With India’s economic growth faltering and showing no signs of revival, industrialists are increasingly feeling disenchanted with the government and some are even making public statements. The latest to do so is Rahul Bajaj, the Chairman of a prominent two and three-wheeler manufacturer, Bajaj Auto Ltd.
At the 12th annual general meeting of Bajaj Auto, Moneycontrol.com reports, the 81-year-old billionaire said,“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.”
He pointed out that the latest data on Indian economy from the International Monetary Fund and the World Bank clearly show 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,” Bajaj said.
The Indian auto industry has been facing one of the worst slowdowns, with sales across segments declining sharply month after month for a year. It started in September last year after India’s largest shadow banker ILF&S defaulted on interest payouts.
Rahul Bajaj’s son, Bajaj Auto Managing Director Rajiv Bajaj, also attacked the government for its frequent policy changes on electric vehicles, which have left the auto industry confused.
He said, “For the past two years, there have been a lot of flip-flops … Sometimes they blow hot, sometimes they blow cold. Sometimes they make very definitive statements. Their own colleagues contradict their statements. And people in the industry are quite confused.”
The industry body Society of Indian Automobile Manufacturers has been urging a reduction in the goods and services tax rates on automobiles. The pleas have not yielded any action from the government.
The auto ancillary sector is already facing job losses. According to Automotive Component Manufacturers Association, nearly a million people have been let go over the last year with the lion’s share being contract workers. The numbers could grow even further in the coming months with absolutely no respite in sight.
Biocon Chairman and Managing Director Kiran Mazumdar-Shaw also batted for a tax cut for the auto industry. She recently tweeted, “GST Council trims rate on electric vehicles, chargers to 5% – needs to reduce GST from 28% to 18% immediately if auto sector is to be saved and a million jobs protected.”
Early this month another industrialist Adi Godrej, who heads the consumer goods giant Godrej Group, expressed concern over the rise in religious hate crimes and warned it could seriously affect economic growth.
At a public function in Mumbai, Godrej warned that economic growth would be affected if “rising intolerance, social instability, hate crimes, violence against women, moral policing, caste and religion-based violence and many other sorts of intolerance that are rampant” were not contained to ensure social harmony. He also pointed out that unemployment was at a four-decade high and should be tackled at the earliest.
Without naming anyone or any issue in particular, software giant Infosys co-founder N.R. Narayana Murthy recently lamented that India was no longer the country its freedom fighters had fought for.
“If you look at what is happening in different parts of the country today, it is time that we, especially the youth, stood up and say this is not the kind of the country our forefathers had got the freedom for. But how many of us are doing it? Nobody is doing it, sadly. That’s the reason why this country is in this state that it is. Nobody wants to displease anybody by saying what is wrong,” he said at a function in Mumbai.
Interestingly corporate India had overwhelmingly backed Narendra Modi and the ruling Bharatiya Janata Party (BJP) during the recent general elections, feeling their election would ensure continuity and stability. They were even willing to overlook the disruptions caused by religious and hate crimes and by the controversial decision to ban high-value currency during the Modi government’s previous term, as they felt the Congress-led coalition was too weak and inspired little confidence.
According to audit reports and income tax reports submitted in April by political parties to the Election Commission, the BJP was the biggest beneficiary of electoral bonds, garnering 94.5% of them worth around 2.1 billion rupees.