India Inc frets over govt’s fading sheen

MUMBAI: India Inc’s confidence in the Modi government, about to complete a year later next month, seems to be dipping. Two tweets from the chairman of Rs 4,600-crore Marico, Harsh Mariwala, on Tuesday are perhaps telling. “Sheen is falling of Modi govt in the context of promises, and gradual delivery. Need to move fast, hope interest rates are reduced today,” said the first tweet. The next said, “Heard from a leading politician that if elections were held today NDA will barely win 200 seats in spite of weak opposition.”
Mariwala is not the only industrialist who is disappointed with the Modi government – the very lot that was its biggest cheerleaders.It’s said that the conversation in board rooms is changing. The pace of clearance is no longer the only issue bothering India Inc. Captains of industry are now highlighting two new concerns, albeit in hushed tones – some of the recent notices from the taxmen and the seemingly unchecked Hindutva agenda of certain right wing groups.
While most CEOs still keep their faith with the Modi government, they are also taking note of the attacks on churches as well as the fresh spurt of tax notices. They feel this is sending out a wrong signal to investors at a time when the government is chasing funds, growth and development.
TOI reached out to several industrialists, CEOs and bankers, most of whom were reluctant to speak on record because of the obvious sensitivity attached to the subject. Some of them had earlier complained about things not happening on the ground despite improved sentiments. Now many said social disharmony was not conducive to business.

RPG Group chairman Harsh Goenka said that tax demands of such high value would invariably result in increased litigations. “As long as the issues are treated objectively and fairly, it should not worry India Inc. However, as a secular nation, we must avoid any form of fundamentalist activity. Random fascist comments lead to communal disharmony and should be dealt with severely,” Goenka told TOI.
A top banker, who did not wish to be identified, also appeared worried over fringe or extreme right wing groups chasing the Hindutva agenda and wondered why Modi hadn’t clamped down on them yet. A few months back, FICCI president Jyotsna Suri had told TOI, “It (statements by the saffron hotheads) is certainly diluting the focus and is uncalled for.”

While agreeing that there has been good progress in the government’s approach to improving ease of doing business in India, a CEO of a multinational company, which recently faced a tax notice, said such issues impacted the daily operations of a company. The official, who did not wish to be identified, indicated the matter would end up in court. “In some situations, I understand that while solutions are attainable, neither ministers nor bureaucrats want to be the first to take difficult decisions due to the fear of being questioned later.” He suggested a mechanism of joint decision-making with transparent documentation of facts and reasons so that the diffidence in making such decisions is reduced.
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Not all CEO’s are complaining though. Venugopal Dhoot, chairman Videocon Industries, whose brother Raj Kumar Dhoot, is a Rajya Sabha member from Shiv Sena, believes that the government is following secular ideals. “Tax demands have nothing to do with the government. Tax laws have been passed in Parliament and accordingly demands are being raised,” Dhoot said.
Piruz Khambatta, chairman Rasna agreed with Dhoot. “Tax demands are a legal issue and the government has nothing to do with it.” Khambatta, who is from Narendra Modi’s home state of Gujarat went a step further to say that the voices against Hindutva groups was an “over reaction”. “Conversion is not good. Our stated position from the point of view of the Parsi community (he is a Parsi) is that we are against conversion,” he said.
Similarly, a majority of CEOs also agreed that much has happened in the last few months and the Modi government was suffering from the burden of over expectation. Most felt the Modi government should also be congratulated for bringing focus back on growth, curbing widespread corruption, strengthening overseas trade and successfully auctioning scarce resources like spectrum (telecom) and coal fetching the exchequer over Rs 3 lakh crore since taking office.