India Inc won’t be too amused by Manmohan Singh’s summons
The court summons to former PM Manmohan Singh and top industrialist Kumar Mangalam Birla, both widely seen as upstanding individuals, has provoked sympathy. More importantly, in the case of the latter, it will send a shiver down the spine of India Inc, a constituency dear to the current government.india Updated: Mar 13, 2015 08:26 IST
The court summons to former PM Manmohan Singh and top industrialist Kumar Mangalam Birla, both widely seen as upstanding individuals, has provoked sympathy. More importantly, in the case of the latter, it will send a shiver down the spine of India Inc, a constituency dear to the current government.
It was a measure of the discomfiture sparked by the ruling that the National Democratic Alliance was muted in its reaction, preferring to focus on the Congress’s sins and characterising Singh as an “economist PM”, the implication being that here was a technocrat who had, at most, merely been led into error.
Singh will likely become the second former PM after his mentor PV Narasimha Rao to face trial, a sad footnote to a low-key career marked by austerity and probity.
But it’s the summons to Birla that will cast a longer shadow. This is especially so because it comes at a time when the signs for Corporate India are worrying.
Despite an economy that is looking up and a booming stock market, there are enough reasons for furrowed brows in the country’s board rooms.
Look back only as far as the Budget, which was marred by a particularly Draconian proposal for a law on black money that could earn the sort of opprobrium for this government that a similarly harsh anti-terrorism law (POTA) did for the Vajpayee administration.
Earlier this week, there was a retroactive tax demand on Cairn India for something that happened nine years ago, based on a law that the ousted UPA government passed in 2012.
It’s no one’s case that the country should forego tax reasonably due to it, or look the other way if companies do something they shouldn’t do.
But investors hate surprises, and an uncertain regulatory and legal environment creates the sort of climate that will keep India mired in the 140s among countries ranked in the World Bank’s Ease of Doing Business index.
Writing to the concerned ministries asking for allocation of a coal block, giving reasons to support the request, is the sort of legitimate lobbying that companies across the world practice on a regular basis.
The Confederation of Indian Industry, the most influential trade organisation, was aghast at the Birla summons: “Such judicial orders create uncertainty and anxiety in the minds of investors and dissuade businesses from investing in the country and take forward the “‘Make in India” initiative,” it said in a statement.
The reference to Make in India is not incidental: this initiative is the pet project of Prime Minister Narendra Modi, just as improving the ease of business ranking is one of his stated objectives.
Neither is in any way well served by the events of the past few days, an unhappy confluence of matters within and beyond the government’s ambit.