The Govt Has Killed The “India Growth Story”: Narayana Murthy
Narayana Murthy, the billionaire founder of Infosys, has expressed deep disappointment that India has faltered in its growth pace owing to the abject indifference of the Govt and the flawed policies of the Income-tax dept. There is so much pessimism about India amongst Global Cos that India does not even figure as an investment alternative anymore, he says, and offers solutions on what can be done to reverse the trend
Narayana Murthy, the billionaire founder of Infosys and doyen of the Indian I. T. Industry has expressed deep disappointment that India has faltered in its growth pace owing to the abject indifference of the Government and the flawed policies of the Income-tax department.
In an interview, Narayana Murthy took off from where entrepreneurial whiz kid Jaitirth Rao had left it (Dear Income-tax Department, ‘Thank You’ For Ruining Indian Economy) and agonized that while the entire World had great expectations from India, we had “fallen very, very short”.
the Income-tax department has adopted a hostile stance and does not trust even top-notch companies, which have contributed billions of dollars to the Indian economy. They do not recognise a statement of work, and insist on a company negotiating a new master agreement for every project. Such a thing is not done anywhere in the world. While the Industry has been arguing with the top officials of the Income-tax department, it has met with deaf ears
Narayana Murthy pointed out that, earlier, in the rarified field of Global CEOs in which he traveled, India always figured as an alternative to China. However, now the international Global giants were consciously shunning India and it was not even in consideration as an investment destination, he lamented.
For the sorry plight of the Nation, Narayana Murthy put the blame squarely on the studied indifference of the Government. All decision-making had come to a standstill and there was a total paralysis of action, he said. The Income-tax department came in for special criticism from Murthy. He pointed out that the Income-tax department adopted a hostile stance and did not trust even top-notch companies, which had contributed billions of dollars to the Indian economy. “They do not recognise a statement of work, and insist on a company negotiating a new master agreement for every project” he pointed out. “Such a thing is not done anywhere in the world” he said and added that while the Industry has been arguing with the top officials of the Income-tax department, it has met with deaf ears.
What is surprising is that it is not only the top notch bureaucrats who have adopted an indifferent attitude and turned a deaf ear to the plight of the Industry, but even the Ministers at the highest level don’t seem to care at all. Narayana Murthy pointed out that he had submitted detailed presentations to the Prime Minister and the then Finance Minister Pranab Mukherjee setting out the problems of the Industry and what could be done to resolve that but though, fourteen long months had passed, the Government had not even acknowledged his letter, let alone done something about it.
The only way in which the Country would be able to salvage its growth prospects would be if the Vodafone retrospective amendments are reversed. To restore investor confidence, the Government has to make a political declaration that no further retrospective amendments would ever be carried out. A clear message has to go out to the investing public that judicial decisions would be respected and not set at naught by retrospective amendments
Narayana Murthy was particularly upset about the Government’s “I don’t care” attitude because the problems that he had pointed out were not in the realm of legislation or matters of ideology or politics but were simple administrative issues. All that was required was for one senior bureaucrat to say “let’s adopt global standards” and most problems would be solved in a few hours time, he said. Murthy lamented that the Government was so paralyzed that it wasn’t able to take even simple decisions.
Narayana Murthy also made his contempt for the retrospective changes to tax laws clear. He emphasized that it was “very surprising” to him that the Government did not play fair in the Vodafone matter and should have chosen to change the law after the Supreme Court has ruled on the case.
He blamed the retrospective amendments for ruining the investment climate of the Country. “The impact has been sad and confidence of global investors has been shaken very, very badly“, he said and added that “an aspiring economy should never indulge in such unethical practices”.
Narayana Murthy was clear in his mind that the only way in which the Country would be able to salvage its growth prospects would be if the Vodafone retrospective amendments were reversed. He added that to restore investor confidence, the Government had to make a political declaration that no further retrospective amendments would ever be carried out. A clear message had to go out to the investing public that judicial decisions would be respected and not set at naught by retrospective amendments, he emphasized.
Murthy was, however, optimistic that the change in guard in the Finance Ministry with the appointment of P. Chidambaram as the Finance Minister would auger well for the Country. The Government had to start off on a clean slate and the Ministers and bureaucrats had to be encouraged to be proactive and take quick decisions. That simple measure would bring the economy back on track, he emphasized.