Last month, the Ministry of Finance “summoned” the director general of Infosys for technical problems on the income tax website. (File)
New Delhi:
A public diatribe against two business giants by officials of Prime Minister Narendra Modi and his ideological allies has upset the business community, several industry executives told Reuters news agency.
Over the weekend, a magazine run by members of the Rashtriya Swayamsevak Sangh (RSS) launched an attack on technology giant Infosys for failing to solve the problems of the income tax website it manages.
The RSS called Infosys “anti-national” for dropping the tax system and sending a heater into the industry on account of falling on the wrong side of Prime Minister Modi’s government.
Just last month, the Ministry of Finance “summoned” the CEO of Infosys for technological issues and, in an unusual step, took to Twitter to announce the call, which increased the media frenzy around of a company that has been the face of India’s IT skills.
And in August, the Commerce Minister publicly attacked the Tata Group’s $ 106 billion to criticize the proposed strict rules for e-commerce and said local businesses should not just think about profits.
In India, protecting domestic companies has been PM Modi’s priority. While government or RSS criticism of foreign companies such as Amazon and Monsanto is common, local companies are rarely caught in the crossfire.
But recent events have raised concerns among business leaders about whether Prime Minister Modi is now also taking a hard-line approach to national giants, five industry sources said.
A venture capital executive said the criticism resembled “harassment” of companies and that it runs the risk of dampening investor sentiment. Another executive working at a global consultancy said “everyone is scared,” as companies don’t want to hurt the government.
“The frontal attack on iconic elements of Indian companies has only reinforced the need for companies to ensure that they comply, not only with tax issues, but with other government initiatives,” said Dilip Cherian, image guru and co-founder of leading Public Relations Company Perfect Relations.
RC Bhargava, president of Maruti Suzuki, defended Infosys, saying it had played a key role in building India’s software reputation globally.
“He has to explain the problems, but that doesn’t mean there is a conspiracy to damage the country,” he said.
A senior RSS member, however, said there is nothing wrong with the way companies have been criticized, saying they should have thick skin and they should respond.
“Why shouldn’t questions be asked, if companies have become a holy cow?” said the RSS officer who did not want to identify himself.
Infosys and Tata did not respond to any requests for comment.
India Inc. largely silent
So far, Prime Minister Modi’s government has not commented on the reaction on social media or politicians. None of the sources who spoke to Reuters wanted to be identified as they fear government retaliation and there has been no industry pressure group that has spoken out against the government or RSS.
The Indian Express said in an editorial that “it was time for India Inc. to stand up,” and said business leaders had maintained “a studied and perhaps strategic silence on vitriol that has been leaking into public discourse.” .
The Infosys controversy is related to the government’s new website to file income taxes launched on June 7th. But there were many problems that Infosys could not solve, despite the guarantees.
When the CEO of Infosys was convened in August, the finance minister conveyed “a deep disappointment and concern,” which he gave the company until September 15 to sort things out.
RSS magazine Panchjanya said the company made the same mistakes over and over again, raising doubts about its motives. “There are allegations that Infosys management is deliberately trying to destabilize the Indian economy,” he said.
After the furore over the article, Sunil Ambekar, the joint head of the RSS advertising wing, tried to distance himself from organizing the content and said Infosys had made a key contribution to the country.
But the concerns remain others that can also be pointed out.
An investment fund manager with Infosys and Tata Investments said he was concerned, as he indicated that “the government was not in favor of companies”, and there were fears that other companies could face this backlash.