COVER STORY

'Stability is essential for the economy'

Gaurav Swarup is deputy managing director of Paharpur Cooling Towers Ltd, a Rs.165-crore turnover company involved in the manufacture of process cooling equipment - cooling towers and air-cooled heat exchangers; flexible consumer packaging and plastic woven packaging. In an interview to Suhrid Sankar Chattopadhyay, the former president of the Indian Chamber of Commerce and Industries outlines what big business looks for in terms of political outcome.

What does big business want in terms of political outcome?

Stability. Why just big business, any business wants that. Stability is essential for the economy, and nobody likes uncertainty. Because of political instability, a lot of long-term plans have to be shelved, and short-term plans have to be made to make d o with the situation. This is neither good for business, nor is it good for the economy.

How far have the verdicts in the last four elections contributed towards providing stability in the policy environment - in terms of tax rates, currency parities, and industrial regulatory framework?

There are no problems as far as policies are concerned. The policies have all through remained the same. It is the implementation of the policies by the different governments that provides a sort of instability in the policy environment. It was during th e Narasimha Rao Government that there was stability in the policy environment, as far as policy implementation was concerned.

Which party is perceived as being the best equipped to deliver on these counts, and why?

I feel there are only two parties that can deliver these desired outcomes - the Congress(I) and the BJP. I feel these are the only two parties that can provide political stability.

Is the direction of economic deregulation and liberalisation appropriate? Is there a need for acceleration, or should the pace be tempered to take into account the vulnerabilities of the Indian industry?

The pace has to be tempered. Indian industry has been told to restructure itself. But where has it been given the tools for restructuring? One is faced with problems if one tries to cut down on one's workforce, inefficient plants cannot be shut down, and so on. This as a whole is not good for the Indian industry.

Is a limited degree of protection seen as essential in the context of the current industrial downturn?

BY SPECIAL ARRANGEMENT

Absolutely. The Indian industry should be given the opportunity to restructure itself.

Do you feel that there has been a gradual dilution of the partnership role between Indian industry and overseas multinational enterprises?

There is. I feel the overseas multinational companies have realised that they do not really need the Indian industry. They are interested only in the Indian market.

Would it be necessary to regulate the entry of MNCs into certain industrial sectors?

It is necessary to regulate the entry of MNCs in not just industrial sectors, but also non-industrial sectors. If the entry of MNCs is not regulated to at least a certain extent, Indian industry will not be allowed to grow. There are some sectors that ar e relatively new, but have a lot of potential. If MNCs operating in these sectors enter, the Indian companies in those sectors will simply be lost. They have to be given time to become global players.

How has the Indian industry historically related to political parties?

Historically, the two have always been adversaries. Politically, it suited those in power to treat the private sector as their favourite whipping boy. Now things are changing. Political parties have realised that they need the industry and the private se ctor. They have seen that the public sector cannot deliver the goods.

What have been the methods and purposes of corporate donation to election funds? Is the example of transparency in political donations that the Tatas have tried to established worthy of emulation?

I am sure there is not just one method which corporates follow in extending donations to various political parties. The reason why they do it is obvious, for special favours and to ensure that the political masters protect them and their industry. I do n ot think it is a dedication or a strong belief in any particular political ideology that prompts them into doing that.

As for transparency, I feel transparency is always good, but to what extent are the political parties transparent? Transparency cannot be one-sided. Political parties too should be transparent.

Do governments still have some residual leverage from the licence-quota-permit system to induce political donations from corporate houses?

There are plenty of areas for the government to do that, for example, on matters requiring environmental clearance, land allotment, permission to set up captive power plants... there are so many more ways.