In a wide ranging speech while delivering the 13th Nani Palkhiwala Memorial Lecture, on “Strengthening Free Enterprise”, RBI governor Raghuram Rajan called for a level playing field in application of laws between big industries and small companies, an exit policy and a bankruptcy law, a safety net that includes unemployment insurance, health care and old age pension, and an environment that creates opportunities for new entrepreneurs.
With the Budget fast approaching, it was appropriate that Dr Rajan focused on some of these imperatives for growth for all. Hopefully the government will incorporate these without much cost.
He also did well to remind Indian businesses to work towards improving the business environment rather than asking for more special exemptions. This was something he noticed from his experience both in North Block and the RBI, but things are changing and business associations have begun to work towards a better business environment and social responsibility.
For the first time he chided multinational corporations who across the world think it’s okay to evade and avoid taxes through various processes and said there is a need for a global agreement on what is reasonable taxation and what is reasonable behaviour for MNCs.
Even the US, where a leader once said the business of America is business, has made a law to deter such activity by MNCs. Dr Rajan also noted wryly that some corporations find that all their intellectual properties are manufactured in the Cayman Islands though he had not noticed many scientists there.
