All’s well that ends well. But not quite all the time. With Toyota Kirloskar Motor (TKM) committing to invest Rs 2,000 crore in the next one year, just after its whole-time director Shekar Viswanathan said that the company was not willing to scale up operations due to high taxes on cars and motorbikes, the Center tried to signal that everything was hunky-dory.
However, even as the government tried to downplay the 24-hour TKM drama, the episode is a reflection of ground realities as well as a wake-up call for Prime Minister Narendra Modi and his team.
Prakash Javadekar, Heavy Industries Minister, tweeted, “The news that Toyota Company will stop investing in India is incorrect. @vikramkirloskar has clarified that Toyota will invest more than ₹2,000 crore in next 12 months.”
“This (report that TKM was not willing to scale up operations) was misrepresented. There is nothing to worry about,” said a senior government official.
Instead of firefighting, the need of the hour for the Center is to provide a comfortable investment environment to the private sector. Policy continuity and regular dialogue between government and industry are key to create a conducive environment.
In 2017, Union Minister Piyush Goyal sent jitters to the automobile manufacturers as well as potential customers when at a Ficci function, he said that the government was working to ensure that the country was able to move to an all-electric car fleet by 2030.
Pahle India Foundation’s (PIF) senior fellow and head of research Nirupama Soundararajan said that the investment environment in the country needs to be significantly improved. “We have a long way to go. The industry must feel comfortable in investing money and to create that environment, it is important to rethink the strategy,” Soundararajan told IndiaNarrative.
She added that with the increase in economic uncertainty, investors are shying away from putting in money. “So this is the time when it is all the more important to create an environment of comfort for investors,” Soudararajan said.
Private investment in the country has been sluggish for years now, even as India is placed at the 63rd position in the World Bank’s Ease of Doing Business index. And now with the gross domestic product (GDP) contraction of 23.9 per cent and unprecedented uncertainty, investment has further dropped though the government has carried out several reform processes.
Confederation of Indian Industry’s (CII) chief economist Bidisha Ganguly however said that a host of measures has been rolled out to boost investments and manufacturing in the country. “There is no denying that several measures such as Performance Linked Investment (PLI) scheme and reduction in corporate taxes are already on, so there is no need for any worry,”
India was at the 140th position in the ‘Ease of Doing Business’ ranking when the Modi government took charge in 2014..