Recasting India (27 page)

So was Gandhi a capitalist? Not quite. Was he, then, a socialist in the sense of seeking to remove private capital and ownership of the means of production? No. In fact, Gandhi wrote categorically,

From this came his definitive economic theory of trusteeship. Gandhi wrote,

There is a temptation to dismiss Gandhi as a Luddite when he talks (elsewhere) about India as a country of idyllic villages or when he opposes mass industrialization, but today more than ever, his warning about extreme industrialization and consumerism creating a labor crisis and destroying the ecosystem seems prescient. Like many of the people featured in this book, Gandhi saw entrepreneurship as the means and not the end. Certainly he did not believe that the ends of entrepreneurship can be evaluated through the accumulation of personal wealth. He wrote:

In the same essay, Gandhi added,

This is the social contract that has been broken in India. And yet, in spite of the corruption and crony capitalism, there appears to have been significant churn in Indian business. Recent research
⁷
tries to ask the question—if there is so much crony capitalism in India, does that mean that for the last six decades pretty much the same companies have dominated India Inc.?

The research compared the current top 50 companies in India with the top 50 in 1964 and 1990 (the year before liberalization opened up the economy). What did it find? There were only 11 common names if you compare the top 50 companies list between today and 1964—Tata, Birla, Thapar, Goenka, Bennett and Coleman, Singhania, Amalgamations, Bajaj, TVS, Mahindra, and Wadia.

But how about between 1964 and 1990—was there churn in the top 50 list even before India's economic liberalization in 1991? There were only 17 common names—which means that there was considerable churn even before liberalization.

“If 33 of the top 50 conglomerates now weren't part of this league even 20 years ago, it represents a reasonable amount of churn at the top,” said
The Hindu
report.

But that's not all. Take the top 10 companies in India today and compare them with the top 10 in 1990. Only three names are common—Tata, Ambani and Birla. Of the remaining seven, only Essar and Mahindra were in the top 50 list in 1990. So five companies in the top 10 list of Indian companies today—Vedanta, Jindal, Adani, Bharti and Infosys—either didn't exist or were insignificant in 1990.

The other thing the report looked at was which companies were contributing to this churn. Were they only tech giants like Infosys or Wipro, companies that were growing because, as Mahajan had said, the political system had not discovered them? Not true, said the study. The churn included companies in infrastructure, like Jaypee, GMR, GVK, Lanco and Torrent (the first three are builders of roads, airports, townships and even Formula One tracks, and the last two are power companies); finance (Sriram, about which you have read earlier, and Kotak); media (the Sun Network of the Maran brothers in Tamil Nadu and Subhash Chandra's Zee TV network); and organized Walmart–style retail, with Kishore Biyani's Big Bazaar and auto ancillaries/forging (Motherson Sumi, Kalyani).

The truth is that it is tough to make a generalization about Indian business today, just as it has always been tough to make generalizations about this vast and diverse country. But one thing is certain—if there is dominance of any community or caste at the top of Indian business today, you can be sure that it is being challenged as never before.

This churn is not merely about who is becoming an entrepreneur, or who is able to become an entrepreneur, but also why people are choosing to become entrepreneurs. What is their purpose?

Many entrepreneurs define their purpose in ways that were improbable if not wholly impossible only a few decades ago. For instance, who would have thought that business, of all things, capitalism, and not just politics, would have such a transformative impact on Dalit life and caste in India; who on earth would have believed that a company can be created for maids? And yet, all of this is true in today's India. Of course entrepreneurship is not a magic wand—it will not solve everything, nor will it solve things instantaneously. But business has—largely—never been thought of as part of the solution in India. It has always been thought of—at least institutionally—as part of the problem. The benevolent state and mercenary private enterprise are enduring myths, neither absolutely true, in India even though our experience in the last decade shows that in most public services—from getting a telephone connection to buying a plane ticket—private enterprise has made things cheaper, better, and more accessible. This, in no way, denies the corruption, the adulteration, and the exploitation that some companies have engaged in—and continue—but where competition has been free and fair, usually the market has veered toward getting customers a better deal. An ever demanding customer base has also pushed companies and entrepreneurs to think hard and innovatively about gaps in the market and services that can be rendered—who would think that an Indian village man would spot a gap in the sanitary napkin market or that mobile phone–based voice networks would emerge as the lifeline in the deepest tribal areas of India where the state has failed to deliver any services for decades, perhaps, in some areas, even centuries? My argument is not, and never will be, that private business can solve all of society's problems—perhaps nowhere, but most certainly not in India. The state has a role to play in ensuring justice, equity and democracy. But for too long the state has interfered and impeded the natural entrepreneurial prowess in India—what business, for instance, does the government in India still have, in running hotels? My plea is that for too long the West has heard what it wants to about India—about the slums and the tech companies but never about the truck-financing socialist entrepreneur, about Maoist rebels but never about the ex-BBC journalist building India's Facebook for the poor in the heart of Maoist-dominated India. To see India as the land of slums or slumdog millionaires is the sort of extreme that makes for great headlines across the world. But there is a vast middle India yearning for change, fighting for change, creating change idea by idea, innovation by innovation. I wrote this book hoping that this middle India, my India, would get some recognition.

