The heads of General Electric and Vodafone Plc have added their voices to the growing negative commentary about India’s business climate, piling the pressure on the government to draw a line under this discourse.
GE Chairman and CEO Jeffrey Immelt said there was growing concern among American and European CEOs about India’s business climate and warned against policies that were unfair and bad for much-needed investment.
“If you put yourself in the shoes of an American or a European CEO, most of the articles (in the press) have been negative. That has clearly concerned people,” said Immelt, adding that next week’s budget must address the concern of foreign investors and push infrastructure development.
While the GE boss was measured, the chief of Britain’s Vodafone, which has been locked in a high profile tax dispute with the government. Vodafone CEO Vittorio Colao told the Wall Street Journal in an interview that India’s bureaucracy was “damaging” to the country. “The concern that I have is that this country is a fantastic country with a bright future, given the demography and everything else, but the bureaucracy of this country… It is clearly damaging to India,” Colao told The Wall Street Journal.
“What is happening to us, to Nokia, to Shell, to SABMiller, all the other companies involved-one could be an accident; too many is a pattern. I think that the government is making a good effort to try to change this, but cannot continue with a bureaucracy that wakes up in the morning and decides to give another interpretation of something,” he added.
India ranks 132 in the World Bank’s Ease of Doing Business Index, below countries such as Nigeria, Kenya and Uganda, and 41 ranks below China.
A top executive at UAE’s Etihad Airways said it was revising a proposal to acquire stake in India’s Jet Airways, citing concerns about the safety of its investment in India. Etihad chairman Hamed bin Zayed al-Nahayan sought an investment protection agreement from Commerce Minister Anand Sharma during a meeting in Dubai.
This week oil giant Shell and Finnish handset maker Nokia found themselves at the receiving end of tax claims that they protested publicly. Nokia said it had filed a letter of objection with tax authorities following an income tax raid on its factory near Chennai.
Shell India said it intended to fight the claim. “Indian taxmen’s $1-billion demand on Shell’s $160-million equity infusion in its loss-making Indian arm about four years ago is an absurdity, and the company will contest it,” Shell India chairman Yasmine Hilton said.
(Source: The Economic Times dated 23-02-2013).
