Narendra Modi has a new problem – big corporates and moneybags are angry
Biocon chief Kiran Mazumdar Shawand former Infosys Director Mohandas Paitold a newspaper that they were told hold back their criticism of the Modi government by an official.
- Rahul Bajaj, chairman of Indian conglomerate Bajaj Group, said that the auto industry’s going through a rough patch because of lack of demand and no private investment.
- Over the months, more and more stock market investors have taken to Twitter to talk about the government’s unfriendly market policies.
- Adi Godrej, chairman of the Godrej group, had said that the Budget presented by Finance Minister Nirmala Sitharaman is not “growth-oriented”.
The latest to join the bandwagon of angry corporates is Kiran Mazumdar shaw who made a shocking revelation on Sunday. A government official reportedly told her not to speak of harassment by tax officials in relation to the unfortunate death of VG Siddhartha, the founder of
Even Mohandas Pai, the former Infosys director who is currently a private investor who backs startups, chimed in. "Lots of people get such threats," he told the newspaper. Both of them have been avid supporters of Narendra Modi in the past and bitter critics of the Congress-led United Progressive Alliance government that ruled from 2004 to 2014.
“I used to speak out always. It doesn’t matter if UPA is in power or the NDA,” Shaw said urging the corporate world to speak up.
Fall from Heavens
“There is no demand and no private investment, so where will growth come from? It doesn’t fall from the heavens. The auto industry is going through a very difficult period. Cars, commercial vehicles and two-wheelers are going through a rough patch,” Bajaj added.
The Budget has not cheered them either. The government imposed a tax on super rich, and Business Standard had reported that market regulator SEBI mandated separate registrations for Foreign Portfolio Investors. The resentment against these rules is rising.
The slow pace of economic growth, and their credibility isn’t helping either. Until now, corporate giants stayed out of the debate over credibility of government's growth data between 108 economists and 131 chartered accountants. But, now they are not holding back.
“The government may or may not be saying this but there are clear cut markings from the International Monetary Fund (IMF) and World Bank, which shows a decrease in growth in the last three-to-four years. Like any government they would like to show a happy face, but reality is reality” Rahul Bajai said. Meanwhile, his son Rajiv Bajaj had said government’s policies on electric vehicles had left everyone confused.
Complaints in chorus
The Bajajs, Kiran Mazumdar Shaw, and Mohandas Pai are not alone. Adi Godrej, chairman of the Godrej group, too said that the Budget presented by Finance Minister Nirmala Sitharaman is not “growth-oriented”. Godrej also touched upon a sensitive subject saying that rising intolerance in the country is also affecting growth.
Investor and author Basant Maheshwari recently took to Twitter to say, “Lowering GST and other charges on Electric Vehicles won’t create demand. There is just no infrastructure. People won’t change preferences like that plus EVs aren’t cheap. However, it will surely lead to a fresh bout of short selling in the frontline auto names? That’s all.”
This is an unexpected move for top corporates who had stayed away from government bashing even during demonetisation in 2016. Clearly, the tables have now turned.
Porinju Veliyath, founder and CEO of Equity Intelligence, after the Budget said, “India dreams a $5 trillion, graft-free, double-digit, free-market-driven, rule-based and liberal economy by 2025! This is very much doable, but I am afraid parts of the Budget - the direction it points, can take us back to 4% GDP growth rate!”
Center of the Left
Veliyath had even written a letter to his investors, explaining the poor performance of his portfolio. "Some of the budget provisions did not acknowledge the cardinal principles of a free-market economy," Veliyath said in his letter on Thursday (July 18) adding that the positives of the continuity in government has been lost with the market unfriendly provisions in the Budget.
When big money backed Modi with hopes of market reform, they made a bad bet on a party whose ideology is rooted in ‘Swadeshi’, which can be loosely translated to home-grown conservatism.
As the commentator and author Shakar Aiyar argued recently, “In popular perception, the BJP was seen as the home of right of centre economics. And the centre continues shifting to the left.”
A former Prime Minister cried on national TV for VG Siddhartha-- the untold tales of politics and privilege may die with India’s coffee baron
Full text of the letter written by Cafe Coffee Day founder VG Siddhartha before he went missing