Prime Minister Narendra Modi’s Independence Day speech must have been sweet music to the legions of battered industry stalwarts. He said entrepreneurs were playing a great role as wealth creators by contributing to reducing poverty. “Wealth creation is a great national service. Only when wealth is created, will it be distributed,” he said.
Extolling business leaders and corporate groups as the “country’s wealth” from the ramparts of the Red Fort, he went on to add that wealth creators must not be viewed with suspicion as they serve the nation and deserve respect and encouragement. However, since the withering budget presented by Finance Minister Nirmala Sitharaman, industry leaders have been striking a discordant note, warning that all is not well with the economy and chiding the government for being part of the problem.
THE CRITICS
At the Bajaj Auto AGM earlier this month, company chairman Rahul Bajaj said the government was responsible for the slowing demand and poor investments. “There is no demand and no private investment, so where will growth come from? It doesn’t fall from heavens. The auto industry is going through a very difficult period… Like any government, they would like to show a happy face, but the reality is a reality,” he said.
Falling demand and consumption has not just hit automobiles. Consumer confidence is so low it is bruising every industry, even innerwear. Page Industries (the Jockey brand) grew just 2 per cent, its slowest in the last decade; Dollar Industries is down 4 per cent; VIP Clothing down 20 per cent and Lux Industries’ growth is flat.
Adi Godrej, chairman of Godrej Industries, has emerged as a strong critic too. Addressing students of Mumbai’s St Xavier’s College last month, he had warned that rising intolerance, hate crimes and moral policing could “seriously damage” economic growth. “It’s not all a rosy picture now. One must not lose sight of the massive impoverishment plaguing our nation, which can seriously damage the pace of growth,” he said.
In the growing vocabulary of modern times, ‘tax terrorism’ has become part of the businessman’s lexicon. TV Mohandas Pai, former Infosys director and currently chairman of Manipal Global Education, has denounced ‘tax terrorism’ since the untimely death of Café Coffee Day (CCD) founder VG Siddhartha. The CCD chief had alleged he was being harassed by tax authorities.
Earlier a consistent Narendra Modi loyalist, Pai has now been saying that doing business in the country has become tougher by day in the face of continuous harassment from the I-T department.
Biocon CMD Kiran Mazumdar Shaw also lashed out at ‘tax terrorism’ in tweets after Siddhartha’s suicide, blaming a PE firm and I-T officials for driving the CCD founder to despair and death.
She then added to the controversy by alleging that a “government official” had called her up to “persuade” her not to connect “tax harassment” with the death of Siddhartha. Infosys founder N R Narayana Murthy last month exhorted the country’s youth, bluntly stating that this was not the country for which their forefathers had got freedom.
ANYONE LISTENING?
With the nation’s eyes riveted on the crisis in Kashmir, there has been a muted response to the issues raised by these industry captains. But the irony is there. On one hand, the Prime Minister gives the wealth creators centre stage in his I-Day address. On the other, various industry delegations that have been lobbying for a rollback on some of the onerous levies of the recent Union Budget have had to come away empty-handed.
There was a high expectation that there would be some rethinking on the raising of a minimum public holding from 25 to 35 per cent in listed companies and on the tax surcharge that has hiked the top income tax slabs to 39 and 42.7 per cent. But nothing happened. Again, a few days ago, worried automakers made little headway when they met Sitharaman for lower GST rates for passenger cars.
Industry leaders are not among those who shoot from the hip. They have long-term interests and they are usually circumspect about what they say about the governments in power. It is thus significant that so many of them have gone public just when the Modi government has won an unequivocal mandate. It is a signal that there is despair. If wealth creators are indeed important to the economy, someone in government should take time off and listen to them.