India Inc slams K.M. Birla FIR

India Inc has hit out at the Central Bureau of Investigation (CBI) for registering a case against Aditya Birla Group Chairman Kumar Mangalam Birla in the coal scam, saying such action would dampen business sentiment and affect growth.

The Federation of Indian Chambers of Commerce and Industry (FICCI) said such incidents were "unfortunate" and it would dent the national psyche and also dampen investor confidence -- both domestic and foreign.

"There is also a feeling that with repeated episodes of a trust deficit between industry and government, the business sentiment and the investment environment would be vitiated and India could slip further from the growth trajectory that is so necessary for us to maintain," FICCI said.

FICCI president Naina Lal Kidwai said in the statement that highly regarded business leaders like K.M. Birla should not be made scapegoats of mere suspicion and misconstrued actions.

"We also need to bring back a regime of courageous decision making. Decisions made in the interest of progress, when made in a transparent manner with no personal gains and without malafide interest are critical for growth," Kidwai said.

The Central Bureau of Investigation (CBI) earlier this week named Birla and former coal secretary P.C. Parakh in a first information report (FIR) in connection with alleged irregularities in coal block allocations in 2005.

Godrej group chairman Adi Godrej said the development had sent wrong signal to India Inc and would create negative perception about the economy.

"I think it is a bit ridiculous. It will spoil sentiment, perception. Several things have been done which will create negative perception about our economy," Godrej said.

Commerce and Industry Minister Anand Sharma also said that such incidents were negative for the economy.

An atmosphere where ministers or bureaucracy do not sign papers out of fear was a "recipe for disaster", Sharma said, contending that the economic environment has been vitiated over the past three years.

"You cannot hold decision-making to ransom so that nobody takes a decision, everybody is fearful," he said.