'Politicians Should Stay Out'

The full transcript of the BBC Hindi special programme Aapki Baat BBC Ke Saath with the former President of the Confederation of Indian Industry (CII) and well-known businessman Arun Bharat Ram

Nagendar Sharma: Mr Arun Bharat Ram, are the top business houses of India run professionally or are they mired in personal egos of owners’ families?

Arun Bharat Ram: During the last 10-12 years, there have been a change towards professionalism in the top business houses. I am not talking of the small ones, those who have just started or those who are in the first generation. I am talking about those who are in the third or fourth generation of business. These big houses know that if they do not professionalise, they face the threat of losing out -- some of them have even shut down. Therefore, I feel that there is a new wave of awareness amongst the top Indian businesses and this would continue in the positive direction in the days to come. 

Nagendar Sharma: Mr Ram, you have tried to portray a positive picture, but look at the biggest Indian family business empire, the Reliance Industries. The feud between the brothers has not only hit those concerned with the business but the common investor as well -- the stocks tumbled the first day when news of the dispute was out. Where is the professionalism in this?

Arun Bharat Ram: Let me tell you there are many professional organisations where such tussles take place. If you think it only happens in business organisations involving family members, then you are mistaken.

So far as your question about the Reliance Industries is concerned, such differences can appear among family members or brothers who have a different viewpoint. I feel that with this, the way things have come out would help improve the corporate governance in the country. Now the Board members would have to show more responsibility to ensure that the situation does not worsen. I am saying this because what I have been able to understand about these differences, reading about them in newspapers and other media outlets, my view is the differences between the two brothers are on the issue of corporate governance and not on personal issues.

BBC listener from Mathura: The dispute between Mukesh and Anil threatens the future of power plant to be set-up by Reliance Energy in Ghaziabad in our state, which could solve the electricity and employment problems to a large extent. Thus dispute is also affecting the stock markets.

Arun Bharat Ram : What I can say from my experience in the industry is that the Reliance Energy Plant, which would be a gas power plant, and is required by not only the big state of UP, but by the entire country, would certainly be set-up despite all the differences. There should not be a worry on this count.

So far as your query on the stock markets is concerned, I agree such upheavals affect the market, and it is unfortunate that any differences in a family are out in public and are being reported in the media freely. Such things should be sorted out within the family without any outsider knowing anything. I tell you that the property was divided into four within our family also, but nobody came to know anything and it is running smoothly thereafter.

Nagendar Sharma: But Mr Ram, it is being said that Mr Anil Ambani's entry into politics is also one of the reasons for the feud among the brothers. Why do all involved with glamour -- whether film stars, players or industrialists -- want to join politics?

Arun Bharat Ram : Well, I do not wish to join politics (laughs). Anyway you’ve raised a serious question. See, if you are an industrialist, you can make lots of money; if you are a player, you can make money and create a name for yourself, but you do not get power. Therefore it is the attraction for real power, which is attracting glamourous individuals towards politics.

BBC listener from Aurangabad: Sir, some politicians are trying to mediate in the conflict between Ambani brothers. Do you think this would help?

Arun Bharat Ram : Not at all. I am of the firm view that the politicians should stay out of this totally. Both the brothers should take help of their family and friends who could help them out. My appeal to politicians is that they should remain out of this, otherwise the entire matter would take a totally different turn.

Nagendar Sharma: And such names want power without social responsibility. Leading Indian industrialists want to enter Parliament, but do not want reservation in private sector. Why?

Arun Bharat Ram : When we talk about Indian industry, let us understand that there was a time, say five decades back, when we were afraid of global competition etc. Today things have changed. Indian business is capable of competing at the global level. And all professionals hanker after power, not just industrialists.

BBC listener from Sharjah: Sir, why can’t the government controlled organisations like the CII do anything to protect the Indian business interests from media speculation? For example, the Korean steel company POSCO is interested in a steel plant in Orissa, but before anything could happen the media started shouting about corruption etc., and is irresponsibly trying to stop the plant and thereby investment and employment...

Arun Bharat Ram: Let me make it clear first that the CII is not controlled by the government. We are totally independent, and forward our views about the industry frankly and also criticise the government decisions which we consider are not conducive to the industry’s interests.

So far as the media is concerned, our role is confined to see that the news reports appearing are factually correct, but the media is not under our control. We ensure that newspapers, radio stations and TV channels give the correct version of business news, but they are governed by their own rules -- and, remember, we live in a democratic environment, where everybody enjoys freedom.   

I share your concern over POSCO, but talks of Indian representatives with POSCO are on, and I see no reason why POSCO should not go ahead with this project. Small problems should not come in the way.

