License to Grill

As chief ministers queue to woo heads of transnational empires and NRI kings play noblesse oblige with governments, the License Raj equation has been turned on its head. SONIA TRIKHA reports on the new found clout of the Industrialist

India in the 21st century has spawned a new animal. Former US President Franklin Delano Roosevelt had called him the ‘‘economic royalist, the privileged prince of new economic dynasties’’. He is the uncrowned dauphin who reigns over the elected chieftains of the States and the Centre. He is the new in-your-face version of the old in-the-queue industrialist. When liberalisation came in nearly a decade ago, everyone thought it was about policy. Suddenly, it’s about personality. Liberalism is a word that more effectively describes what industrialists are now able to say to the elected relics of the Licence Raj.

Rahul Bajaj’s performance at the recently-concluded International Rajasthani Conclave 2000 in Jaipur is a showpiece of the changing might of the Industrialist. Bajaj, never a tame spokesman of his ilk, is now bolder than before. At the conclave he was joined by others who also spoke his language. If it was Bajaj telling the bureaucrats and politicians that what industry needed was conducive business environment in a State and not monetary and other incentives, it was international steel magnate and non-resident Indian L. N. Mittal of the Ispat group who said that the primary reason why many businessmen don’t do business in India is that they have to come and pay obeisance to politicians and bureaucrats even before they have identified a piece of land on which they want to build a factory.

Mittal, who is counted among the richest men in the world, expressed his shock at the fact that nobody had taken business seriously. He spread greater shock, however, by speaking his mind on the issue. He said that so far only emotions had been whipped up and the politicians had a big role to play in it. ‘‘I have heard a lot of politicians playing with our emotions. But what Rajasthan is boasting of having done in 50 years, the others have done in 10. The people here need to change their mindsets to make things happen.’’ By that he does not mean the famine-stricken populace.
Mittal added that he had put up steel plants all over the world but while doing so he never had to meet the Prime Ministers and Presidents of those countries. ‘‘We only see the environment, rules and regulations while taking investment decisions. But in India, things are different as the businessman has to first know the politicians before setting up industry,’’ he added. For obvious reasons, he does not mean that as a compliment.

Taking over from Mittal, Bajaj added: ‘‘Don’t beg us to come. Create an environment where we beg you to allow us to come and set up industry.’’ The premise being that some begging is definitely going on.

The Brave New Behaviour however temperamental it may sound is not a sudden vent of spleen. It is the result of an industrial shift which is changing the face of the Indian economy and even influences its leaders.

After years of subjugation under the license-quota Raj, the Old Economy leaders have turned a New leaf. According to FICCI Secretary General Amit Mitra this is a result of traditional brick and mortar companies breaking into new technologies. S. Kumar, a textile company, is now in a joint venture with Hughes Network. Their main big project is to link 18,000 villages through VSat. Thus, when the private sector moves into what were traditional government works, the industrialists feel confident in speaking their mind. After all, they are taking over development initiatives and that gives them a speaking platform on moral high ground.

The other area of power shift is through what is known as ‘greenfielding’. This is led by the tech leaders Wipro and Infosys. When professionals like Azim Premji and Narayan Murthy joined the industry in the post-reform era they created a New Order and new business has a New Language and it is called Plainspeak.
Those surviving from the old order such as K. K. Modi have made their peace with the new world by moving over from traditional Godfrey Philips business models to Modi Entertainment. In the relatively unregulated world of satellite television, the language of arrogance is not unwelcome.

So it is not a surprise that Essar group Chairman Shashi Ruia too did not mince words in Jaipur, when he said that while Rajasthanis have created enormous wealth all over India and the world, the State has itself lost the race in the industrial revolution. ‘‘Incentives will not bring industry anywhere. Proper infrastructure and attitude of the Government will,’’ he said. That is the new boldspeak of the old.

