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Tuesday, Oct 26, 2021
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League Of Extraordinary Gentlemen

The last decade has seen a great entrepreneurial churn and the number of new businesses striding to the top is more than those that fell by the wayside

League Of Extraordinary Gentlemen
Jayanta Goswami
League Of Extraordinary Gentlemen
outlookindia.com
-0001-11-30T00:00:00+05:53
For a nation whose mythology has much to do with samudra manthan, the corporate world remained immune to any churn till the late '80s. There was no need for any shake-up. Domestic competition was a no-no thanks to industrial licensing. The Monopolies and Restrictive Trade Practices Act forced conglomerates to diversify into unrelated activities and, having done so, were then protected by an average tariff rate in excess of 85 per cent and quantitative restrictions on imports. The raison d'etre of IFCI, IDBI and ICICI was to give bundles of cash to industry often without any real hope of return; and concepts such as quality, service, delivery were of little importance. It was a world where competition was fought in the corridors of Udyog Bhavan, not the market; a world where profits had everything to do with supply scarcities, not efficiency; a world where even the slightest whiff of reforms was snuffed out by the babus with a devastating phrase, "But in a country like India..."

This world changed—initially during the first three years of reforms, then with more severity in the second half of the '90s. In fact, the first few years of reforms were applauded by the captains of industry. They were now enjoying the benefits of unshackled internal controls with sufficiently high enough rates of tariff protection. Indeed, it was during the euphoria of 1992-94 that one saw entrepreneurs of every shade merrily going to the capital market and coming back with oodles of money for funding many gold-plated expansion schemes.

The real transformation started after 1995, and was triggered by four factors. First, India began to see a host of relatively younger entrepreneurs who, unencumbered by protectionist baggage, were determined to prove their worth in a more competitive...

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