Yashwant Sinha has put the roll-back days behind him. In his second term asfinance minister in the BJP-led coalition government, he has begun to asserthimself, sending the message, twice, that he is no longer the Sinha whobuckled under pressure. The first time round, Ficci, along with Assocham,sought to get the finance minister to pull up the financial institutions(FIs). The latter had announced their intention to sell their equity stakein companies whose recalcitrant controlling interests did not add toshareholder value.Obviously, such FI sales would put a new controlling interest in the saddle.Ficci-Assocham had petitioned the finance minister in New Delhi. He wasreminded of it at a Ficci seminar on second generation reforms in Calcuttalast week. Sinha responded admirably: FIs were taking commercial decisions,so there was no question of intervention; and if the FIs feel that they aretaking a good decision, ``who am I to ask ?'' Wise words. Ficci attracted asecond rebuff when it asked for industry's right to hire and fire labour.
Sinha's point was that ``employment creation'' had not increased during thefirst episode of reform - voluntary retirement had increased the numbers ofthe jobless, and, therefore, labour reforms have to accompany rapid creationof employment opportunities in the services sector and in theknowledge-based industries. Flexible labour norms will have to wait.
The Ficci-Sinha interface throws up an interesting question: how aware isIndia's organised business of the current socio-economic milieu? Not justFIs, the rapidly growing tribe of mutual funds which invest public funds inequity too are not sanguine about corporate governance. What has Ficci tosay about the phenomenon of the growing personal wealth of controllinginterests of sick companies? It does not need a Sinha to tell big businessthat the right to hire and fire is feasible only in prospective near-fullemployment conditions; and that firing would create problems in an economywhere the proportion of the poor has reportedly risen by 2-3 percentagepoints after 1994, unemployment is rising in the rural areas (Bimaru states)and many small industrial units are downing shutters.
Ficci, Assocham et al must introspect why growth under reform has notsimultaneously led to rapid investment and high employment and why reformhas not improved corporate governance. Before pressuring the government toserve the narrow interests of the wealthy, associations of big business mustlearn to ask how reforms will serve the common man. Old-style lobbying hasno place under reform. Sinha is right in ticking them off.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.