So Who’s Buying The Penny Stock On D-Street?

Don’t get taken in by the gleaming, earnest faces of corporate India signing up to join India’s latest political newbie. There’s a growing disquiet in India Inc on the unexpected rise of AAP, and its initial steps in Delhi. As things stand, AAP threatens to upturn an old nexus between business and politics to get things ‘done’ in India. For it is common knowledge that big business routinely manipulates, funds and takes advantage of political leaders at all levels to extract favours—from getting cheap land to concessions and exemptions.

On the face of it, big business is saying that AAP’s presence in the government in New Delhi and its probable national prominence will bring more transparency. But secretly, many of them resent it. As the chairman of an influential business group explains on the condition of anonymity, “Many in business take their relationship with politicians for granted and find it quite normal to get favours against funding. These people will be affected. You cannot seek transparency in the government without being transparent yourself.”

At the centre of the corporate sector’s misgiving is the stated stand of Arvind Kejriwal and AAP against crony capitalism and his crusade against corruption. This is an existential threat to many top private sector companies, many of whom routinely fund political parties. Kejriwal’s attacks on prominent industry leaders like Mukesh Ambani and his party’s recent ordering of an audit of power discoms have not gone down well with the corporate class, who are annoyed and wary.

That’s why many industry leaders Outlook tried to speak to refrained from commenting on the issue. But some experts warned of the tough road ahead. “The relationship between politics and business is always shr­ouded in mystery,” explains Rajeev Cha­ndrasekhar, MP and former FICCI president. “At one level, the businesses that made it their way to profit from politics will now be wary. Whether Indian business likes it or not, there is (going to be) a restructuring of this relationship,” he adds.

Will it be for the better? Experts feel that AAP’s main crusade is against corruption and not against business as whole. “It is only the crony capitalists, who revel in influencing the government and the regulators through bribery and patronage who will find such an app­r­oach unfriendly. In the long run, AAP’s emp­­h­asis on fighting corruption will be investm­ent-friendly,” says former  bureaucrat E.A.S. Sarma.

This is mirrored by Bangalore-based economist Narendar Pani, who argues that different businesses will react differently to AAP. “Some big business that is heavily dependent on government will be wary but not the IT and services industry, which is essentially middle-class-led and speaks the AAP language. Manufacturing industry, which requires government support for land and clearances, will now become Modi-friendly,” he says.

To be sure, there are critics of AAP’s business philosophy. Take Rajiv Kumar, economist and senior fellow at the Centre for Policy Research: “While AAP will not brook crony capitalism or allow anything that breeds corruption and bad governance, its anti-private sector view is most regressive. If that model is allowed to take shape, it will take us back to socialist India, and is making the ordinary investor nervous.”

AAP is also being attacked for contradictions working within its approach. “AAP does not have a comprehensive vision or policy document, everything is ad hoc. It says it has no ‘ideology’; it’s not ideology-driven, but ‘solutions-driven’. It is silent on vital issues like poverty, inequality, social privilege, caste and gender discrimination, and, crucially, communalism,” argues journalist and commentator Praful Bidwai.

At the same time, says Bidwai, elitist elements within the party are pushing for pro-rich policies like ruling out bicycle lanes in Delhi, even though almost as many commuter trips are made in Delhi by bicycles as by cars. Likewise, the plan to scrap the BRT, although it costs 20 times less to build than the Metro. This dichotomy, he feels, gets deeper with businessmen joining in. “This will only make AAP more elitist, as these are ‘free market’ advocates who oppose state intervention and rights and basic services for the underprivileged,” he says.

AAP’s recently announced water and electricity policies are also coming under severe criticism from experts, who feel that these have not been well thought of and will help the rich more than benefit the poor. As Sarma puts it, “AAP’s water assurance will not be sustainable in the long run unless it limits lavish use of water by the affluent households and contains inefficiencies in water distribution”.

Despite such reservations, everyone credits AAP for introducing topics like transparency, governance and crony capitalism in the political discourse. It has its supporters. Says Sarma, “I would prefer such populism to the one that benefits big business in terms of land, power, tax concessions and protection when they break laws”. Clearly, millions harbour anger against corporate India for its various excesses. AAP is tapping into this.

Chandrasekhar points to a study which says that just 10 Indian business houses account for 98 per cent of the Indian banking system’s net worth. These houses clean up all the opportunities, all the capital and the privileges. With AAP making inroads into the system, it is these conglomerates that will have the most to worry.