Essays on Business-State Relations in India

1 October 2020
Press Release

The Centre for Policy Research (CPR)

is pleased to announce the publication of groundbreaking essays on

Business-State Relations in India

Delhi, Thursday, 1 October 2020: State-capital relations have witnessed a breakdown in India over the last decade. As a country, we seem to have a problem of publicly acknowledging this breakdown, and it is leading to a historic deterioration in trust between various levels of the Indian state (bureaucracy, courts, legislature, politicians) and capitalists, both small and large. It is not a coincidence that amidst this deterioration of trust we have seen a historic economic slowdown (even pre-COVID-19), dwindling private sector investment, rising industrial concentration across sectors, and a frustration among SMEs and small businesses unseen in recent history.

Where and how did things go wrong in the country’s business-state relationship and what must be done to resolve this?

The Centre for Policy Research (CPR) is pleased to announce the publication of a groundbreaking anthology of essays as part of the October 2020 issue of Seminar Magazine titled, Untangling Business-State Relations in India.

Co-edited by Rohit Chandra (Visiting Fellow, CPR) and Rahul Verma (Fellow, CPR), the issue contains articles by some of India’s leading thought leaders including Puja Mehra, Paranjoy Guha Thakurta, Kshitij Batra, Aseema Sinha, Sebastian Morris, and more.

Speaking on the issue, Rohit Chandra said, “It is our view that no country can grow without its business class, and that any aspirations of national accomplishment, international competitiveness, and overcoming recent adversities must be built on a stable expectation about what the future holds. Unfortunately, over the past decade, uncertainties have mounted, various levels of conflict have increased, and the overall coherence of India’s overall economic philosophy has been seriously questioned. This is in stark contrast to the first two decades after liberalisation. Commerce can be nudged but should not be coerced; yet in our interactions with a range of actors in this space, this sentiment of forceful handling emerged over and over again. Yet our capitalist class rarely speaks its mind freely in public. In fact, they barely act like a class, with top business groups and companies staying silent and waiting out difficult times, rather than engaging publicly with the political system to help themselves and others. Perhaps after struggling to find an audience they have given up.”

Highlighting that “India needs a new compact with its business class in which both sides must reach an understanding that is mutually beneficial,” Rahul Verma added, “Else we will continue to have unproductive cat-and-mouse interactions like the recent Toyota controversy, where a large multinational with a local JV announced slowed investment because of adverse taxation, and quickly flip-flopped its public position within hours after rebuke. If the current scenario does not change then investors will continue to sign vague MoUs, waves of speculative investment in financial instruments will come and go, but animal spirits will not return and Indian businesses will not build things. The top 30 business groups and their international investors cannot make up for the pain of the rest of the Indian economy.”

The path to recovery: public avenues where capital can speak

The issue highlights that the path to recovery lies in establishing more venues for public conversation and engagement where missteps can be admitted and course corrections can be jointly determined. Decades old forms of corporate intermediation have been dismantled (perhaps rightly so), but few credible structures have taken their place. Except for India’s largest capitalists, most Indian businessmen do not even know where to have their voices heard. Whether it is at banks, economic enforcement agencies, economic ministries, or courts, there runs a strong sense that capital is being stigmatised and vilified.

If this is to change, capital must speak. Early after Independence India’s political class and its capitalists engaged in a very public, extended debate over India’s economic future when the Bombay Plan fought for legitimacy and acceptance in public imagination. If India’s economic history tells us anything, it is that no one entity has a perfect plan; plans rarely work as predicted. A collectively determined, well-deliberated plan is better than one reached through individual initiative. And privately circulated lists of desired reforms deliberated on in invitation-only conferences are a poor form of engagement. Every once in a while, like in the case of the angel tax, Indian capitalists do mobilise collectively to argue against bad policy. But such occurrences are few and far in between.

The full issue can be accessed here. For further information and to schedule interviews with the editors, please write to: or or or write to Rohit Chandra at or to Rahul Verma at

The views shared belong to individual faculty and researchers and do not represent an institutional stance on the issue.