Sunday, 5 August 2007

The new devil

The Telegraph,

Sunday, 8 July 2007

From coast to coast, companies are being viewed as greedy, grasping and evil. Seetha examines why this is happening

In the July 3 episode of television serial Viruddh, the scion of a business family is trying to get workers in his factory to end their strike. Amidst the heated exchanges, a young girl steps up. "If you rich people get out of your air-conditioned homes and cars and see the plight of the workers, may be you won't talk like this," she fumes.

That same morning, television was airing some real life images. Kerala chief minister V.S. Achuthanandan was raging against Tata Tea, accusing it of running a parallel government in the idyllic hill town of Munnar as he went about 'reclaiming' what he alleged was government land taken over by the company, and personally dismantled Tata Tea signboards. Days before, his government had hinted at plans to cancel three licences already given to Mukesh Ambani's Reliance Retail chain. Some months earlier, Tamil Nadu's PMK party had made similar demands and Reliance Retail outlets were vandalised in Ranchi, in Jharkhand.

Suddenly, big business seems to have become the villain of society. And predictably, politicians are mining public hostility to serve their own ends. So while mass movements are gaining ground against large industrial projects in West Bengal, Orissa and Jharkhand, political leaders from Bengal's Mamata Banerjee to former Prime Minister V.P. Singh in Uttar Pradesh are protesting the diversion of agricultural land for special economic zones (SEZs) and industry use. The CPM has drafted a note on how to curb organised retail chains and Prime Minister Manmohan Singh has been agonising over huge corporate salaries, advising industry that "profit maximisation should be within the bounds of decency and greed".

All this invokes a sense of déjà vu. In the 1990s, some politicians, activists and captains of Indian industry railed against foreign investment. One well known industrialist privately forecast that the East India company was back - most Indian companies would soon be owned by foreigners. But the Foreign Devil now appears to have been supplanted by the Evil Industrialist. Fumes Medha Patkar of the Narmada Bachao Andolan and coordinator of the National Alliance of People's Movement (NAPM): "It is profit over people. Industry is ruling the country, manipulating laws to serve its own interests."

Perhaps. But psychiatrists say that the sudden and fierce animus towards industrialists - not from do-gooding activists, but from the people at large - probably goes deeper than that. "As a nation we go through so much stress and strain that we need a villain to vent our spleen on," says Sabyasachi Mitra, consultant psychiatrist at the Calcutta Medical Research Centre.

To be sure, businessmen have always been viewed with suspicion by Indian society. Notes J.R. Ram, a psychiatrist at Apollo Gleneagles Hospital, Calcutta, "As a nation we have always been wary of people who make money. Our traditional middle class socialistic mentality makes us think that industrialists make money by evil means and are usually corrupt."

Industrialists are also viewed as an unduly pampered lot. Says Amita Baviskar, associate professor at the Institute of Economic Growth, Delhi, "There is a sense that everything is being done from the point of view of whether it suits India Inc or not." Expertise, experience, environmental impact do not seem to be the criteria when large companies are given resources or concessions, laments Patkar. A study by the National Institute of Public Finance and Policy showed that tax exemptions were a huge drain on the exchequer. Yet there has been no attempt to phase them out. The revenue lost due to tax exemptions and tax preferences to industry and business is Rs 1,46,966 crore. Of this, revenue foregone under corporate income tax alone is Rs 57,852 crore.

If big business is viewed as being greedy it may also be because companies are not perceived as being socially responsible. Says CPI leader Atul Anjan, "The corporate sector has completely forgotten its social responsibility and is ignoring the social reality."

Adds sociologist Prashanta Ray, "There is a perception in some quarters that industrialists are not doing enough for social causes. This leads to resentment and makes people think of them as villains."

Still, Rahul Bajaj, chairman of Bajaj Auto and one of the leading lights of the Bombay Club which had lobbied against foreign investment in the 1990s, sees some merit in the hostile attitudes. "People are beginning to become more conscious of their democratic rights," he says.

But he doesn't think there is an anti-industry pattern emerging, though he's irked by the fact that private sector has become a dirty word since the United Progressive Alliance came to power with Left support three years ago.

Certainly, the wave of hostility against big business often appears to be the result of a coming together of personal agendas, lobbying by interest groups and ideological concerns about displacement of people.

In Kerala, for instance, the Munnar operation and the steps against retail chains could be the outcome of factional CPM politics. "Factionalism in the party takes the garb of ideological battles, but reducing it to just that would be totally off the mark," says a state minister. "We welcome big industry, but are against an untrammelled laissez-faire approach. They can't violate laws."

In Bengal, the protests against the acquisition of land by the state government for the Tata Motors plant at Singur and a chemical hub (to be relocated now) to be developed by a consortium led by Indonesia's Salim Group at Nandigram are being dismissed as politically motivated. "The protests began even before there could be discussions about rehabilitation and continued even after it was decided to shift the chemical hub project from Nandigram," points out CPM leader Nilotpal Basu.

In Orissa, land acquisition problems have delayed Korean steel major Posco's $12 billion steel plant near Paradip, the largest-ever foreign direct investment proposal. Though London-based Vedanta Resources' alumina refinery and bauxite mining project in Lajigarh in Orissa hasn't faced blockades, there is resentment about displacement of people and the likely environmental damage, a charge the company calls completely unjustified.

Bajaj feels the resentment stems from the fact that the government is acquiring land for the private sector. "Let the private sector acquire land on its own," he declares.

Some companies are trying to talk to people directly and make them see the benefits of industrialisation. Posco, for instance, is addressing small group meetings in project areas, talking about the benefits of the project. Local recruitment and alternative employment opportunities are high on the agenda of most companies, supplementing the compensation given by state governments. Vedanta, Posco and Tata Motors are providing houses, schools, drinking water and roads in their project areas. All three are also training or helping train local youth. Posco is offering 200 acres of alternative land for betel vine cultivators displaced by the project. "The local people understand and appreciate our efforts, not the NGOs," complains C.V. Krishnan, a senior executive at Vedanta.

Retail is another sector where emotions ride high and where even India Inc has an ambivalent stance. "There will be resistance when incumbents are displaced," says Kishore Biyani of Pantaloons fame, referring to the corner shops on whose behalf the battle against organised retail is being waged. Bajaj isn't entirely critical of moves to regulate retail giants. "We don't want socialism but a market economy doesn't mean the Wild West. Big fish eating small fish is unacceptable in a democracy," he declares.

Industry is not entirely without sympathisers, though. "Some industrialists are tying to bring in everything under their control but it is not fair or right to categorise all industrialists as villains," says Ashok Ghosh, general secretary of the All India Forward Bloc.

Support has also come from unexpected quarters.

On 3 July, a group of protestors was blocking a highway in Orissa. It demanded action against opponents of the Posco project for ostracising 42 families that supported it.

A month earlier, farmers from West Bengal's Burdwan district had offered 2500 acres for an industrial hub in the area. What they want in return is compensation and jobs.

There seems to be hope, after all, for India Inc.


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