Businessman Ajay Piramal blamed frequent raids, searches and lookout notices issued by various government agencies on corporates for creating "mistrust" in the business community.
His comments come at a time when other business leaders, including Larsen & Toubro Ltd.'s AM Naik have voiced similar concerns. It also comes at a time when regulators and enforcement agencies are busy trying to stop corporate leaders like Jet Airways founder Naresh Goyal from flying abroad and raiding Videocon group's founder Venugopal Dhoot's premises.
There is mistrust between the people who are in power and the people who are wealth-creators.Ajay Piramal, Chairman, Piramal Group
"Why do we need to criminalise everything? With so much of information and data available, do you need to have searches and raids? Do you need to issue lookout notices? It does not give a positive feeling to any businessman,” he added.
"What is critical is that wealth-creators get the respect they deserve," said Piramal.
Availability of capital is also a challenge, said Piramal, without naming any company facing a liquidity squeeze.
He said the high-interest rate regime is another challenge, as it makes exports uncompetitive, and pointed out that domestic businesses pay up to 14 percent interest on borrowing as against 2-3 percent in developed markets. The high-interest rate is also impacting investments and consumption, he said.
It can be noted that slowdown in consumption which is seen in sliding consumer goods and auto sales, along with a slowdown in new investments are being blamed for growth sliding to a six- year-low in the June quarter.
The government has taken a slew of measures to boost growth, the biggest of which was the massive cut in corporate tax to global levels and also giving a lower 15 percent tax on new manufacturing investments.
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