Why investors are wary of India

Even as the world watches Greece, the UPA-II has managed to script its own Greek tragedy at home.

In its three years at the helm, the government and its other arms have alienated companies and investors in sector after sector with its decisions - or, equally, its indecision.

TAX RULES

Vodafone, Similar Deals

Retrospective change in rules to tax deals between two foreign entities for an Indian asset. Rs 20,400 cr is the claim on Vodafone and could set a precedent.

Anti-Avoidance Rules

Although GAAR, which aims to check tax evasion by foreign investors, has been deferred by a year uncertainty remains.

Software Products

Budget proposes to treat 'income' from sale of packaged software as 'royalty', with effect from 1976. MNCs such as Adobe, Microsoft, Oracle and SAP, which pay tax elsewhere, would pay 10-20% in India.

OIL & GAS

Deal Delay

Vedanta waits 17 months for government nod to buy Cairn and also accepts a heavy royalty burden.

RIL Penalty

The govt tells RIL it can't claim $1.23 billion of its development cost in the K-G basin as it has not met output commitments.

Reforms

Oil subsidies remain misdirected and a strain on the country's finances.



TELECOM

Licence Cancellation

SC cancels 122 mobile permits issued by former telecom minister A Raja. Norway's Telenor, Russia's Sistema, UAE's Etisalat and Bahrain's Batelco write off $3 billion. Etisalat & Batelco exit, Telenor & Sistema threaten to exit India.TRAI proposals on spectrum auction have irked old and new players alike.

POWER

Coal Crunch

Even as power plants gasp for coal, PSU monopoly Coal India is acting like one - its production is stagnant at 431-435 million tonnes in the last 3 years.

PHARMA

Buyouts

M&As delayed as government stops automatic approval for acquisitions by foreign companies and new rules yet to be finalised.

Patents

India's first 'compulsory licence', for Bayer's cancer drug Nexavar, overrules a patent-holder's rights in lifesaving drugs.

BANKING & FINANCIAL

FDI in insurance

Not raised from 26% in spite of being talked about for a decade.

New Banks

Promised by UPA-I in 2004, none issued as yet.