Even as Narendra Modi made a highly visible trip to the US last week, a family in Dadri lost a father to a lynch mob who accused him of consuming beef. His badly beaten up son landed in hospital. In the wake of recent killings of rational thinkers, as well the 4 day ban on meat in Mumbai due to a Jain festival, coupled with loose statements by members of the Modi government on women and communities has certainly not been good for India’s image. These events have prompted celebrated author and niece of Jawaharlal Nehru to return her Sahitya Academy award protesting the climate of intolerance and called attention as to why one of the best political communicators in decades does not reign in the loony right.
Will these events translate into a real impact on business sentiment and investments into India? PRmoment India finds out.
Impact on Investments to India
Supriyo Gupta, CEO, Torque Communications believes that the unfortunate reality is that, “Irrespective of our personal reaction and revulsion to a the developments – beef, murders, inane remarks about the status of women and so forth – we need to objectively assess whether business looks at the same parameters while investing.”
Gupta says that two hard examples would suffice to demonstrate this, “ Gujarat under Narendra Modi was harshly judged on almost every count both by Indian and Western media and audiences. Yet, Gujarat attracted strong investment flows, provided a good environment for business, took decisions fast and managed to create India’s strongest energy economy. Right through, the Chief Minister was challenged by a continuous barrage of accusations and the United States denied him entry till he was elected Prime Minister over a decade later.”
Adds Gupta, “Secondly, China has never been the prettiest of pictures when it comes to issues of human rights, tolerance and treatment of minorities. Yet, global investment flows into the country have been unmatched, consistent and on Chinese terms.”
Gupta clarifies that, “In effect, business does look at issues of social unrest, authoritarianism and issues of human rights. However, business at its core is only interested to the extent that the negative PR impacts its own reputation or ability to do business freely. If that sounds cynical, it really isn’t. All the European countries which have held high moral ground on issues of human rights are unlikely to have a single product on their shelves which is not sourced from China.”
Nitin Mantri, president PRCAI and Avian Media founder –CEO avers that India remains a reasonably hot destination for business. Mantri adds, “ The current campaign by the PM to woo business in the US has been a success. Of course, if such incidents continue chances are we will be looked upon as an intolerant country. But that will impact India’s overall image and not just investment prospects.”
Gupta feels that the bigger drawbacks continue to be the fact that the business world has lost trust in the so-called “India Story” that had them pumping in millions in the past decade only to find a moribund government, weak policies and a government at war with itself. “
Says Gupta, “Defense, infrastructure, real estate are a few sectors that starkly show the debilitating overhang of the last government. Business leaders land up to dance and preen at the Modi roadshows – but none has really dived deep into their pockets. The only way that is going to change is if the government hands out some really large orders in a quick, transparent fashion. Beef or no beef, the real issue is that business still doesn’t believe that we have changed too much and we are still selling dreams.”
Will the current climate impact ‘Make in India’?
Gupta feels that despite the shame all of us as Indians should feel about such acts, it would have absolutely no impact on either ‘Make in India’ or Digital India.
He says, “It may offend the liberal media and the Indian at heart but I don’t see business looking at it from that perspective. The biggest PR threat to both is if the realization dawns 18 months later the government is still floundering. There is already a sense of desperation that investment stays more promise than real flows.”
Is Modi PR handling of the situation working?
Respected figures such as Nayantara Sahgal have commented on Modi’s silence on the Dadri lynching as the opposition has put Modi on the mat for his failure to reign in the extreme right in his government.
However Gupta points out that, “ I don’t think starting an internal party fight to rope in the fringe within his own political spectrum is high on his priority. He will probably speak once in a while but it is more likely that he will follow the ‘Gujarat model’ – drive benefit to people and they will keep voting you back. Forget the carping liberal hoards. From a PR point of view, he will probably make enough noise where required in business gatherings but he knows that what business is essentially looking for is clarity of policy, swiftness of action and real action on the ground.”
Mantri agrees that, “ While Modi should reign in the fundamentalists, he seems to have his clear agenda of development, which he wants to deliver (Swachh Bharat, Digital India, etc.) and therefore, is avoiding taking a stand on these events and be distracted. It’s a strategy that seems to be working at the moment.”
Gupta points to another aspect of conflict saying that, “Modi also realizes that India is sitting on a powder keg with 100,000 unemployed youth joining the work force each month with not enough jobs going around. His global campaigns are meant to inspire confidence and trust and get those funds flowing. I have a feeling that he – and much of government – is more scared of the day when unemployed youth take to the streets. Issues of beef and moral policing will be a distant memory when that happens”, adds Gupta.
There is no doubt that unemployment as well as the frustration of workers who are not skilled enough for their jobs or to upgrade out of it can lead to simmering discontent.
Either way, Modi is landed with the PR challenge of demonstrating that his government will really deliver business opportunities, create real prosperity and jobs and that social intolerance is not the sum total of the India story.