In early December, Deepak Parekh, chairman of the national mortgage and banking giant, HDFC, articulated what most businessmen and investors in India have been fretting over for a while—the exodus of Indian business in the last four years to more flexible markets abroad. “The big boys of business are looking overseas, and the big boys in government are pulling in different directions...(it’s) a very sorry state of affairs,” he said.
From the outside, Parekh’s disappointment seems misplaced. India’s seen 8.5 per cent GDP growth this year. Consumer confidence and demand is high. Foreign investors are pouring in. Indian companies are going global. But even as commercial opportunities have opened up in India, making it a more accessible market for foreign players, Indian firms feel increasingly claustrophobic and straitjacketed at home. Archaic tax systems, restrictive labour laws, derelict infrastructure and, worst of all, a decline in governance and increase in graft make business depart gladly for foreign shores.