Hitting back at corporate honchos criticising the government over the current state of the economy, Corporate Affairs Minister Veerappa Moily on Thursday said “perceptions cannot undo fundamentals” and Azim Premji and Narayana Murthy should speak with optimism.
“We have come out from 2008 depression... of 2010 depression. In 2011-12, our FDI position is very good, you cannot say it is not good. Perception cannot undo fundamentals,” Mr. Moily told PTI in an interview.
He was reacting to IT major Wipro Chairman Azim Premji’s statement that a “leaderless” India’s image has suffered internationally. Also, Infosys co-founder N.R. Narayana Murthy has lamented over the current state of affairs of the economy.
“We could face two world economic Tsunamis...this can be managed if positive perceptions come. Like Mr. Premji and Mr. Narayana Murthy should become the champions of the country. I require them to speak with that kind of a patriotism, which is necessary,” he said, adding, “If what Premji and Narayan Murthy is correct, how can Mukesh Ambani say that they are confident to have a market cap of Rs one trillion crore?”
He added that while it was a fact that many important Bills were awaiting Parliamentary approval, the onus was not on the UPA-led government, but on opposition parties not allowing passage of the Bills.
“Yes, there are certains Bills pending, like GST, DTC, they are pending no doubt and that is beyond our control, because ultimately Parliament has to do it and in Parliament there is confrontation attitude from the opposition, mainly the BJP, they are not allowing these measures to be passed,” he said.
For this, Prime Minister Manmohan Singh should not be held responsible or touted as an ineffective leader, Mr. Moily added.
“So, for that you cannot blame everything to the leader. Manhomhan Singh, the other day Obama gave best certificate, and when he (Singh) starts speaking the entire world looks at him, and our own people are declining (him)” Mr. Moily said.
Corporates and growth
On being asked if he agreed with his colleague Mani Shankar Aiyar’s remarks that Mr. Premji and others represent a class interest and the Government represented national interest, Mr. Moily that was “not correct” and corporates’ role cannot be underestimated.
“That is not the correct thing. Ultimately, corporates are creating wealth in the country, you cannot paralyse them.
They create employment, they create wealth. Their role cannot be underestimated. Unless, wealth is created how do you eradicate poverty. Corporate tax is 70 per cent of government revenue. If that goes, how will we finance schemes?” he said.
He further said that Indian companies were able to expand abroad because of the country’s reputation as a growing economy and it was also their duty to protect that reputation.
“So many companies have gone abroad now it is because of country’s reputation. They get reputation because of the country’s growth story, that they should not forget. If they cut their own roots of reputation, who will suffer ultimately? They will suffer. Protecting the business reputation is their duty, they need to do it,” he said.
He further said corporates should not depend on money inflows from Foreign Institutional Investors (FIIs), but cultivate domestic investors.
“Domestic savings is highest in the world but that money is not coming to capital markets. If that money gets into the market and remains sustained, capital market stabilises. This is what our corporates should inspire. They consider only FIIs as their capital, it cannot be...These are issues we need to address?,” he said.
S&P credit rating
He also hit back at Standard and Poor’s for threatening to downgraded the country’s credit rating to below the investment grade.
The economy has earned growth rate of 8—9 per cent over nine years and that “cannot be annulled because of some downgrade”, Mr. Moily said.
“S&P downgrading us, what is that criteria? If we judge by strict economic parameters and not by perception definitely this country has done sustainably better,” he added.
On Monday, threatening to downgrade the country’s rating, S&P had said India could be the first BRIC (Brazil, Russia, India, China) nation to falter and fall below investment grade