Idea of ‘Rising India’ under threat, says Baru

Citing Jagan & Pranab, Baru claims political risk to investments is growing

Former press secretary to the Prime Minister and author Sanjaya Baru, has contended that the narrative of “Rising India” is under serious threat.

Baru was delivering a lecture on “The Rule of Law, economy and ease of business” here on Sunday.

He blamed both the judiciary and the political executive for the slowdown of the country’s economy. Both, he said, had contributed to the erosion of “Rule of Law”.

Baru talked about how pendency of cases was one of the biggest worries that citizens and corporates’ have to reckon with. He noted that India spends less than a per cent of its Budget on judiciary.

“Against this backdrop, it is disconcerting to see that the 2020-21 Budget has reduced funds for judicial and legal infrastructure,” he said and also blamed “excessive litigation and capability to draft transparent and efficient rules.”

On the cases pending in various High Courts, he said, “It should worry policy makers that the worst performing states, with some exceptions, are also the poorest.”

The senior journalist noted that one of the major causes for the decline of investments in India was the legal process and verdicts. “While we talk about foreign investments coming to India, we forget about investments by Indians and their talent that is fleeing the country,” he added.

Baru also noted that even Chief Justice of the Supreme Court SA Bobde is aware of how Indian companies preferred to go for arbitration proceedings in Singapore or London, over settlements in the country.

Baru also threw shade at Andhra Pradesh Chief Minister, Y.S. Jagan Mohan Reddy for renegotiating or abrogating contracts and delaying ongoing projects.

Comparing it to the retrospective tax move by the then Finance Minister Pranab Mukherjee, he said it was an example of the rise in political risk in investing in India.

A trained economist, Baru recalled his youth while talking about economic models of India and other countries. “There was a time when the ‘countries of tomorrow’ were considered Brazil and Argentina. But their growth plateaued,” he said.

Talking on the “Rising India” model, he said that until a few years ago, the world believed India was catching up with China.

“Today, that idea is under threat. Now, we have to decide on whether we want to pursue the Latin America way or the East Asian way,” he said.

There was a time when the ‘countries of tomorrow’ were considered Brazil and Argentina. But their growth plateaued.

— SANJAYA BARU, Economist