avenue towards Raisina Hill and past what André Malraux had called the “colossal vistas of red sandstone with Sikh guards presenting arms in the solitude.” Malraux was right. It was only the departure of the British that had given this soulless architecture some sort of soul. It seemed to become great only when it became a tomb of the Raj in a city that had a surfeit of tombs. It seemed right that it was Mrs. Gandhi with her old myths who presided over these tombs like a grand priestess.

I asked myself why she could not see what I saw. The sheer number and diversity of enterprises in India backed by vast human energy and talent was so impressive. From the largest, Tata Steel, to the millions of artisans, wholesalers, and street vendors, I saw a deep source of strength not available to many other economies. We had the sophisticated underpinning of trained managers and professionals and a capital market, with ready availability of specialists in advertising, audit, and legal services. Linked to it was a formidable diaspora of nonresident Indians who could mobilize capital and knowledge of overseas customers and markets. Yet India failed to perform. Alas, it was precisely because of the attitudes I had observed that morning. We were shackled by the excessive regulation of a heavy-handed state which was suspicious of profit yet happy to seek rent; this, combined with protection and fear of foreigners, had left a weighty legacy of uncommercial habits. How long would we stand and watch our talents and our strengths consistently undermined?

The economic reforms came in 1991 and exploded Mrs. Gandhi’s myths of the License Raj. With the scrapping of licensing our foreign exchange reserves did not decline. The Indian entrepreneur, freed from control, responded with new investment. Lower taxes did not destroy government revenues. Competition ensured that lower import and excise duties were passed on to consumers.

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