This decentralized, people-centric approach of AAP stands in contrast to the centralized, top-down, and unilateral imposition-based approach of the Congress and the BJP. While the Congress talks about some of the similar issues of the people, like food security, land acquisition, and employment, its utter corruption, inefficiency in implementing promises, and dynastic governance have damaged its credibility. The BJP has probably been worse, with its inherently communal outlook in addition to Congress-like corruption and centralized governance approach, not to speak of the overtly autocratic governing style of its PM candidate.
Policy agenda for the economy and the business sector
An important contribution made by AAP in the recent debate on economic policy is to point out the distinction between 'honest capitalism' and 'crony or dishonest capitalism'. Kejriwal has clarified that AAP supports business activities and views the business sector as performing an important role, but is against crony capitalism. Let us understand this difference by way of examples.
Wikipedia defines 'crony capitalism' as an economy in which success in business depends on close relationships between business people and government officials, or on collusion between market players. Such practices are motivated by objectives of greed rather than interest of consumers or society. It may be exhibited by favouritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state patronage. Indian economy clearly needs to move away from such a regressive model towards a transparent and progressive one.
Practices followed by certain influential business groups in India -- with active support of the central or state governments -- could be straight away categorized as crony capitalism. Both the Congress and the BJP governments have been consistently guilty on this count. For instance, the latest K G Basin gas-price revision by the UPA government and the earlier 2G scam, which were against the interest of industrial and end consumers, are examples of crony capitalist practice. Another glaring example is the series of favours granted by the BJP to a particular business group in Gujarat that is known for its proximity to Modi, as a result of which it grabbed mega contracts despite its high prices. The business group grew by fourteen times, to over INR 50,000 crore, in the past twelve years of the Gujarat BJP government. Economic and industry policies followed by the Modi government in Gujarat, and the UPA and the erstwhile NDA at the national level, are littered with such blatant manifestations of crony capitalism.
In contrast, the short-lived AAP government in Delhi had two levels of positive impact on the business world. At the macro level, AAP's FIR against Mukesh Ambani and two central cabinet ministers in connection with the rent-seeking decision of K G Basin sent out a clear message to the corporate world that unfair and manipulative business practices are not acceptable. At the ground level, AAP's actions and postures led to some drop in the corruption faced by businesses in routine transactional activities for which they interface with government departments. For example, many transporters and logistics service providers of north India have come out in support of AAP as they experienced reduced harassment by the transport department and police personnel at entry/exit toll nakas in Delhi. Likewise, several small and medium manufacturing and trading firms in Delhi reported reduced corruption.
While the AAP's Delhi government was short-lived, its effect does point to the potential of impact on the business sector if such practices sustain for a longer period. It is not only a big relief for the individual businesses but also for the economy as such. As the routine corruption faced by the businesses goes down, the non-value adding time and costs are cut, and the productive operational activities can be carried out with greater efficiency and speed. Thus the overall inventory turnovers and asset turnarounds in industrial supply chains will increase. In addition, the time thus saved could be filled in by enhanced business activity. These effects will release more money (both revenue and working capital) in the economy and at a faster rate than before. Imagine the impact if the AAP effect continues for months and years! A back-of-the-envelope calculation, assuming utilization of one-fourth of the asset-time saved for additional business generation and faster release of working capital, indicates a potential increase in the annual revenue of INR 5,000-10,000 crore for all manufacturing businesses who sell in Delhi on account of a couple of hours saving in every truck's trip. This is equivalent to 10-20 percent of Delhi's industrial GDP.
This kind of bottom-up release of locked-up business time and money through cutting corruption and facilitating fair and transparent business practice is a robust economic strategy. It not only saves time and cost for the individual businesses, but also adds to certain operating competence in those industries, like making their supply chains more agile and cost efficient. This could enable the firms to satisfy their customers better, and eventually, improve business performance.
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