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Sunday, September 19, 2021

Play ‘nationalistic role’, back up MSMEs, startups: Goyal to big biz

Commerce Minister Piyush Goyal prodded India’s leading business groups to set aside a corpus of Rs 10,000 crore for startups to prevent them from being acquired “cheaply” by foreign investors

By: ENS Economic Bureau | New Delhi |
Updated: August 15, 2021 1:33:49 am
Commerce minister, piyush goyal, India big businesses, india small businesses, India startups, tata group, indian express, indian express newsIndustry and Commerce Minister Piyush Goyal (File)

Weighing in on the debate over the improved prospects of large corporations and their apparent neglect of smaller enterprises, Commerce Minister Piyush Goyal called on the big companies to play “a nationalistic role” in supporting MSMEs and startups.

Even as he prodded India’s leading business groups to set aside a corpus of Rs 10,000 crore for startups to prevent them from being acquired “cheaply” by foreign investors, Goyal targeted Tata Sons — the holding company of Tata group — for “opposing consumer protection regulations” for e-commerce. Speaking at a virtual session organised by the Confederation of Indian Industry (CII) on Thursday, he said the 153-year-old group was, instead, according “greater importance” to newly acquired businesses, than to national interest.

“Can CII not take the lead and set up a corpus of at least Rs 10,000 crore (to fund startups)?… We should all, Tatas, Ambanis, Bajaj, Birla. All of you should be pitching in, even if you pitch in Rs 100, 200, 500 crore, our startups will get such a big help and they will not be bought out cheaply by foreign investors,” said Goyal, noting that these companies would make profits on such investments and that even if a few startups failed the corporate could sacrifice this much for the country.

Goyal also called on large corporations to commit to paying MSMEs within a few days of receiving supplies. “Can all CII members have the “synergy” to commit to pay all MSMEs within seven days of supply?” Goyal said, noting while large corporations had many ways to raise funds, MSMEs did not have easy access to funds.

“Synergy between you and me (government) will come later, first (industry bodies) CII, FICCI, ASSOCHAM, PHD, get together and improve synergy within industry,” the Commerce Minister remarked in a session titled “synergy between government and business for sustainable growth.”

Citing the Tata group’s reported opposition to proposed e-commerce consumer protection regulations, Goyal directly addressed Banmali Agrawala, president, infrastructure and defence & aerospace, Tata Sons.

“… frankly Banmali ji, I feel very sad that a company like yours … you have acquired one or two foreign companies, now they have become more important than national interest,” said Goyal, adding, “Me, myself, my company, we will all have to move ahead from this.” The Tata group has acquired a majority stake in BigBasket and has reportedly raised concerns about proposals to tighten e-commerce regulations. The CII later removed the video of the session from its Youtube channel.

Goyal said foreign companies were not following FDI rules in spirit, but were only trying to “squeeze their conduct in the ambit of FDI rules,” and asked that Indian companies resist this kind of greed shown by foreign players.

A senior member of the CII, who did not want to be named, said Goyal’s comments have led to “some disappointment in the industry but the subtext of his outburst that there is need to support smaller enterprises and communities hasn’t gone unnoticed”.

The Confederation of All India Traders said the comments by the Minister were the first time an elected government representative has talked about inclusive growth of big and small businesses. “There is no doubt Indian corporate houses have contributed to the growth of India but there are 80 million small and medium traders whose survival and well-being has been completely ignored by these corporate houses who have colluded with multinational giants to plunder India’s retail market and destroy the business ecosystem by twisting it for their own selfish gains,” said CAIT national president BC Bhartia.

Goyal flagged issue of “industry prioritising profits” over national interest, noting the example of a firm that had opposed an anti-dumping duty, which would have raised the cost of their final product by only 10 paise if procured inputs from Indian companies.

Citing nationalist tendencies in other economies, Goyal asked if a major steel producer like Tata Steel could sell steel to industry in Korea or Japan. “Does anyone buy it? The government has not stopped you. The industry there doesn’t buy your steel. Tata Steel is not second-rate in the world, it is world class but why are you not able to sell there? Because there is a nationalistic spirit there,” Goyal remarked.

When asked about progress on free trade agreements, Goyal remarked that while no FTA would be signed without discussions with the industry, it would have to be prepared to drop businesses in which they are uncompetitive.

“Do not become petty and say my production should be protected, my raw material should come in free,” he said, noting that if industry was not willing to allow competition in some areas, it should forget about FTAs and be content with the areas in which it is currently competing.

His remarks came a day after the Prime Minister exhorted industry to increase its risk-taking tendencies to boost investment and employment in the country. Various political leaders Saturday questioned Goyal’s criticism of Tata group and the role industry has played in country’s development.

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