Entrepreneurs sail through changing tides
The story of 70 years of business, coinciding with independent India, isabouttwoworlds distinct ly different from each other. Business historians and economists prefer to label the first 45 years as an era of just managing the system. They see 1991, the year that opened the flood gates of economic reforms, asastartingpoint, makingIndian businesses look rather young. And if Indian businesses versus multi nationals was the norm earlier, now foreign investor-funded de si entrepreneurs are leading the way in many ways (the $2.6- billion fund in fusion by Soft Bank into Flip kart being the latest example ).
Today Indian business has moved considerably on accommodating diversity, climate change and others, but on distancing itself from government handouts, the jury is still out.
In the recently published India Transformed—25YearsofEconomic
Reforms, edited by Rakes hM oh an, economist O mk ar Go swami writes that trying to remember the world of 1991 is like seeing“dim image sofa quarter century ago that briefly appear in one’ s memory, over laid by myriad changes that have occurred since .” He goes onto explain with examples of hard-to-get telephone connections to eternal wait for cooking gas cylinders. In contrast, reforms since 1991 have created“a large and economically powerful corporate sector that in most parts takes its growth and investment decisions independent of the state .”
Elaborating on the transition of industry, GurcharanDas, author and former chief executive officer of Pro ct er& Gamble, tells
Business Standard it“was sort of a dark age for businessesbefore1991…” Indiahaschanged profound ly over the last quarter, but reforms have not been marketed as well as they should havebeen. Dasnamestelecom, information technology, pharmaceuticals and automobiles as the best success stories of the times. However, he also tells businesses not to ignore the emergence of a new voice of the civil society.
In a conversation with this newspaper, Go swami, chairperson of Corporate and Economic Research Group Advisory, says, “There can be just no comparison of the business landscape from what prevailed in the middle of the 20 th century and now. Where would one find abusinesslike, say, LupinorSunPharma?’’ There are some segments, typically the largest enterprises, which still depend on the government. But just below that rung, there has been a massive change in the business environment—it has matured and huge ly diversified, headds.
However, there’ s talk of are think of the reform programme already. Business historian Git aP ira mal points at a“strong out flow of business talent from India ”.“My dip stick estimates suggest that most of these are with professional qualifications and these are in significant numbers. They are also the next generation from business families. So my concern is that they are also the younger lot; consequently, the impact on India is far more intense and these are in response to the business climate .” This merits are think of India’ s reforms programme, according to Pi ram al.
Analysts agree that every phase brings a new set of challenges. From the days of the Rahul Baja j-led Bombay Club opposing liberal is at ion to the call for animal spirit among corporate sin recent times, change has been the biggest constant.
According to S hob an aK a mine ni, president of business chamber C II, Indian industry has proved itself to be resilient and adapt able .“It is not just the domestic policy environment that has been changing over the last 70 years, but also the global environment and technology advances .” Companies are constantly aligning with new modalities, st rategi sing to leverage the opportunities and mini mis et he risks. She adds that of late, businesses have been encouraged by the proactive and accelerated reforms agenda which promises to set a strong foundation for the future and make India one of the most vibrant economies.
Not everyone is that optimistic. Veteran B JP leader and former finance minister Y ash want Sin ha argues ,“Indian business rarely complains. They have their demands but rarely do they bring those up in the form of complaints. Itistruenow, it was true earlier too .” However, Sin ha gives them credit for being able to adjust even as they seek help from the government. “This learning is a result of opening up of the Indianeconomy.”
Sin hare call show in April 1,2001, as India opened its border son several fronts, there were delegations of scared business men who came to him, then finance minister, for help .“The two wheeler industry, for instance, was sure that there would bean avalanche of imports, but it turned out to be a false scare .”
On whether businesses have matured, Sin ha says ,“They have learnt that governments will not support them if anyone goes down, but they can count on support if an industry is on the verge of crisis and there, too, the support would come through state-owned enterprises. In my term, we bailed out Steel Authority of India Limited .” Describing a road map for businesses from this point, As ho kC haw la, former finance secretary and now chairman of the National Stock Exchange, says the change will be exponential in 10 to 15 years. Consolidation with technology will cause massive disruption, according to Chaw la. “In the next 15 years, we can expect many more changes than the last 70 years .”
The game has just begun and it will bea ruth less road, industry observers say.
But, predictions don’ t come easy. In the introduction to her book, Business Legends, Pi ram al quotes industrialist Ram a Pr a sad Go enkaf roma panel discussion of 1996.“Even to look 10 years ahead, we need a person with a dre amanda vision. In the last three decades, India has had three dreamers in the corporate world: JRDTata, G DB ir la and D hi rub hai Ambani….inmyeyes, therehavebeenno otherdreamers.”