Economy

Culture of abusing private sector no longer acceptable

As a former small business owner, I welcome the statement made by Hon’ble Prime Minister of India Mr Narendra Modi in Lok Sabha (Lower house of Indian Parliament) on the 10th February 2021.

Irrespective of politics, Indians need to stop being hypocritic about #private sector. Let me add, #India needs a healthy public sector in strategic areas as well. It is not either-or, it is about the right mix and ensuring both are healthy.

Highlight from the speech

// Prime Minister Narendra Modi on Wednesday stressed on the private sector’s vital role in the economy and asserted that the culture of “abusing” it for votes is no longer acceptable.
If the public sector is important, the role of the private sector is also vital, he said during his reply in Lok Sabha to the discussion on the motion of thanks to the President’s address.

Noting that wealth creators are a necessity for the country as only then wealth can be redistributed to help the poor, he wondered what can be achieved by handing over the nation to “babus” (government officials).

“If our babus belong to the country so do our youngsters,” the Prime Minister said. //

My take on this

Not all public sector companies are the same. Some do phenomenal work for nation-building, yield dividends for the treasury which is then distributed to the poor. There are many PSUs which have outlived their time and place.

Similarly, not all private companies are evil empires that crush the poor and exploit their workers. A significant portion of private companies are small and medium, who are struggling to survive every single day.

In the past, I have written about Small businesses being the backbone of the Indian economy. Quoting from that article which is based on 2014 data:

  • Over 90% of employment in the country is generated by small businesses;
  • Contributing over 45% to nations GDP vs 15% from corporate sector;
  • 62% owned by ST/SC and OBCs;
  • in total, about 5.77 crores are small businesses.

Continuing, I had written in the past about how in India running a business is most difficult.

Shriram Group chief and Padma Bhushan awardee, Mr R. Thyagarajan had said in February 2013: “The most painful experience is being in business in India. The ease of doing business is one of the worst in India. The difficulties and pains associated with doing business is probably the highest in India as opposed to most other countries”

Whenever politicians berate private companies, or raise taxes, or make it difficult to do business, the pain they cause for the Tatas, Reliance, Adanis are minimal; they are actually hurting the small businesses the most and leaving them bedridden forever.

In my view, Parliament should ensure there are free and fair regulators for individual sectors, then ensure the Government stays as far as away from businesses. The courts have to make sure none of the laws are broken by the concerned parties.

I hope the statement in the parliament by Hon’ble PM marks a shift in the public and Government’s perception about private businesses which are wealth creators of the nation. Let countless small businesses blossom in our nation and lift all Indians to prosperity.

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