Yusuf Hamied, who grew drug maker Cipla’s revenue from just Rs 1.66 crore to Rs 8,000 crore during his tenure as MD over 40 years, has said in as many words what India Inc has been hesitating to say: that businessmen are willing to say goodbye to India and move abroad due to the business-unfriendly environment here.
Ratan Tata said as much to the Financial Times, when he noted the policy confusion in government: “You may have the prime minister’s office saying one thing and maybe one of the ministers having a different view. That doesn’t happen in most countries. You wouldn’t have a seven-or eight-year wait to get clearance for a steel plant.”
Azim Premji of Wipro also decried the fact that India was “working without a leader” and this could pull the country down.
Now, Hamied has joined the chorus but with much stronger words. “The tax policies and lack of basic infrastructure are huge problems in India. Because of lack of prudent tax and stable policies, all big Indian companies are going abroad. The time has now come for us to say goodbye to India,” he has told Business Standard in an interview.
One of the most successful businessman in India, Hamied’s outburst is a not-so-hidden expression of frustration in Indian business about the failure of policy-making and governance under UPA-2. Talking specifically about pharmaceuticals, he said that instead of supporting the industry, the government is “making doing business here difficult”.
Hitting out at the flip-flop in government policies, he says, “We are uncertain of the taxes or the policies that can be announced on any day of the year. In other countries, governments are more worried about their companies.”
Cipla is already doing more business abroad than in India. The company’s overseas revenue share is increasing steadily — from 10 percent in 1995, now it is 55 percent and in two-three years Hamied sees it at 70-80 percent.
This, despite India being a key market for cheap drugs.
Many Indian businesses have already moved their focus away from India quietly. But nobody has given vent to their disillusionment as strongly as Hamied has done.
Contrasting the Indian situation with China’s, he explains how the Communist government there managed to change Shenzhen—which was just like Dharavi—into a city which cannot be recognised today.
“The country is doing everything possible which is in the interest of the Chinese, whether on patents or setting up plants in China,” he says.
Cipla plans to set up plants in China.
He even goes to the extent of saying that “a benevolent dictator is better than our kind of democracy”.
Though many may find it hard to digest this view, there is no denying the fact that the sentiment for doing business in India has been on the decline.
One can quote umpteen global surveys supporting this argument. As Hamied says, one of the government’s policies which has upset the business community is taxation.
A case in point is the transfer pricing orders that the tax department has sent to various companies of late. Hard-pressed to meet the collection targets set by the finance minister, tax officials are apparently going after corporates.
Shell, one of the companies that received the order, has said the tax department’s move goes against Finance Minister P Chidambaram’s efforts to attract foreign capital.
The Hamied interview provides yet another mirror to business’ unhappiness with the government over not being consulted on issues that matter to it. He said the government never asked for his inputs while formulating its pharma policy. At present, the policy is still in the works. In fact, no one had ever asked him for his views in the last 20 years.
“As the chairman of Cipla, I was never asked for any inputs by the government. I don’t know what’s in the policy,” he says in the interview. “I think India should have a pharma policy (that is) in the interest of Indians and not for increasing the profitability of multinationals,” he says.
Hamied may be hitting on the nationalist chord, but his broader concerns about the government’s attitude to business are widely shared in India Inc.