India Inc must get its act together

The stock market continued its rally last week, once again disproving those who believed that come October 1 when long-term (over one year) capital gains would become fully exempt from tax, would see a flood of selling.
The BSE Sensex went up 101 points last week to end at 5,776. At these prices the rally is liquidity-driven, and is unmindful of global forces that threaten equity markets, viz.rising oil prices (which touched $53/barrel), rising interest rates and global terrorism.
An overdue correction ought to take place in the coming week.
Tax treatment for investing in equity is very favourable, and rightly so. Short-term (under one year) gains are taxed at a lowly 10 per cent and holdings over that are exempt.
This, together with the lack of alternative avenues for investing, are giving the liquidity edge to equity markets.
Interest on bank deposits, traditionally the favoured mode of investing, is too low; in fact it is lower than inflation which is over 7 per cent.
No wonder incremental growth in bank deposits up to September 17 has been Rs 81,200 crore as compared to Rs 94,800 cr during the corresponding period last year. Should the trend continue, banks would have to hike interest rates for deposits.
India Inc still doesn''t pull as a team. Left supports the government from outside, which is rather like an option. They have the right, but not the obligation, to support or protest government actions.
They oppose foreign direct investment if announced by the central government, whilst welcoming it in their own state, West Bengal.
They oppose any move towards labour discipline at the Centre but have passed instructions, as per an article in The Statesman, to the workers in their own state to behave.
There is a controversy going on over a government move to introduce job reservations, with industry saying jobs must be on merit.
In truth, this is because there is a scarcity of jobs; if there were enough to go around,there would be no need for such a controversy.
The reason is because, again, India Inc doesnt act as a team! Left says it will oppose foreign investment in telecom and airlines.
Telecom sector shows growth, and teledensity is up to 6 per cent. This shows there is still plenty of room for growth, which, of course, will need investment. Given the size of investment, naturally foreign investment is needed.
So if you restrict that, for an ideology that has lost its relevance even in China, which has seen the largest job creation and welcomes (and gets) $50 billion in FDI a year, then, there are fewer jobs to go around.