Popular spiritual leader Jaggi Vasudev has divined what is scaring investors away from India. No one wants to invest in a country “where buses burn”, he explained in a recent interview to NDTV on the sidelines of the World Economic Forum at Davos. He was referring to the ongoing protests against the Citizenship Amendment Act. Vasudev believes these are violent (they are mostly peaceful) and largely restricted to Delhi but are doing their bit to damage the Indian economy.
He did not mention that the government may be doing its bit to damage India’s image as an investment destination as well. Amazon founder Jeff Bezos’s recent visit is a case in point. The American tycoon landed in India, donned a Nehru jacket, dished out compliments and a promise to invest an additional $1 billion in the country. But the government was not impressed.
The prime minister refused to grant him an audience. Commerce and Industry Minister Piyush Goyal said Bezos was not “doing a great favour” to India by promising to invest more. The tycoon was most likely trying to fund losses made because of “predatory pricing” and “unfair trade practices”, Goyal said. The Competition Commission of India has even ordered an investigation on Amazon and its rival e-retailer, Flipkart, for these practices.
The government may have valid concerns about retailing giants undermining small, local businesses. But its churlishness may be explained, in part, by the critical coverage of recent developments in India by the Washington Post, owned by Bezos.
An investment paradise
Apart from pesky protesters, Vasudev claimed, India had a very positive image as an investment destination. The claim is belied by the experience of several foreign investors, grappling with massive retroactive tax demands and sudden changes in regulations.
But then, Vasudev may have been taking his cue from the government itself. Faced with growing evidence of an economic slowdown, ministers have established a unique track record of misdiagnosing the problem. Automobile sector in trouble? Blame it on millenials taking Uber and Ola taxis rather than buy cars. Onion prices soaring? Onions are unnecessary if you are a true vegetarian. Falling GDP growth? Let’s get postmodern about this: what is the GDP anyway?
So if concerns about the citizenship protests are raised at the World Economic Forum, the problem cannot be that the government passed a communal law that tarnishes India’s image as a secular democracy. That is not bad for investment at all. Instead, let’s blame the protesters out on the streets trying to protect the idea of a secular democracy.