‘Tax vigilantism’ severely hurting India’s economic growth

‘Tax vigilantism’ severely hurting India’s economic growth
Representational Pic

The death of entrepreneur V.G. Siddhartha has brought to limelight the unwarranted and unending pressure being exerted by government authorities of late on corporates in the name of probing tax evasion.

The dramatic disappearance of Cafe Coffee Day (CCD) founderSiddhartha under mysterious circumstances on Monday night and the subsequentdiscovery of his body in the backwaters of Netravathi river near Karnataka'sMangaluru coast on early Wednesday have sent shock waves in the corporate world,as he was an expert in brewing an empire, which ironically took a toll on hislife at the age of 60.

Industry honchos and experts are of the view that the verymethod of crackdown on tax evasion has not only proven futile, but alsohampered entrepreneurship and the overall economic scenario in the country.

Chairman of Manipal Global Education and former InfosysDirector Mohandas Pai has said that the tax justice system is"broken" in India and the Prime Minister and the Finance Ministershould be asked to intervene and handle the scenario.

KiranMazumdar Shaw, Managing Director of Biocon, told a newschannel: "India has moved from Licence Raj to Inspector Raj. There is aneffort to clean India Inc, but the pendulum cannot swing from one extreme tothe other. The government needs to exchange with honest businessmen."

Shaw on Tuesday also retweeted a tweet by one Rajiv Mantriwhich said: "Highest interest rates in the world, usurious income taxrates, triple tax on dividend, tax on buy back, tax on securities transactions,progressive taxation with GST. And then we are surprised, what killedsentiment, what destroyed animal spirits."

The sentiments among the corporates seem to be very subduedand negative with regard to the economic and tax scenario in the country.

The whole issue came to light after Siddhartha's letter tohis comapny's board became public, which said: "I am very sorry to letdown all the people that put their trust in me. I fought for a long time buttoday I gave up as I could not take any more pressure from one of the privateequity partners forcing me to buy back shares, a transaction I had partiallycompleted six months ago by borrowing a large sum of money from a friend."

As support poured in for Siddhartha, fugitive businessmanVijay Mallya too pitched in with his words of condolence as he correlated theCCD chief's situation with his own.

"I am indirectly related to VG Siddhartha. Excellenthuman and brilliant entrepreneur. I am devastated with the contents of hisletter. The Govt Agencies and Banks can drive anyone to despair. See what theyare doing to me despite offer of full repayment. Vicious and unrelenting,"Mallya tweeted on Wednesday.

"In Western Countries, Government and Banks helpborrowers repay their debts. In my case they are obstructing every possibleeffort for me to repay my debt whilst competing for my assets. As far as theprima facie criminal case goes wait for the appeal granted," Mallya saidin another tweet.As several crackdowns have taken place in thelast few months with the government taking a tough stand on any form of taxevasion, the unwarranted and continuous pressure on several corporates actuallygoes against the government's own philosophy of "ease of doingbusiness", eventually hurting the industry and the cycle of job creation.

No stories found.
Greater Kashmir