Modiji, you need to be bold, not us

His common plea is that there has been a change in the overall environment for the better in India and thus they must invest boldly and without fear

Mumbai: As the government battles the crisis of a prolonged economic slowdown, the PM has been reassuring the business community from every possible forum and has been fervently persuading them to resume investments into new projects. His common plea is that there has been a change in the overall environment for the better in India and thus they must invest boldly and without fear. He says to them that whichever corner of India that you may choose to invest in, the government will be your companion and not an obstacle. He says that entrepreneurs must invest freely, to create wealth for themselves and for the nation. His recurring emphasis is that entrepreneurs must invest boldly, without fear. The FM has been joining the chorus saying that the government is with them.

It is certainly imperative for the fresh investments to kick in and rekindle the economy, but it has now become a huge uphill task, due to years of neglect by the government. GDP growth has fallen to an eleven-year low. The entrepreneurs are a scared lot today and the continuation of the slowdown, only means that things have not changed for the better, much as our PM claims. The present problems for a small entrepreneur are rooted in the disastrous demonetization, which decimated his business and profits, and that is yet to be restored to come back to the pre-demonetization levels, in terms of sales as well as profits. His capital has taken a body blow and has shrunk and so has his confidence. In the aftermath of the demonetization he has downsized his business and many of those workers who lost their jobs due to this, still continue to remain unemployed. He has also downsized his living, which is reflected in the receding consumer spending of households in India. He presently has diminishing confidence in his future as is reflected in the falling levels of consumer confidence as reported in RBI surveys. And despite his faith in the long term potential of the Indian economy, he is scared and cautious, thus reflecting in his unwillingness to invest afresh.

At such a time, the PM’s call to entrepreneurs to invest boldly cuts little ice. How can the common entrepreneur be a bold and fearless investor, when he finds his vanishing capital at risk, in such a situation? Profits is a far cry, it is the very safety of his capital which is in danger today. The response of a small entrepreneur, which constitutes the overwhelming majority of our business community to Modiji’s appeal is how can I be a bold investor in the business, when:-

1. Laws have become so harsh and are full of penalties and prosecution.
2. Laws are increasingly many and complex and the cost of compliance has shot up.
3. Judicial uncertainty and contingency can kill my business, which even the likes of Vodafone cannot withstand it.
4. Banks are unwilling to give me loans for my business.
5. Policy flip flops threaten to erode my business and capital.
6. The government does not pay my dues on time if I do business with it and also illegally withhold my refunds.
7. My dues are stuck in NPA cases whose recovery/resolution is stuck in the NCLT.
8. Corruption and red-tapism have increased and have not gone down.
9. Your claims of improvement in EODB do not match with ground-level realities, that we face.
10. Doctored statistics of the government only make me nervous and erode my faith in the system.

The responsibility to take bold initiatives that revive the economy is thus in the court of the PM and not of the entrepreneur. Genuine deep structural reforms are needed to restore confidence and revive the languishing economy. With his brute political majority, it is the PM who can be bold in such a situation and not the beaten nervous entrepreneur clinging to his diminished capital and confidence.