India has attracted many a foreign investor. Its spectacular economic growth and huge demographic dividend has attracted many. And investment in India has paid off handsome returns to these investors. But India's very own corporate houses still find the Indian environment hostile to business growth.
In a recent interview to a leading daily, Mr Ratan Tata, Chairman of the Tata Group, has stated that bureaucratic delays, arbitrary regulatory decisions and widespread corruption have been the major obstacle to his domestic ambitions. He does admit that India has come a long way since 1991 when the reforms began and, coincidentally, also when he took on the reigns of the business empire. But even now, the Government tends to play favourites by either delaying projects or by accepting some other project.
Unfortunately, what Mr Tata accuses India of is actually true. Governance has been a problem for India since we can remember. Widespread corruption, scandals, scams have hurt business sentiments in recent times. And the worst part is that though the Government keeps promising to deal with such issues, little is being done in reality. On top of this, getting a project approved from the multitude of ministries is another big headache. Half the time, the strict environment laws rear their head against project sanctions. Even projects that are of national importance are either thwarted before they start or stopped mid-way when the ministry changes its mind about them.
Not to mention the laws that make land acquisition a major hassle. Land is now being used as a political agenda. If one political party woos the industry with land, the other would always step up and use it as an agenda against the party. A politician claiming that the ruling party is 'stealing' the land from the poor and awarding it to the rich is increasingly becoming a common scene in India.
So it is not a wonder that a group like the Tatas that has dazzled the world with its thriving international business, has not expanded in India in the same way, especially in the core sectors like steel, power and telecom. Unless the country changes its policies, India's very own may continue to find India's business environment hostile.