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India's Criticism Of Infosys, Tata Worries Businesses

A mutual fund manager with Infosys and Tata Investments said he was concerned as he indicated that “the government was not pro-business,” and there were concerns that other companies might face the to such a reaction in the event of failure.

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A public rant against two Indian business giants by officials of Prime Minister Narendra Modi and his ideological allies has pissed off the business community, several industry executives told Reuters.

Over the weekend, a magazine run by members of Hindu nationalist Rashtriya Swayamsevak Sangh (RSS) launched an attack on Indian tech giant Infosys for failing to fix problems with the website of the income tax it manages.

The group, which is the ideological parent of Modi’s ruling party, called Infosys “anti-national” for letting down the tax system, sowing chills in Indian industry fearing it would fall on the wrong side of the Modi government.

Last month, the finance ministry “summoned” the CEO of Infosys about technology issues and, to an unusual extent, took to Twitter to announce the summons, escalating the media frenzy around a company that has been the face of India’s computing prowess.

And in August, the commerce minister publicly lambasted the $ 106 billion Tata group for criticizing the proposed strict rules for e-commerce and said local businesses shouldn’t just think about profits.

In India, safeguarding national companies has been Modi’s priority. While government or RSS criticism of foreign companies like Amazon and Monsanto is common, local businesses are rarely caught in the crossfire.

But the latest events have raised concerns among business leaders about whether Modi is also taking a hard-line approach towards the domestic giants, five industry sources said.

A venture capital executive said the criticism amounted to “harassment” of companies and risked souring investor sentiment. Another executive working at a global consulting firm said that “everyone is scared” because companies don’t want to clash with the government.

“The frontal attack on iconic elements of Indian businesses has only reinforced the need for companies to ensure that they comply not only with tax matters but also with other government initiatives,” said Dilip Cherian, image guru and co-founder of the leading Indian company. Perfect Relations public relations firm.

RC Bhargava, chairman of Maruti Suzuki, defended Infosys, saying he had played a key role in building India’s global software reputation.

“This should explain the problems, but it does not mean that there is a plot to harm the country,” he told Reuters.

A senior member of RSS, however, said there was nothing wrong with the way companies have been criticized, saying they need to be pissed off and held accountable.

“Why shouldn’t the questions be raised, have businesses become a sacred cow? Said the head of RSS who refused to be identified.

Infosys and Tata did not respond to a request for comment.

HIGHLY QUIET INDIA INC

So far, Modi’s government has not commented on the reaction from social media and politicians. None of the sources who spoke to Reuters wanted to be identified because they feared government reprisals and no Indian industry pressure groups came forward to speak out against the government or the RSS.

The Indian Express said in an op-ed that it was “time for India Inc to stand up,” saying business leaders have maintained “a studied – and perhaps strategic – silence on the vitriolic that has risen infiltrated into public discourse “.

The Infosys controversy is linked to the new government tax filing website launched on June 7. But there were many problems that Infosys could not solve, despite the assurances.

When the CEO of Infosys was summoned in August, the finance minister voiced “deep disappointment and concern”, giving the company until September 15 to work things out.

Panchjanya magazine said the company made the same mistakes over and over again, creating doubts about its motives. “There are allegations that the management of Infosys is deliberately trying to destabilize the Indian economy,” he said.

After the fury over the story, Sunil Ambekar, co-head of RSS’s advertising wing, sought to steer the organization away from content and said Infosys had made a fundamental contribution to the country.

But concerns remain, others could also be targeted.

A mutual fund manager with Infosys and Tata Investments said he was concerned as he indicated that “the government was not pro-business,” and there were concerns that other companies might face the to such a reaction in the event of failure.

(Reuters)


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