You give the Modi government 8 out of 10. What's lacking?
I won’t give 10 out of 10 because of two things. Firstly, it is because of failure of the justice system. Where are the reforms in the justice system? Are we getting cases settled today faster than 10 years ago? No. India requires at least 50 judges per million population. We are at 21. We need more technology, which is in place to help, but we are all suffering because the courts take a lot of time. Tax disputes have gone up from Rs 4.5 lakh crore in 2014 to Rs 12 lakh crore in 2023. About 97 per cent of assets get the refunds immediately or within time. That is great news, but corporate structure suffers. LIC got a refund of Rs 25,000 crore on appeal – the person who raised the demand should be punished. Why did you raise the demand which is wrong? So, we need to have a tax system where within three years appeals are heard and closed. We have a tax system where you get stuck in appeal because somebody raised the demand on you. It takes 15-20 years. Look at the contingent liability in the balance sheet of most companies, one of the highest amongst them is ‘tax demand’. This is a big problem.
Secondly, regulatory bodies and enforcement agencies, while operating autonomously and free from political influence, lack efficiency in delivering swift justice. Premature media leaks of impending actions tarnish reputations. When they go and raid everybody, they come back and say, ‘we got Rs 5,00,000 crore etc,’ and what happens? The appeal, when it is heard, most of it is struck down. Meanwhile, it damages people’s reputation. Overreach of the regulatory agencies need to be looked into. Why create the element of fear?
Where does the RBI come into this picture?
If you know, RBI made the circular about provisioning norms. They could have just called the top 10 people who have done that and penalised them. Why call everybody? Today, many of the banks have invested in funds and they are not giving any money. Do you want them to be called defaulters? Why destroy the system without discussing? Sebi has got the best system, whereby they consult industry and come out with good regulations. RBI should also have this. While RBI does a great job, in some areas they must consult. That has to improve. We are stuck with the past and it is holding us back. ‘Ease of business’ should improve. Modi has done a lot for ‘ease of business’, but all these things are holding us back. Tax departments should stop these high pitch assessments and finish up all the appeals.
G20 Sherpa Amitabh Kant says private capex needs to improve...
It is improving. Let him look at data. India invests USD 1 trillion and from the government side it is at USD 250 billion. Where is the other bit coming from? Look, what's happening is they are looking at the CMI data, which are based on announcements. Companies are doing maintenance CapEx, they are investing, which is captured from the database. Our national income statistics says USD 1 trillion (31 per cent). But where is the balance coming from? So, I think we need to talk with data and the problem is we do not.
Does India have a dearth of AI and Generative AI startups? Is the country falling behind?
No. But there's a dearth of money. We get 700 companies who come to my office for capital. Almost everybody says, "I am doing AI". What is AI? We have to be careful. AI has got something called algorithms. Only a few companies can do the ChatGPT-kind algorithm. Secondly, the use of an algorithm to do a lot of work – that anybody can do. And the third is vertical AI, BFSI AI, Health AI, which many people are building. However, you need capital. How much money does OpenAI invest into its products? How much money is going into ChatGPT? And compare that to how much money is coming into India? Where is the capital? Don't blame us and say we don’t have startups in AI. Everybody writes a report, but where is the money? The US invested USD 2.34 trillion from 2014 to 2023 in ventures and startups, and China invested USD 832 billion. Meanwhile, India invested USD 145 billion.
… and where should the impetus come from?
It should come from institutional investors such as LIC. It has got a balance sheet of Rs 50 lakh crore and how much are they investing? A foreign insurance company with a balance Rs 60 lakh crore, the Canadian Pension Fund (Canada Pension Plan) has come here, invested USD 10 billion. They are investing, why can’t Indian Institutional Investors invest? The Canadian Pension Fund takes interest rate risk, country risk and invests - and they make money. Why can’t Indian institutional investors invest? IRDAI is fallen way behind the curve. We have kept talking to them for two years. They need to solve this problem with speed and agility.
Experts tell BW Businessworld that the 10,000-GPU plan, as per IndiaAI Mission, may be on the lower side. What is your opinion on this?
Yes, we need the hardware but it is in short supply. But this plan is a starting point. Do you think Ambanis or Airtel or many others do not have the money to buy GPUs? It will happen in due time.
Also Read: India Needs To Grow At 9-10% For Next Three Decades, States Must Contribute More: Amitabh Kant
