Annapoorna: A Business-friendly Govt Should Take a Joke and Listen to the People

A regime that is feared and not admired is not what the doctor ordered for the world's fastest-growing economy.

D Srinivasan, managing director of Shree Annapoorna, humorously mocks the seemingly irrational GST rates on food items.

(Photo: screengrab)

Who is out to get Nirmala Sitharaman?

That is a question worth asking after this week's viral video in which the finance minister is said to be behaving arrogantly towards the head of an iconic eatery chain in Coimbatore: Sree Annapoorna.

We would be missing a big point by getting too much into the details of what happened in this particular incident, but what is evident after a display of social media optics is that Prime Minister Narendra Modi's BJP-led government needs to look within at its boastful claims about "ease of doing business" in which it strives to boost India's ranking for global investors. Somebody needs to tap the shoulders of some of the high and mighty and say, "Hey! How about thinking global and acting local?"

In the reported incident, whose details are not as clear as the Congress-led critics claim, there is one part where D Srinivasan, managing director of Shree Annapoorna, humorously mocks the seemingly irrational GST rates on food items, saying it causes problems for him as a hotelier as there is a five percent GST on sweets, 12 percent on savouries, no GST at all on plain buns but 18 percent on cream buns. Amid laughter, he talks about customers saying, "Just give me the bun, and I'll add the cream myself."

The fact is that, though decided by the GST Council which is much larger than the finance minister, the GST has been a creature of ad-hoc measures that require rationalisation with a transparent underlying logic. Srinivasan was only anecdotally explaining its idiosyncrasies.

To be fair, Sitharaman is not exactly responding to Srinivasan in an arrogant way in the video as is widely claimed, but then her party's official handle shared a video of Srinivasan profusely apologising to the finance minister at a private meeting, pleading that he be excused as he did not belong to any party. Tamil Nadu's BJP chief K Annamalai has since apologised to the hotelier for what he calls a "breach of privacy" of the industrialist and has directly spoken to the Shree Annapoorna executive.

By some stretch, we are led to infer that the apology in question was demanded and/or arranged by Tamil Nadu BJP leader Vanathi Srinivasan, who was present on both occasions.

Congress President Mallikarjun Kharge, Leader of the Opposition Rahul Gandhi and the Congress party's official handle have all gone for the finance minister's jugular with a narrative that is increasingly familiar: GST rates are high and irrational, the finance minister is arrogant, and small businesses are severely hurt by the Modi government.

Just what is going on?

It is, perhaps, a power play with an attitude problem, and not necessarily between political parties but also within the main one.

Consider some hard truths about entrepreneurs.  Business people rarely complain in public about government-related issues but they do have grouses. They also don't like biases that favour one type of business over the other, or big over small. But, as any journalist including myself knows, they do like to talk in whispers and nudges about government officials and business rivals. Nobody likes to step on the toes of the high and the mighty, lest they attract someone's wrath and be denied an anticipated benefit.

Rare is a businessman like Srinivasan, the legendary JRD Tata or the late Bajaj group supremo Rahul Bajaj, who will stand up and be counted as a dissident. In the best of circumstances, such leaders who call a spade a spade must be treated with respect because they prefer honest communication to skullduggery or stealthy opposition.

Five years ago, Bajaj, who passed away in 2022, stood up at an awards function and told Home Minister Amit Shah that people feared criticising Modi and his administration for fear of reprisals, but only after he had praised the government for its "good work". "If we criticise you there is no confidence that you will appreciate that," Bajaj had said, to which Shah responded that "no one needs to fear" the Modi government on that count.

It is time now to ask: Is that so, Mr Shah? Who will account for Srinivasan's plight?

A government that is feared more than admired is not exactly what the doctor ordered for the world's fastest-growing major economy that also prides itself on being the planet's biggest democracy. The incident involving the Coimbatore hotelier may signal that Mr Bajaj's fears may have a solid basis and nothing has changed since Shah's assurance in 2019.

Earlier this year, after the Supreme Court struck down the BJP government's electoral bonds scheme that garnered the party more than Rs 8,000 crore in controversial bonds, there were investigative reports and criticism suggesting or alleging that businesses were forced to buy the bonds in payoffs linked to raids by law enforcement authorities like the Enforcement Directorate or the income tax department. These charges are denied and have not been pursued either as far as one knows.

But the government certainly needs to address concerns not only of its being biased towards a small coterie of big business tycoons but also the fact that there is an atmosphere of fear among those who prefer to stay neutral in politics and focus on their businesses.

It is pertinent to recall that the Congress government was accused once of presiding over a corrupt Licence-Permit-Quota Raj under which politicians or officials had to be pleased or their palms greased to get permits. Though some of that changed after 1991 when many such permits were axed under a new-age reforms package, the government still dominates Indian business through a combination of regulatory rules, laws, material permits and a dubious culture of law enforcement.

The Coimbatore incident also indicates that some BJP executives may be keen to project the image of the Modi administration as one that must be bowed to by industrialists rather than be dealt with in an amiable but business-like manner. With friends like that, the Modi-Shah team does not need adversaries.

The Annapoorna chain runs 16 restaurants across Coimbatore and some outside the city in Tamil Nadu. It is a local icon matching national brands such as Hotel Saravana Bhavan and Haldiram in stature. Iconic brands have a way of creating optics that may drive home some criticism.

As one of India's most industrialised states, Tamil Nadu also has a smart-thinking bunch of entrepreneurs and highly educated citizens. The Coimbatore fiasco may well lower the party's image in the state as it tries to improve its political fortunes there

There is some irony in the fact that incidents such as the one involving the Annapoorna honcho may overpower some of the imagery that the BJP built based on its criticism of what Rahul Gandhi said about India during his recent US visit.

A business-friendly government is not just one that speeds up income tax refunds or automates compliance processes or removes some unwanted regulations. It is also one that listens with a heart, can take a joke, and counter criticism with some disarming humour. 

A red carpet that is promised cannot become a red flag for industrialists.

(The writer is a senior journalist and commentator who has worked for Reuters, Economic Times, Business Standard, and Hindustan Times. He can be reached on Twitter @madversity. This is an opinion article and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)