Arun Jaitley is right: Pro-business policies are the way to go for poverty eradication

On Facebook, finance minister Arun Jaitley has said that there is no contradiction between being pro-business and pro-poor. He is absolutely right. It is business that drives economic growth, producing infrastructure, incomes, taxes, jobs, research and development, training of people into skilled workers and the range of things that are more affordable and more widely available even in remote hamlets. Former Prime Minister Manmohan Singh once said that the best way to lift people out of poverty was through higher growth. This remains true. India saw the fastest decline in poverty in the years of fast growth it had in the run-up to the financial crisis of 2008.

This way of being pro-business is growth with broad participation. The UPA called it inclusive growth. The tax skimmed off a fast-growing economy, it redistributed to the poor in assorted ways. This was the right thing to do. But it did not have the courage to say that being probusiness is fully compatible with being pro-poor. It chose to stick with the rhetoric of patronage and giveaways, even as it carried out empowerment through its greater emphasis on improving public health and public education. The present government has the courage to say what its predecessor bit its tongue on. That is welcome. But it must also understand that empowerment of the poor must go ahead apace, if a pro-business philosophy is not to translate into rapacious dispossession of the poor.

A sensible policy on releasing land for industry is key. The point is to make land-losers stakeholders in the wealth that would be generated using their land. From lease to return of a portion of the land post-development, there could be many alternatives. The point is to deploy political imagination in ways that would simultaneously be pro-business and pro-poor, to realise the huge potential for ending poverty in today’s world. The communists do not get this. The Congress understands this but does not have the guts to say it in so many words. Arun Jaitley has made good this deficit. The point is to revive growth and keep it broad-based.