Saturday, August 26, 2006

Why India, Inc. needs to stop bleating and to get on with real action

According to Boston Consulting Group's recently-released study, "The New Global Challengers" which looked at 3000 companies from "rapidly developing economies" and selected the top 100 for detailed study, China has 44 companies in this list, while India has only 21.

We might also want to keep in mind that China's income per capita (at just over US$1300) is more than twice that of India (just over US$600).

What is the main reason for this difference in performance? Everyone knows and everyone agrees that it India's lack of investment in social and infrastructual development. Whose fault is that? Clearly, the fault of the Indian elite. We have been far busier indulging ourselves than thinking through and doing what needs to be done.

Our political class has begun to wake up. But when it urges simple and clear steps like a quota system to help the "Scheduled Castes and Scheduled Tribes" (SCs and STs) who we have oppressed for thousands of years by means of our religious caste system, what is the response of our business class? Corporate India simply increases the volume of its bleating.

Mr R Seshasayee, president of the Confederation of Indian Industry (CII), speaking on 29 July 2006 at the launch of the CII report ,"Affirmative action for social equity in the work place", could only offer excuses such as that the private sector "could not build an egalitarian society on its own" and that the private sector "could at best be part of the solution". Mr Seshayee is a business luminary who I respect greatly because he is one of the few, apart from the Birlas, who has actually recognised the problem and done something about it. Mr J J Irani is another. However, all of them seem to have become victims of group think.

The affirmative actions proposed under the report, said Mr Irani, "will be done without compromising on competitiveness, in a perfectly voluntary manner". There are two phrases here, and both of them strike a false note. First, no one has asked India, Inc. to compromise competitiveness. In fact, affirmative action is entirely about IMPROVING India's competitiveness by increasing the supply of educated and trained people - a shortage of which is increasingly holding back the country as well as industry. Second, there is nothing voluntary about this report - it has come as a result of the extreme pressure that has been applied by the political class on CII and Assocham. If CII and Assocham wanted to do something about the problem voluntarily, what stopped them recognising it and acting on it for the last fifty or hundred years?

In any case, what is apparent is that the private sector is reluctantly prepared to do only the minimum necessary to help India's (and the private sector's own) continuing growth.

So what is the private sector offering to do? Well, for a start, CII and its sister body, Associated Chambers of Commerce and Industry (Assocham), "will soon formulate a code of conduct for their members to facilitate them take concrete steps". So CII and Assocham think that codes facilitate action?! No wonder India lags China. We still put real action way down the line behind nice-sounding talk.

Even after the codes are formulated, they will not immediately become binding but will "progressively be adopted by their respective members from October, 2006"!

And even after they have begun to be adopted, actions will be initiated only "from 2007".

So what are the mighty actions that the combined power of CII and Assocham will accomplish? Well, they will establish coaching centres in 10 universities for 10,000 students. What will be the budget for setting up these coaching centres? What will these centres coach people to do? How long will be the courses in these centres? How will the effectiveness of the coaching be judged? We haven't been told....

Further, CII and Assocham will attempt to help 100 people from the untouchable and other oppressed classed to start(presumably small) businesses. Did you get that number? Not a million, not a hundred thousand, not ten thousand, not a thousand, but one hundred! Come on CII! Come on Assocham! Are we supposed to take this seriously?

Oh, I forgot about the FIVE scholarships for study abroad and the FIFTY scholarships in the national institutes!

But I am being uncharitable. CII and Assocham have also promised to "work towards greater representation of SCs and STs in their workforce". Do these august bodies not know, or are they simply refusing to recognise, the difference between input and output? Input is the work that might or might not be done. Output is what will be accomplished. What matters is not what work they do "towards greater representation". What matters is whether representation will actually be increased. How will we know whether representation will actually have increased if we don't know what the representation IS at present? So the first step that anyone serious about such matters would have taken would have been to commission a study of how much representation there is at present. Then in a year, or in subsequent years, we would know how much progress has, or has not, been made.

One last matter: by what refined and exalted process of strategic analysis did India's business elite hit upon these as the most important steps for addressing one of our key constraints to growth? Sphere: Related Content

1 comment:

multisubj yb said...

I fully agree with you.
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