Driving the private sector
In 2010, R C Bhargava wrote his memoirs presenting the fascinating story of how he led Maruti Udyog (now Maruti Suzuki) and made it India’s shining example of a successful manufacturing company that, even after about four decades, remains the market leader. That book ( The Maruti Story: How A Public Sector Company Put India On Wheels ) was rich with information and perspective on how Maruti Suzuki revolutionised India’s automobile market. Read along with V Krishnamurthy’s At The Helm: A Memoir and Jagdish Khattar’s Driven: Memoirs Of A Civil Servant Turned Entrepreneur, Mr Bhargava’s memoir completed a 360degree appraisal of how the celebrated company was born and made history.
Almost a decade later, Mr Bhargava has authored another book that attempts to present his thoughts on the need for building a competitive manufacturing sector in India and how this can be done. But this is not written like other books by management gurus, though the title ( Getting Competitive: A Practitioner’s Guide for India) may suggest that. There are, therefore, no to-do or to-avoid lists. Nor are there any case studies. Except one — predictably called Other Important Requirements — the remaining 12 chapters are devoted to expanding many of Mr Bhargava’s pet ideas on how to make manufacturing succeed in India. There are, of course, no surprises in the requirements he outlines. The list includes rudimentary recommendations including the need for strengthening the legal framework, underlining the importance of longterm thinking, working as a team, focusing on implementation and ensuring cleanliness and discipline in the company as well as on the shop floor. You cannot quarrel with any one of these requirements, but may be left wondering if something more could be expected from one of India’s most successful managers of a manufacturing company.
His vast experience as a civil servant and as Maruti CEO underpins his realisation that the challenges of achieving manufacturing competitiveness are complex because India has a federal governance structure. More than the Centre, the state governments have a much larger role to play in respect of policies to encourage manufacturing and industrial activity. Politicians and bureaucrats must understand the nuances of competitive manufacturing that could create a wealth effect for the people. They must become facilitators of private-sector industrial growth, instead of being controllers — a mindset that creates a climate of distrust. Unfortunately, Mr Bhargava notes, this is a mistake that has neither been fully recognised nor corrected.
It is remarkable that the writer, who spent more than two decades as an Indian Administrative Service officer and worked in two public sector undertakings (including Maruti Udyog), does not mince his words in advocating the crucial role the private sector and its industrialists will have to play in improving industrial competitiveness and growth, which in turn should reduce poverty and deprivation. Policymakers, including the political leadership and bureaucracy, must work towards creating an environment that encourages them.
Mr Bhargava picks many holes in the way different governments have followed a halfhearted approach to the need for allowing the ownership of public sector enterprises to be passed on to private hands to achieve greater competitiveness, efficiency and wealth creation. He finds the idea of reforming a public sector undertaking and making it competitive and a wealth-creator almost an impossibility. Even more improbable is the idea of bringing about legal changes to give state-owned enterprises in a country like India more autonomy. There is, therefore, no alternative to selling public sector undertakings and using the resources from such transactions to accelerate private sector manufacturing and competitiveness.
Nehru’s industrial policies were a big handicap, Mr Bhargava notes, and the economic reforms of 1991 made some progress, but failed to usher in the spirit of competitiveness in manufacturing. The United Progressive Alliance government did come out with a manufacturing policy but beyond making the right noises in 2011, it did not follow this through. The Narendra Modi government, therefore, has an opportunity to correct those mistakes by focusing on policies that enhance manufacturing competitiveness.
One of the most readable chapters is on human resources, where Mr Bhargava recounts how he managed workers in Maruti and how the work culture was changed to build a relationship of trust between workers and the management. There are many lessons in management in this section that several of India’s famous private sector giants could adopt in their manufacturing units.
The broader message that comes through loud and clear from Mr Bhargava is that the Japanese way of working and living is most suited to India’s political, economic and social environment. Industrial management, therefore, should look east and adopt the Japanese way of forging partnerships with workers and other stakeholders. This would be an extremely difficult idea to implement in India of today, which has moved towards ostentatious consumption. But for Mr Bhargava the prescription for a better future is rapid, competitive industrialisation, generation of jobs for the youth and the creation of a just and equitable society. That may well appear utopian at present. But that is a dream that Mr Bhargava wants India to realise.