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Is the economy hit by a climate of fear? This question is doing rounds after the recent public pronouncements by noted industrialist Rahul Bajaj and former Prime Minister Manmohan Singh. Rahul Bajaj hit the headlines on November 30 when he spoke of industrialists being scared to speak out on their problems and on the dismal state of economic affairs in India. The corporate leader has always had a reputation of being fearless and speaking his mind. Bajaj was speaking in an event in Mumbai which was attended by Union Home Minister Amit Shah and other cabinet ministers.

At the event, Bajaj had said, “Nobody from our industrialist friends will speak…This environment of fear, it’s definitely on our minds…You (the government) are doing good work and despite that, we don’t have the confidence that you’ll appreciate criticism.” He also spoke against rising Hindu nationalism, tax terrorism, incarceration of opposition leaders and mob lynching. What may have prompted him to finally speak up is the sad state of the Indian economy. The GDP growth rate has slid to 4.5% for the July-September quarter.

The irony was not lost on him when he concluded his comments on a sarcastic note saying, “Everyone here is laughing saying ‘go, get crucified’ but I will say openly an environment (of trust) has to be created.”

Former Indian Prime Minister Dr. Manmohan Singh also shared similar concerns. Singh noted, the current figures were “completely unacceptable” and pointed to a “palpable climate of fear” leading to this state of the economy. Delivering the address at the National Economy Conclave organised by the Rajiv Gandhi Institute for Contemporary Studies, Dr. Singh said, “Many industrialists tell me they live in fear of harassment by government authorities. Bankers are reluctant to make new loans for fear of retribution. Entrepreneurs are hesitant to put up fresh projects for the fear of failures attributed to ulterior motives.”

Similarly, in a recent interview to The Telegraph, Hemant Kanoria, chairman of Srei Infrastructure Finance Ltd., pointed about the fear of retribution among the business circle. He said, “Unfortunately, we are not making differentiation between frauds and failures. Moment there is a problem in the business, it is being labelled as fraud. A business might fail because of several factors, most of which are external and beyond anyone’s control. If we are not able to segregate failures from frauds, we will kill the entrepreneurship spirit in our country.”

Also, referring to the government’s efforts to disown data on unemployment and falling real consumption, Dr. Singh said, “Shooting down messengers of bad news or shutting off economic reports and data is juvenile and does not behove of a rising global economic powerhouse.”

It’s hard to deny that Indian industrialists mostly prefer to remain silent about policies and national issues - no matter whichever government is in power. What raises concerns is the manner in which these occasional voices of dissent or concern are being dealt by the ones in power. Twenty six years earlier, when Bajaj spoke about the threat to domestic business from foreign investment, Prime Minister P. V. Narasimha Rao paid heed to it and reached out to business leaders. On the contrary, the responses from the Modi government till now to the recent statements made by Bajaj have been of denial and criticism. Nirmala Sitharaman and other BJP ministers have accused him of promoting anti-national sentiments and favouring the Congress.

Pradip Bhattacharya, MP, Rajya Sabha, told BE, “Rahul Bajaj is closely connected with the Indian business circles. He must be aware of their concerns. He has correctly pointed out the worrisome situation. There is a panic stricken atmosphere prevailing. The business leaders are scared that if they criticise the government, they will be harassed by the CBI or ED or the income tax department along with online trolling and smear campaigning.”

The statement of Bhattacharya about tax terrorism and coercing people into silence echoes with the recent examples of Kiran Mazumdar-Shaw and Harsh Goenka being warned as well. Harsh Goenka of RPG Enterprises had tweeted in support of Manmohan Singh’s recent comments on economy describing them as ‘valid points’ but later deleted his tweet. The retreat speaks volumes about the climate of fear in Indian business circles.

With such incidences mounting, it isn’t surprising that India Inc. has chosen to remain silent about the effects of demonetisation and the premature implementation of GST. But for how long is the government going to deny the critical situation it faces by silencing voices and suppressing NSS reports on jobs and consumption? If anything, the constant rebuke and growing environment of threat and fear has emboldened apprehensions and led to a further lack of confidence to invest in businesses.

There are clear signs of caution in pointing out the follies of the current government’s policies and holding them accountable for their actions among powerful institutions like media and corporates. For example, on November 29, even as GDP growth in the September quarter fell below 5%, India’s largest industry body, the Confederation of Indian Industry did not even issue a perfunctory statement of concern. Similarly, Bajaj’s comment was not the big news in the newspaper that organised the award ceremony. Instead, the headline focused on Amit Shah’s reply.