MNCs are not looting India, so don’t demonise them
Right from the invocation of the start of the swadeshi movement in 1906, to the burning of foreign goods—“swadeshi apnao, videshi jalao”—and the use of the East India Company’s purported symbol, Patanjali Ayurved’s latest television advertisement is very evocative. MNCs, Baba Ramdev tells us, are just as dangerous as the East India Company was since they are taking India’s wealth overseas. Patanjali’s print campaign explains this in detail when it says “the way East India Company enslaved and looted us, Multi National Companies are still doing the same by selling Soap, Shampoo … at exorbitant price. Thousands of crores of profit thus generated is ploughed back to their own countries”. Indeed, by saying, that MNCs don’t even do any work of charity in the country, Ramdev is making profit a bad work. As with all advertisements, there is more than an element of hyperbole, but this needs to be taken more seriously given Baba Ramdev’s following within the country. When Global Financial Integrity estimated the undeclared overseas wealth of Indians at $462 billion, Baba Ramdev came up with his own number of $8.8 trillion—it was hype like this that contributed to the government making getting back overseas black money a big election plank.
A simple look at RBI data bears out Ramdev’s contention. In FY14, $4,040 million was repatriated—$3,728 million by way of dividends and $362 million by way of profits—and while this fell to $3,679 million in FY15, it rose again to $4,299 million in FY16. While sending out over R25,000 crore by way of dividends sounds a lot like what the East India Company did, it is important to keep in mind several things—repatriation of interest payments on NRI deposits, by the way, rose from $4,784 million in FY14 to $5,901 million in FY16. For one, making profits is allowed by the law—apart from following the law of the land, forget MNCs, even local companies have to be judged by the taxes they pay the government, not the charity work they do. Two, repatriation of profits is legal—if the government wants, it can simply say it is not allowed. The problem with banning repatriation of profits, however, is that no MNC will invest if it is not allowed to repatriate profits, and that means millions of jobs created and billions given by way of tax payments by these MNCs will also disappear. While MNCs took out the $4,299 million that Baba Ramdev is worried about, the same RBI data shows us that MNCs reinvested $10,413 million of their earnings in their India operations—this rose from $8,978 million in FY14. Apart from this, the FDI data shows us, MNCs and others also brought in another $41,042 million into the country in FY16, dramatically up from $25,274 million in FY14. In 2016, India is dramatically different from what it was in 1906, and far from looting the country, MNCs are a big contributor to its well-being today; indeed, with such a large share of global trade today taking place between arms of various MNCs, getting MNCs to invest in India is one of the surest way to secure the country’s exports future as well.