Various scams and labour unrest in several parts of the country have created a negative sentiment about India among investors, said Adi Godrej, president of the industry body, Confederation of Indian Industry (CII), adding the government should be “more transparent” in decision making process.
“The investor sentiment will improve if the decision making process of the government becomes more transparent, which is also our (CII’s) agenda – growth through reforms and governance. If this (decision making) becomes transparent, it will also bring down corruption,” Godrej, who is also the chairman of Godrej Consumer Products Ltd, told reporters here.
B Santhanam, deputy chairman of CII southern region and and managing director of Saint-Gobain Glass India Ltd, added scams were global phenomenon. However what is important is the speed at which they are resolved in other parts of the World, he said.
The country’s auditor, Comptroller and Auditor General of India, in a recent report, said the exchequer lost Rs 1.86 lakh crore due to alleged irregularities in coal allocation.
Other factors that affect the economy and investor sentiments, according to Godrej, are issues related to infrastructure and the recent power grid failure. “We need to control subsidies and more government disinvestment should be looked at and initiate reforms including implementing GST (goods and services tax), announcing fiscal stimulus and allowing FDI (foreign direct investment) in aviation, pension and retail.”
Asked about CII's stand on recognising labour unions in factories by corporations, Godrej said: “We are not against legal labour unions, but what happened in Maruti's plant is unfortunate and it also created a negative sentiment among the investor community.”
In a violent scuffle between workers and the management at Maruti Suzuki India Ltd’s plant in Manesar, Haryana, onJuly 18, one senior executive was killed and several injured. Following the violence, the company, India’s largest passenger car maker, locked out the Manesar plant for a month.
Godrej said the industry must ensure “fringe elements with non-labour agendas” should not come into the workforce. “There is a feeling that Naxal elements are trying to enter trade unions. That is being investigated. But we have to be careful of undemocratic elements.”
Added Santhanam: “We are telling the companies to solve the labour issues at the unit level and now allow them to escalate. He added both on the corporate and Union side the next generation understanding is lacking.”
The government should also accelerate investment in infrastructure, especially in power projects, said Godrej. “We have enough generation capacity, but we are not able to utilise it fully, since we dont have fuel. The coal sector need to be privatised.”