Skip to main content

Modi is "squandering" his strong mandate, in four months multinationals' honeymoon is "nearing its end"

Vodafone's Marten Pieters
By Our Representative
In a commentary, "Modi allure dims for multinationals awaiting ‘big bang’ in India", the world's one of most influential business papers, the Financial Times (FT), has warned Narendra Modi that "honeymoon is nearing its end for the growing ranks of investors disappointed by the dearth of radical economic reforms." Authored by Victor Mallet and James Crabtree, in a strong critique of Modi's economic policies, FT has said, the Indian Prime Minister's "first four months in office" suggest that he is "squandering his strong mandate".
It adds, "Indian and foreign business leaders backed Modi in May’s election because he offered a change from a decade of corruption and indecision." But now they feel "frustrated by his government’s failure to rescind retrospective legislation and rulings that have left multinationals confronted with surprise tax bills running into billions of dollars."
Quoting some of the senior executives, FT says, "Marten Pieters, chief executive of Vodafone India, spared neither Modi’s BJP government nor its Congress predecessor when he last week pronounced the country’s vital telecommunications sector 'simply a mess'." Pieters had opined how Vodafone made big investments in China.
“Last year China invested $50bn in its networks. We did five [$5bn],” he told a conference in New Delhi organised by The Economist. "Vodafone had sought an advance tax ruling nine months ago so that it could raise equity to bid for spectrum in an auction next February without another tax dispute, but had yet to hear the outcome", FT said, adding, last week Pieters "got the news that the officer dealing with the file has retired.”
In fact, top executives in India want India go in for major economic reforms. FT quotes Gurcharan Das, former head of Procter & Gamble in India, to say that “if he wants to make India a manufacturing hub, we will need the big bang reforms.” But "Modi has so far taken none of the revolutionary steps business had hoped for, such as full privatisation of state companies or liberalisation of labour laws", points out FT, adding, "He never promised those, in any case, and Modi does score high marks for re-energising the bureaucracy."
In the meantime, underlines FT, "Modi’s government has backed out of a world trade accord sealed by its predecessor that was meant to trim red tape and reduce customs burdens. It has also failed to implement an increase in the price of natural gas paid to producers." Suggesting this is discouraging top players in the field, it quotes Sashi Mukundan, regional president of British Petroleum to say, “We can’t make a [planned] $4bn investment without knowing what’s going to be the policy for gas pricing. China has implemented it. India is still waiting.”
"One problem identified by investors is that cabinet ministers lack experience and technocratic skills to run a $1.8tn economy, while decision-making is concentrated in the prime minister’s office", FT says. It quotes Banmali Agrawala, head of General Electric in south Asia to say, “It looks like we are pinning a lot of hopes on just one individual,” with others agreeing that "there’s nobody there who has any experience running anything. The problem is that the BJP does not have depth of administration.”
Recalling that economists at Nomura forecast foreign direct investment into India will rise to $30bn this financial year from $22bn last year, FT believes, "But that will flow mostly into sectors such as pharmaceuticals and e-commerce, rather than power and infrastructure where India most needs capital. Oil and gas groups are deterred by the financial disputes in which successful explorers such as Cairn India have become embroiled. Nor are global power companies keen to enter the dysfunctional energy market, despite a huge projected electricity shortfall."
In fact, FT suggests, multinationals believe that mining is going to be a major grey area where they will not be interested in investing any more. Thus, "Balfour Beatty, Britain’s largest construction company by sales, quietly pulled out of India last year, having decided that it could not make money in a country whose previous government pledged to spend $1tn on new infrastructure by 2017."
Insisting that "mining is another no-go area", the paper says, "Global groups such as Rio Tinto have long wanted the chance to dig up some of India’s vast coal reserves. But amid the recent 'Coalgate' scandal over the allocation of mining rights, foreign investors would be reluctant to enter even if Modi opened the door."