The present prime minister of India, Narendra Modi, tells a great story. He was once traveling outside India and was asked, “Do you still have snake charmers in your country?” He laughed and said, “Oh no, that was when we were rich and strong. Now we only have mouse charmers.” It is the sort of cliché bursting I have tried, in my own small way, throughout this book.

In a sense, the economic and, often with it, political revolution is coming to India the way Gandhi brought independence, and bringing great social change with it, breaking many prejudices and walls. Not with violence and an uproar, but by slowly chipping away at the problem through careful enterprise. It is going to be a different kind of spring.

This book is about the people who feature in it—and I believe every Indian ought to be thankful to them for their perseverance and fortitude. My dearest friend Ishira Mehta introduced me to many of these people and their stories, and to the Mehta family, including her parents, Preeti and Rupesh Mehta, I am very grateful for all the love that they have showered on me throughout my creative journey.

I would like to thank Emily Carleton, my editor at Palgrave Macmillan Trade, who first embraced this book's attempt to deliver a different narrative of the “India story.” The process of renegotiating mainstream narrative is, I believe, the most important role a writer can ever hope to fill, and critical to that process are editors who think similarly.

Also, it has been a pleasure working with Alan Bradshaw who has really delicately guided this book at every step of the way and, excitingly for me, was relentlessly enthusiastic.

Thank you also to Lauren Dwyer-Janiec for all her ideas about where this book could travel and how far it could go.

At
Fortune India
, I owe a great deal to the help and support of D. N. Mukerjea and Brinda Vasudevan for their incessant affection and urging.

If there is one person who is always joyful about everything I do, it is Shweta Punj. I am delighted and thankful for her warmth.

Not one thing in the journey of
Recasting India
would, or could, have happened without Priya Doraswamy, my friend and astute agent. It is an absolute joy knowing and working with her.

Unless noted otherwise, direct quotes are from interviews conducted by the author from January 2012 to February 2014. Similarly, unless noted otherwise, statistics cited are from public reports of the companies discussed, or public documents whose references are provided in this Notes section.

INTRODUCTION

 1
. In October 2010, the Indian capital New Delhi played host to the Commonwealth Games for the first time. A series of embarrassing allegations of corruption and incompetence, including in the purchase of equipment and amenities, marked the run-up to the event. The chairman of the organizing committee, Suresh Kalmadi, was arrested after the event and was in prison for ten months. He is out on bail. The Commonwealth Games scandal caused major public uproar against India's ruling Congress Party and is widely understood to be one of the key causes of ire against the Congress government in Delhi, which was voted out of power in 2014.

 2
. Subodh Varma, “Income Disparity between Rich and Poor Growing Rapidly,”
The Times of India
, July 8, 2013,
http://timesofindia.indiatimes.com/india/Income-disparity-between-rich-and-poor-growing-rapidly/articleshow/21410981.cms
.

 3
. Arundhati Roy's observations concerning Antilia, Mukesh Ambani's home in India's financial capital of Bombay, appear in the essay “Capitalism: A Ghost Story,” published in
Outlook
magazine in March 2012.

 4
. Alon Confino,
The Nation as a Local Metaphor: Württemberg, Imperial Germany, and National Memory, 1871–1918
(Chapel Hill: University of North Carolina Press, 1997), 7.

 5
. The report of the comptroller and auditor general of India, the central audit body, on the auction of telecom spectrum in the 2G band said that irregularities in the distribution of spectrum on a first-come, first-serve basis, rather than through an auction, by the Congress-led United Progressive Alliance government had caused a loss of Rs 1.76 lakh crore to the exchequer. This was widely seen as one of the biggest indications of graft in the government, and then telecom minister, A. Raja, spent 15 months in prison as a result. He is now out on bail.