Retro tax to AGR, telecom cash grab imperils foreign investment into India

For Kumar Mangalam Birla’s textile-to-telecom empire, adversity is a 100-year-old companion. In 1919, when the Indian businessman’s great-grandfather wanted to start a jute mill, the dominant British firm, Andrew Yule & Co., bought all the surrounding Calcutta land. The Imperial Bank, the forerunner of today’s State Bank of India, initially refused Birla a loan.

The government of post-independence India stymied the Birla conglomerate with kindness. Soviet-style planning and state socialism protected the family’s legacy licensed firms by keeping competition out. But they inhibited growth. Birla’s father, Aditya Vikram, went to Thailand, Indonesia and the Philippines because he wasn’t allowed to expand at home. “I for one fail to see where the concentration of economic power is: with the big business houses or with the government?” he wondered in 1979.