Comments

TRENDING

'Flawed' argument: Gandhi had minimal role, naval mutinies alone led to Independence

Counterview Desk Reacting to a Counterview  story , "Rewiring history? Bose, not Gandhi, was real Father of Nation: British PM Attlee 'cited'" (January 26, 2016), an avid reader has forwarded  reaction  in the form of a  link , which carries the article "Did Atlee say Gandhi had minimal role in Independence? #FactCheck", published in the site satyagrahis.in. The satyagraha.in article seeks to debunk the view, reported in the Counterview story, taken by retired army officer GD Bakshi in his book, “Bose: An Indian Samurai”, which claims that Gandhiji had a minimal role to play in India's freedom struggle, and that it was Netaji who played the crucial role. We reproduce the satyagraha.in article here. Text: Nowadays it is said by many MK Gandhi critics that Clement Atlee made a statement in which he said Gandhi has ‘minimal’ role in India's independence and gave credit to naval mutinies and with this statement, they concluded the whole freedom struggle.

BSF should take full responsibility for death of 4 kids in West Bengal: Rights defender

By Kirity Roy*  One is deeply disturbed and appalled by the callous trench-digging by BSF in Chetnagachh village under Daspara Gram Panchayat, Chopra, North Dinajpur District, West Bengal that has claimed the lives of four children. Along the entire stretch of Indo-Bangladesh border of West Bengal instead of guarding the actual border delineated by the international border pillars, BSF builds fences and digs trenches well inside the Indian territory, passing through villages and encroaching on private lands, often without due clearance or consent. 

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

How GMOs would destroy non-GMO crops: Aruna Rodrigues' key submissions in SC

Counterview Desk The introduction of Bt and HT crops will harm the health of 1 billion Indians and their animals, believes Aruna Rodrigues, who has made some 60 submissions to the Supreme Court (SC) during the last 20 years. As lead petitioner who filed Public Interest Litigation in 2005, during a spate of intense hearings, which ended on 18 January 2024, she fought in the Apex Court to prevent the commercialization of genetically modified organisms (GMOs) in Indian agriculture. 

Social justice day amidst 'official neglect' of salt pan workers in Little Rann of Kutch

By Prerana Pamkar*  In India’s struggle for Independence, the Salt Satyagraha stands as a landmark movement and a powerful symbol of nonviolent resistance. Led by Mahatma Gandhi, countless determined citizens walked from Sabarmati Ashram to Dandi in Gujarat. However, the Gujarat which witnessed the power of the common Indian during the freedom struggle is now in the throes of another significant movement: this time it is seeking to free salt pan workers from untenable working conditions in the Little Rann of Kutch (LRK).

Corporatizing Indian agriculture 'to enhance' farmer efficiency, market competitiveness

By Shashank Shukla*  Today, amidst the ongoing farmers' protest, one of the key demands raised is for India to withdraw from the World Trade Organization (WTO). Let us delve into the feasibility of such a move and explore its historical context within India's globalization trajectory.

Jallianwala massacre: Why Indian govt hasn't ever officially sought apology from UK

By Manjari Chatterjee Miller*  The king of the Netherlands, Willem-Alexander, apologized in July 2023 for his ancestors’ role in the colonial slave trade. He is not alone in expressing remorse for past wrongs. In 2021, France returned 26 works of art seized by French colonial soldiers in Africa – the largest restitution France has ever made to a former colony. In the same year, Germany officially apologized for its 1904-08 genocide of the Herero and Nama people of Namibia and agreed to fund reconstruction and development projects in Namibia. .

Interpreting UAPA bail provisions: Is Supreme Court setting the clock back?

By Kavita Srivastava*, Dr V Suresh** The Supreme Court in its ruling on 7th February, 2024 in   `Gurvinder Singh v State of Punjab’ held that its own well-developed jurisprudence that "Bail is the rule and jail the exception" will not apply to those charged under the UAPA.

A 'distorted narrative' of Indian politics: Congress failing to look beyond LS polls

By Prem Singh*  About 15 days ago, I told a senior journalist friend that there are not even two   months left for the Lok Sabha elections, Rahul Gandhi is roaming around on a delectation (tafreeh). The friend probably found my comment exasperating and replied that he is not on a delectation trip. The conversation between us on this topic ended there. 

Livelihood issues return to national agenda ahead of LS polls: SKM on Bharat Bandh

Counterview Desk  Top farmers' network, the Samyukta Kisan Morcha (SKM) has claimed big success of Grameen Bharat Bandh and industrial /sectoral strikes, stating, the “struggle reflected anger of farmers, workers and rural people across India”, adding, the move on February 16 succeeded in bringing back peoples’ livelihood issues in the national agenda just ahead of the general election to the Lok Sabha.