BBC listener from Delhi: There was a time around the country’s independence when private companies were taken over by the government to be run in public sector, but today the private companies want more and more disinvestment. Is there any other motive apart from profit making?

Arun Bharat Ram : Well, when India became independent, there was a wave in the world that whatever is under private control must be brought under the governmental control -- in a way, the socialist order was the norm of the day. It could not succeed anywhere in the world. However let us return to the present day. Today, the situation is that the biggest burden on the public sector is government interference, and it is not allowing the public sector to perform well. It has good officers and managers, we have seen it many times, but till the time the governmental control and the ministries' interference is there, the public sector would not be able to work independently. It is pulling the efficiency of this sector back. I am not arguing that PSUs should be denationalised or privatised, what I am saying is that the government equity at least should come down below 50 percent.

BBC listener from South Korea: Why is it that the wealth is concentrated in a very few business families in India? Why can’t new players come up? Or do the big fish not allow the small to survive?

Arun Bharat Ram : My view is that no business empire can survive by being static. I had said earlier in the programme that last 10-15 years have seen the Indian business scene change. This is extremely crucial. If you do not expand and go into new areas, if you do not become professional, you are harming the interests of your shareholders as well as your own. I do not agree with the point that there are only a few big families in India which are not allowing others to flourish. Recent years have seen names such as Azim Premji and Naryanmurthy emerge at the global level. They are not only expanding their businesses throughout the world, but are doing a great job in social service also. What the Indian business houses do for social service is not reported, this is a different matter -- but a lot is being done.

I am not claiming that all Indian businessmen are involved in social work, let us remember that if some big businessman is setting up an industrial unit, the primary objective would be profit making, otherwise why should anyone invest and throw money down the drain?  There can be no uniformity in this. However some of the businessmen shout more about social work but do far less. But the bottomline is that the Indian industry is doing its bit.

Nagendar Sharma: But Mr Ram, when we talk of Indian industry at the world level, what is the role of industry in national development as compared to the developed world? Prime Minister Manmohan Singh is stressing on this, but what is your view of development and role of the industry?

Arun Bharat Ram :  When we talk of development and industry, I link it with businessmen like us who are operating from within the country. There was a time when we were dependant on the technical expertise from abroad, and our role was limited. However, as I am stressing things have changed. We now have our own Research and Development. From here, we are generating jobs and giving employment to the youth of the country. That is our contribution.

Software is a field where the world has accepted our supremacy and now manufacturing and automobiles are two of the sectors where the Indian companies are doing really well and even buying companies in countries like Germany and the US! Within the next five-seven years, I would be in a position to spell out many more such sectors.

BBC listener from Jodhpur: Sir, what you are saying is right, but what about the biggest problem being faced by India: unemployment?

Arun Bharat Ram : Let me make it clear the only way for more jobs is more industries. Say five or seven years back, there was a hesitation in having rapid industrialisation, because the first fear was whether our industries could withstand global competition, that is no more there now. Secondly, the tax structure was not friendly. Both the factors have changed now. Therefore we can have more industries for overcoming unemployment -- merely IT sector cannot remove this problem . 

Nagendar Sharma: But Mr Ram, in a country with agrarian economy, why is the industry not concentrating on the primary field of agriculture?

Arun Bharat Ram : On the contrary, I would say the focus is shifting to rural areas. Look at the latest issue of India Today magazine, it is entirely devoted to what the Indian industry is doing in this sphere. Right now the e-commerce is shifting to villages. Companies are investing in villages in the social sector as well -- it is being seen as a huge investment ocean, which is mutually beneficial for both the farmer as well as the company.   

Nagendar Sharma: What do you have to say on the present government’s attitude towards the industry?

Arun Bharat Ram : We have only institutional requests to make to the present government. We are not asking for tax rebates. The tax rates in India are higher, but the industry can manage with it. What India lacks most is proper infrastructure, without which we cannot do anything big.

Let me give you an example: look at the Indian ports. For unloading a ship, it takes four-five days in India, whereas in Dubai it takes four hours and in Singapore it takes two hours. Similarly look at the condition of airports, all of us shout that increase the number of international flights and their destinations within the country, but before that look at the sorry state of our airports, so the only demand or request we have from the government is Infrastructure development.

Nagendar Sharma: Mr Ram, the Manmohan-Chidambram team is considered good for the industry, but the government is dependant on Left Parties for survival, do you have real hopes from the present regime?

Arun Bharat Ram : Well, the world knows it and the Left parties know it too, that the economic reforms initiated by Dr Manmohan Singh a decade with the able support of P Chidambram, have done a lot of good for the country. Our appeal to this team, this government,  is that they should not be cowed down by political compulsions. They should continue the good work. The reality is that the only way forward for India is economic reforms, and only they would ensure employment and development.