India Inc’s impatience with the government’s paralysis seems to have reached its peak. Industry voices are getting louder each day against the lack of political leadership and action on long-promised measures to encourage investment.
A delegation of the country’s leading businessmen on Tuesday asked PM Manmohan Singh to show some political courage to stop the negative sentiment spread by rating agencies like S&P and reverse the decline in investor confidence. Assocham president Rajkumar Dhoot urged Singh to put the house in order in challenging times and face the rough weather with courage.
Even India’s tech czars —Azim Premji and Narayana Murthy —have expressed their frustration over the current state of affairs.
Speaking to Morgan Stanley, Narayan Murthy, Chairman Emeritus of Infosys, said that he is saddened with the fact that India’s image is suffering. “There was a lot of confidence that India would indeed do whatever was necessary because the person who was the face of economic reforms in 1991 is our current PM. Therefore, there was a lot of expectation from outside India,” he was quoted as saying in a June 11 report. He further added that the government should frame policies that could address growth. There should be an investor-friendly ecosystem to bring in more foreign direct investment into the country, he had said.
Murthy also criticised retrospective imposition of taxes and said that a high growth trajectory is not possible without the participation of foreign investors. “They need to see India as a proactive, investor-friendly and stable governance model,” he said.
On Tuesday Wipro chairman Azim Premji slammed the government over various policy paralyses in the country. “We are working without a leader as a country” and that “if we do not change, we would be down for years,” ET Now, quoted him as saying. Premji in October warned that the “complete absence of decision-making among leaders in the government” might cost the country dear.
Premji’s criticism of the government comes at a time when global rating agency Standard & Poor’s has cautioned India might become the first BRIC (Brazil, Russia, India and China) country to lose its investment-grade rating, unless growth issues and roadblocks in policymaking are addressed.
Even the World Bank on Tuesday said that the Indian economy would grow by 6.9 percent in 2012-13, problems like policy uncertainties, fiscal deficit and inflation notwithstanding.
Last year industry and corporate heavy weights like Jamshyd Godrej, Azim Premji, Keshub Mahindra, Deepak Parekh, Anu Aga and others, urged the government to take urgent action on issues including tackling corruption and bringing in greater transparency in government functioning. On Monday HDFC’s Deepak Parekh reiterated his criticism of the government and blamed the lack of political will for the economy’s problems. The HDFC chairman in a letter to shareholders said that India Inc is currently suffering from “self-inflicted traumas that India has brought upon itself”.
In April, the Confederation of Indian Industry noted that S&P’s lowering of India’s rating outlook to negative is a “wake-up call” and asked the government give a thrust to reforms, especially on FDI and tax fronts.
But has the government woken up or will it just keep promising to boost the economy?