12 june 2012
As an Indian, I feel very sad about state of economy: Narayana Murthy
N R Narayana Murthy, chairman emeritus of Infosys, India’s second largest software services firm, is concerned about the setback to India’s image over the past three to four months. “As an Indian, I feel sad we have come to this state,” he told Morgan Stanley, a global bank, according to a research report dated 11 June 2012.
The bank sent this report to its clients on Monday.
Murthy criticized retrospective imposition of taxes and said that a high growth trajectory is not possible without the participation of foreign investors. They need to see India as a proactive, investor-friendly and stable governance model.
“This is where the government should not send the kind of signals that that it has recently sent by introducing tax laws on a retrospective basis. It does not matter what the intentions are. Nobody can understand intentions; people can only read the laws and then act,” the report quoted Murthy.
Murthy is confident about India’s growth prospects though. He does not think that 2012 is as bad aas 1991 but is concerned about rising imports. He feels that the Indian economy would continue to grow at 6 per cent per annum without much effort.
“Even if the government continues to be a spectator rather than a driver, I think we can get 6% (GDP growth). If the government becomes a driver – becomes an active participant in the growth of the economy – then 8% growth is achievable,” he said and the report quoted.
On Infosys, he said that the story of the company has been the story of its leaders who have led by example from the front.
“We realized that if we want junior people in the company to follow the values or do whatever is necessary in terms of customer satisfaction, in terms of investor transparency, in terms of focus on society, the company’s leaders would have to come to the fore,” he was quoted in the Morgan Stanley report.
When asked about his advice to young entrepreneurs, he said that they should be able to express the differentiated value proposition of their idea to the market in a simple sentence. Secondly, they must make sure that the market is ready for their idea. Thirdly, because, entrepreneurship is about deferred gratification – hard work today and, hopefully, success tomorrow – they need to have a good value system. Lastly, they must bring together a team that has mutually exclusive and collectively exhaustive set of skills, expertise and experience.