'Politicians Should Stay Out'

The former CII President on the Ambani feud, corporate governance, business families, professionalism, reforms and what he expects from the current government.

'Politicians Should Stay Out'
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The full transcript of the BBC Hindi special programme Aapki BaatBBC 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 thetop business houses of India run professionally or are they mired in personalegos of owners’ families?

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Arun BharatRam: During the last 10-12 years, there have been a change towardsprofessionalism in the top business houses. I am not talking of the smallones, those who have just started or those who are in the first generation. I amtalking about those who are in the third or fourth generation of business. Thesebig houses know that if they do not professionalise, they face the threat oflosing out -- some of them have even shut down. Therefore, I feel that there is anew wave of awareness amongst the top Indian businesses and this would continuein the positive direction in the days to come. 

Nagendar Sharma: MrRam, you have tried to portray a positive picture, but look at the biggestIndian family business empire, the Reliance Industries. The feud between thebrothers has not only hit those concerned with the business but the commoninvestor as well -- the stocks tumbled the first day when news of the dispute wasout. Where is the professionalism in this?

Arun BharatRam: Let me tell you there are many professional organisations where suchtussles take place. If you think it only happens in business organisationsinvolving family members, then you are mistaken.

So far asyour question about the Reliance Industries is concerned, such differences canappear among family members or brothers who have a different viewpoint. I feelthat with this, the way things have come out would help improve the corporategovernance in the country. Now the Board members would have to show moreresponsibility to ensure that the situation does not worsen. I amsaying this because what I have been able to understand about these differences,reading about them in newspapers and other media outlets, my view is thedifferences between the two brothers are on the issue of corporategovernance and not on personal issues.

BBC listenerfrom Mathura: The dispute between Mukesh and Anil threatens the future of powerplant to be set-up by Reliance Energy in Ghaziabad in our state, which couldsolve the electricity and employment problems to a large extent. Thusdispute is also affecting the stock markets.

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

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

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

Arun BharatRam : Well, Ido 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 youare a player, you can make money and create a name for yourself, but you do notget power. Therefore itis the attraction for real power, which is attracting glamourous individuals towardspolitics.

BBC listenerfrom Aurangabad: Sir, some politicians are trying to mediate in the conflictbetween Ambani brothers. Do you think this would help?

Arun BharatRam : Not atall. 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 helpthem out. My appeal to politicians is that they should remain out of this, otherwisethe entire matter would take a totally different turn.

Nagendar Sharma: Andsuch names want power without social responsibility. Leading Indianindustrialists want to enter Parliament, but do not want reservation in privatesector. Why?

Arun BharatRam : When we talk about Indian industry, let us understand that there was a time, sayfive decades back, when we were afraid of global competition etc. Today things havechanged. Indian businessis capable of competing at the global level. And all professionals hanker afterpower, not just industrialists.

BBC listenerfrom Sharjah: Sir, why can’t the government controlled organisations like the CIIdo anything to protect the Indian business interests from media speculation? Forexample, the Korean steel company POSCO is interested in a steelplant in Orissa, but before anything could happen the media started shoutingabout corruption etc., and is irresponsibly trying to stop the plant and therebyinvestment and employment...

Arun BharatRam: 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 franklyand also criticise the government decisions which we consider are not conduciveto the industry’s interests.

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

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

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

Arun BharatRam : Well, when India became independent, there was a wave in the world that whateveris under private control must be brought under the governmental control -- in away, the socialist order was the norm of the day. It could not succeed anywherein the world. However let us return to the present day. Today, the situation isthat the biggest burden on the public sector is government interference, and it isnot allowing the public sector to perform well. It has good officers andmanagers, we have seen it many times, but till the time the governmental controland the ministries' interference is there, the public sector would not beable 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 amsaying is that the government equity at least should come down below 50 percent.

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

Arun BharatRam : My view is that no business empire can survive by being static. I had saidearlier in the programme that last 10-15 years have seen the Indian businessscene change. This is extremely crucial. If you do not expand and go into newareas, if you do not become professional, you are harming the interests of yourshareholders as well as your own. I do not agree with the point that there areonly 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 theglobal level. They are not only expanding their businesses throughout the world, butare doing a great job in social service also. What the Indian business houses dofor social service is not reported, this is a different matter -- but a lot isbeing done.

I am notclaiming that all Indian businessmen are involved in social work, let usremember that if some big businessman is setting up an industrial unit, theprimary objective would be profit making, otherwise why should anyone invest andthrow money down the drain?  There can be no uniformity in this. Howeversome 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: ButMr Ram, when we talk of Indian industry at the world level, what is the role ofindustry in national development as compared to the developed world? PrimeMinister Manmohan Singh is stressing on this, but what is your view of developmentand role of the industry?

Arun BharatRam :  When we talk of development and industry, I link it with businessmen like uswho are operating from within the country. There was a time when we weredependant 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 andDevelopment. From here, we are generating jobs and giving employment to the youthof the country. That is our contribution.

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

BBC listenerfrom Jodhpur: Sir, what you are saying is right, but what about the biggestproblem being faced by India: unemployment?

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

Nagendar Sharma: ButMr Ram, in a country with agrarian economy, why is the industry notconcentrating on the primary field of agriculture?

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

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

Arun BharatRam : Wehave only institutional requests to make to the present government. We are notasking for tax rebates. The tax rates in India are higher, but the industry canmanage 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 daysin India, whereas in Dubai it takes four hours and in Singapore it takes twohours. Similarly look at the condition of airports, all of us shout thatincrease the number of international flights and their destinations within thecountry, but before that look at the sorry state of our airports, so the onlydemand or request we have from the government is Infrastructure development.

Nagendar Sharma: MrRam, the Manmohan-Chidambram team is considered good for the industry, but thegovernment is dependant on Left Parties for survival, do you have real hopesfrom the present regime?

Arun BharatRam : Well,the world knows it and the Left parties know it too, that the economic reformsinitiated 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 shouldcontinue the good work. The reality is that the only way forward for Indiais economic reforms, and only they would ensure employment and development.

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