After protests by industrialists that they were being unfairly targeted by tax authorities, Prime Minister Narendra Modi in his traditional Independence Day speech said wealth creators should not be eyed with suspicion and that they should be respected.
“In our country, certain wrong beliefs have come into existence. We have to come out of those mindset. Let us never see wealth creators with suspicion. Only when wealth is created, wealth will be distributed," he said. "Wealth creation is absolutely essential. Those who create wealth are India's wealth and we respect them."
The need of the hour is to recognise and encourage the wealth creators of our nation. If wealth is not created, wealth cannot be distributed…. Those who are making efforts to create wealth, according to me they themselves are an asset to the nation and must be empowered, the Prime Minister said.
Modi’s remarks come in the wake of complaints by industrialists of being targeted by tax authorities in the wake of suicide by Café Coffee Day founder V G Siddhartha.
Siddhartha had alleged harassment from lenders and tax authorities in a letter purportedly written by him. His letter spoke of the Income Tax Department attaching "our shares on two separate occasions to block our Mindtree deal and then taking position of our Coffee Day shares, although revised returns have been filed by us".
Among others, Kiran Mazumdar Shaw, chairperson and MD of Biocon had complained that “India has moved from License Raj to Inspector Raj. There is an effort to clean India Inc but the pendulum cannot swing from one extreme to the other. The government needs to exchange with honest businessmen.” While former Infosys Director Mohandas Pai, normally considered pro-Government, had also gone on record stating “'the tax justice system is broken in India. We must request to our PM & FM to intervene & stand-up for us to show that they're there to protect honest taxpayers.”
Businessmen had for quite some time been privately pointing out that criminalizing business failures by tax and policing agency sleuths was stigmatizing business and making revival of many firms which are in the doldrums more difficult. However, the public outcry came with the Bengaluru based entreprenuer’s death.
Income tax raids conducted to meet targets and enquiries on corporate failures which led to banks being laden with huge bad loans were among issues which were agitating some in corporate circles.