A public diatribe against two business giants by Prime Minister Narendra Modi’s officials and his ideological allies has unnerved the community, several industry executive told press agency Reuters.
Over the weekend, a magazine travel by members of the Rashtriya Swayamsevak Sangh (RSS) launched an attack on tech giant Infosys for failing to resolve glitches within the taxation website it manages.
The RSS called Infosys “anti-national” for lowering the legal system, sending a chill through the industry wary of falling on the incorrect side of the PM Modi government.
Just last month, the finance ministry “summoned” Infosys’ CEO over the tech issues and in an unusual step took to Twitter to announce the summoning, heightening a media frenzy around an organization that has been the face of India’s IT’s prowess.
And in August, the commerce minister publicly lashed out at the $106 billion Tata Group for criticising proposed stringent rules for e-commerce and said local companies shouldn’t only give some thought to profits.
In India, safeguarding domestic businesses has been PM Modi’s priority. While government or RSS criticism of foreign businesses like Amazon and Monsanto is common, local businesses are rarely caught within the crossfire.
But the newest events have raised concerns among business leaders about whether PM Modi is now taking a hardline approach towards domestic giants also, five industry sources said.
One venture-capital executive said the criticism was like “harassment” of companies and risks souring investor sentiment. Another executive engaging at a worldwide consultancy said “everyone is scared” as businesses don’t need to run foul of the govt.
“The frontal attack on iconic elements of Indian businesses have only buttressed the necessity for companies to make sure they’re conforming, not just with tax issues, but with other government initiatives,” said Dilip Cherian, a picture guru and co-founder of leading Indian PR firm Perfect Relations.
RC Bhargava, chairman of Maruti Suzuki, defended Infosys, saying it had played a key role in building India’s software reputation globally.
“It must explain the glitches, but it does not imply there’s a conspiracy to wreck the country,” he said.
A senior member of RSS, however, said there’s nothing wrong within the way the businesses are criticised, saying they need to be thick skinned and held accountable.
“Why should questions not be raised, have corporates become a holy cow?” said the RSS official who declined to be identified.
Infosys and Tata didn’t reply to an invitation for comment.
So far, PM Modi’s government has not commented on the backlash on social media and from politicians. None of the sources who spoke to Reuters wanted to be identified as they fear a reprisal from the govt. and no industry lobby groups has begin and spoken against the govt. or RSS.
The Indian Express said in a writing it absolutely was “time for India Inc to square up”, saying business leaders had maintained “a studied – and maybe strategic – silence about the vitriol that has been seeping into the general public discourse.”
The Infosys controversy is said to the government’s new taxation filing website launched on June 7. But there have been many glitches which Infosys couldn’t fix, despite assurances.
When the Infosys CEO was summoned in August, the minister of finance conveyed “deep disappointment and concerns,” giving the corporate until September 15 to mend things.
The RSS magazine Panchjanya said the corporate was making the identical mistakes over and yet again, creating doubts about its motives. “There are allegations that the management of Infosys is deliberately trying to destabilize the Indian economy,” it said.
After the furore over the article, Sunil Ambekar, the joint head of the RSS publicity wing, sought to distance the organisation from the contents and said Infosys had made a seminal contribution to the country.
But concerns remain others is also targeted, too.
A investment firm manager with Infosys and Tata investments said he was worried because it indicated “the government wasn’t pro-business”, and there have been fears other companies can face such backlash for lapses.