Lord Raj Bagri from England said the State may have achieved a lot but it still has a long way to go. ‘‘The Government has a long way to go, specially in infrastructure and technology. The Government has to change its work ethics and attitude to attract investment and take the State forward. It also needs an educated workforce,’’ he said. Not so long ago, you will recall, it was the Government who told the industry how they must run. Bajaj is clear that he’s not taking orders anymore. ‘‘After one meeting nothing can happen, companies don’t change like that. I had 20 people telling me 20 different things. It is not I but the Government of Rajasthan which has to decide what it has to do,’’ said the Bajaj Auto chief.

There were many more who did the talking, and among those who were doing the listening to what you may not call polite party conversation, were Chief Minister Ashok Gehlot, Governor Anshuman Singh and their clutch of bureaucrats. It was probably the novelty of the experience that has resulted in the ensuing silence from their quarters.
When Gehlot tried to redeem his situation by showing an interview with NASSCOM President Dewang Mehta, to prove that their State has the best Information Technology Policy, he was again struck into silence by Hindustan Motors Chairman C. K. Birla. He said, IT can happen only if the State has educated people who can be employed in the sector. ‘‘Only IT policy and incentives will not do. I have been planning to set up an IT company in Rajasthan but I need engineers and qualified people in the State,’’ he said. There was a time when most business people would have been flattered by merely the government’s interest in their well-being.

For the ministers, there’s also a flipside to this quiet. The total lack of rebuttal also indicates that nothing will come in the way of the New Indian Minister’s wooing of investment.

According to Mitra, ‘‘wooing is part of the recipe, as the Government distances itself from controls on industry, it will be forced to woo even more.’’ His view is that with reforms the change in personal behaviour was inevitable. ‘‘Earlier, they could not have spoken their mind because the industrialists were at the mercy of the Government,’’ said Mitra.

Some things haven’t changed though. After 1991, everyone believed economic reforms meant the License Raj had gone forever and so had the lines of businessmen outside the offices of bureaucrats and ministers waiting for a darshan of the mantriji. Now it would seem the lines are still there, and they are almost as long.
It is who makes them up that has changed. Queue to woo is the ministers’ mantra now.
The Bill Gates visit, a well-documented affair, had 10 chief ministers travelling from all over the country to meet the richest man in the world. The Minister for Information Technology travelled back from the United States to meet with the man who actually lives in Seattle for the most part.

As the chief ministers came with their own version of IT in India — education in Madhya Pradesh and Rajasthan, R&D in Andhra Pradesh and so on — Gates smugly summed up the sentiment: ‘‘The atmosphere of competition between the States on IT is a healthy thing.’’ The new version of the License Raj is now limited to license to patronise.

Since his meeting with Gates, Karnataka Chief Minister S. M. Krishna has met GE chief Jack Welch, Sculley Brothers’ John Sculley and Dell Computer’s Michael Dell. Welch’s sentiment on the country was marked by the words: ‘‘India is dangerously close to starving itself of energy.’’ The Candid CEO was showing the self-confidence that business bosses are able to only now betray in India, as Krishna listened in.

Krishna is also leading the charge in another first in the role reversal between industrialists and ministers. It was well-known that businessmen came bearing gifts for those who controlled their commercial destiny. Now they have been replaced by the likes of Krishna giving a sandalwood Buddha to Gates — betraying no sensitivity for the Veerappan crisis. He was followed by IT Minister Pramod Mahajan giving a bejewelled elephant to the Chief Software Architect. Nothing subtle about it.
But none of this gift diplomacy is keeping the previously pliable business bosses in good humour. In fact it seems to be completely failing in its purpose. Gates contributed only $50 million over three years to the Indian economy. As for Bajaj, he is still giving the Government his response to Gehlot’s plea to industrialists to ‘‘come forth and help Rajasthan progress.’’ Bajaj’s response: ‘‘Nobody forced the conclave on them, it was their idea. Now, with time, their actions must show that they are willing to change labour policy and bring in the infrastructure,
also a change in the way our managers are received. The License Raj may have gone but it has been replaced by Inspector Raj.’’

In the words of Gehlot, the Government was looking for ‘‘open discussion.’’ They probably haven’t heard of the saying, ‘‘don’t ask for something, you just might get it’’.

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