MUMBAI: The passage of the Black Money bill may result in an exodus of several Indian businessmen heading medium and small industries to countries with easier taxation laws. In addition, a significant proportion of white collar professionals working in India for MNCs are contemplating leaving the country, a report by Ambit Capital said.

The report, published on the completion of one year of the Narendra Modi government, praised several of the policy decisions taken by him. But it also pointed out that some industry leaders are intentionally holding back capital expenditure and expansions in their respective sectors, expecting it to create an economic slowdown which they believe will force the government to stop attacking crony capitalists.

The report said that the Modi government was pressurizing crony capitalists and contractors into re-thinking their traditional approach to rigging the system. “Remarkably for an Indian politician, Modi is explicitly naming in his press interviews promoters who he thinks have distorted the system in the past,” the report said.

The report also added that although the Modi government is trying to put in place a cleaner system for stronger economic growth, along with the opposition from crony capitalists and SME promoters leaving the country, shortage of enough number of efficient civil servants will also hold back growth. Ambit analysts believe that the PM is prioritizing a clean-up of the system over pursuit of near-term GDP growth.