NEW DELHI/BENGALURU: A sombre and worried India Inc echoed VG Siddhartha, India’s pioneer café entrepreneur, with many pointing out that several Indian corporates were in the same spot as his Coffee Day, facing debt pressures compounded by ‘tax terrorism’ and creditors demanding their pound of flesh.
Chairman of Manipal Global Education and former Infosys Director Mohandas Pai said, “The tax justice system is broken in India. We must request our PM & FM to intervene & stand up for us to show that they’re there to protect honest taxpayers.”Kiran Mazumdar Shaw, managing director of Biocon, told a TV channel 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.”
Entrepreneurs have for quite some time been pointing out that criminalising business failure is stigmatising it and making revival of many firms that are in the doldrums more difficult. Siddhartha, in a letter to the Cafe Coffee Day board, mentioned how he was hounded by the income tax department.
However, veteran corporate leader and chairman of HDFC Deepak Parekh defended creditors and taxmen. “There are various compulsions for a PE, for a bank, tax people so individually they do their jobs and businessmen must understand that they should only expand or grow or acquire to the extent they have capability,” he said.
Profits shrink
Net profit after tax for some 20,000 companies in India was just 2.3 per cent in 2017-18, according to a report by Centre for Monitoring the Indian Economy