Sunday, October 22, 2006

India And India Inc: Tata And Tata-Corus


The day champagne bottles were popped to mark the success of the $7.6 billion Tata Steel bid for British steel maker Corus, the newspapers also noted, somewhere inside, that the district of Vidarbha in Maharashtra had seen another four farmer suicides. This brought the total to almost 1,000 suicides in about a year's time. In just one region.

Tata-Corus was the largest Indian takeover of a foreign company and will make Tata the fifth largest steel player. We must also be the one of the few countries in the world where poverty, deprivation and debt have conspired to kill people at a rate that would match any war zone. Except that there are no suicide bombers here, there are just suicides.

Increasingly, when I am asked by people about what’s happening in India, I say there are two India’s, India and India Inc. There were always two Indias or maybe more but the other India earlier was just educated, aware and ranged in income levels from the middle class to the affluent. Everyone knew they existed but no one really cared beyond that. We could have been another Latin American country.

What Will Happen to Corus ?

I happened to be in London the day Tata’s bid for Corus became public. I also happened to visiting some journalist-friends at the BBC’s White City offices where BBC World is headquartered. Even as I was sitting in the now fully digital newsroom, the tickers began firing more and more takes on the possible deal. The BBC producers quickly realised that this was now the big story of the day. Not just for the Asia editions but also global bulletins.

Being a journalist from India and all that, they felt I might be able to provide some insights. So, I was asked, first, if this bid was for real. Second, they asked, what would now happen to Corus ? Yes, I said to the first, but I didn’t know what to say to the second question. I mean, no one has ever asked me that one before. Its always been, what will happen to some poor unsuspecting Indian company. Not because of a takeover, because we’ve ensured that we don’t really allow those but because of competition that we’ve fortunately allowed.

So there is India Inc, whose image outside is getting more and more menacing, so to speak. I was in Bavaria, Germany before I visited London and a German journalist friend mentioned how there was concern amongst some workers in local engineering firms particularly after Indian companies (like Bharat Forge, M&M) began snapping up assets here. There was even concern over India’s medical tourism initiatives because German medical practitioners would potentially be hit.

Not Just Bangalored


And I am quite happy for that, more so than perhaps the traditional Bangalored view (I will dwell on this more later) where thanks to flat world and all that, Indian engineers and call center executives began plucking jobs out of cubicles of firms in the western world. That’s worrying but not as much as the spectre of someone coming out of the blue and taking over your company one fine morning, or so I would think. Tata taking over a Corus is not outsourcing. It is sheer might and puts Indian companies on the same platform as any large western or for that matter eastern multinational. This my friends, is not a global delivery model. It is a global model.

And there is India, where farmer suicides continue. Where the chief minister of the state of Maharashtra says 40% of the suicides have nothing to do with debt. So in effect, he is not responsible. Didn’t realize that politicians were only responsible for covering people when they went bankrupt. Else, its clearly your lookout. Why then do we arrest people for trying to commit suicide ? I mean if you are not in debt, than its fine, go ahead.

So, India Inc is taking good care of itself, but what's to happen to India ? Well, in a limited way, I think that steps by private sector giants like Mittal and Reliance in building massive supply chains with giant retail front ends with the farmer at the back will create a better deal for many millions. If nothing else, many farmers will get better prices for their product and they will be encouraged to move beyond being marginal land owners. Nothing that the government is doing or is planning to do in this regard will do, much as I hope it will. I only wish we could have similar initiatives for basic education, sanitation and roads. Unfortunately, as we all know, this is still Government territory.

India And India Inc Converge

Until recently, I always thought that it would be the Government that would prop up India while India Inc got the glory and recognition. Increasingly, I feel that India Inc is the only salvation for India as well, at least when it comes to raising incomes and providing livelihoods to the larger millions. Obviously India Inc does it for a profit. But that’s better than the Government trying to do things and handing out monies to middle men. And doing a pathetic job in any case. You don’t have to go to Vidarbha in central Maharashtra, the roads outside my house are a good enough start.

The best thing is that the Tata Group has known this for decades. Its interesting that Tata Steel, whose expenditure on Corporate Social Reponsibility (CSR) is perhaps the highest amongst all Indian companies and thus a wary pick for stock market analysts has also turned out to be a prowling tiger on the global stage. At least today. And that’s where the interests of India and India Inc have converged, I would think. And will come even closer. I think so. Am sure Mr Tata thinks so as well.

11 comments:

amit on 11:15 pm said...

I totally agree with your idea of 2 Indias.

But i believe that its only a matter of time before India Inc assumes responsibility for poor, ravaged and troubled India.

Nilu on 12:35 pm said...

Is there a country on the face of this planet which does not have this dichotomy?

Unknown Indian on 12:55 pm said...

The existence of two Indias is because our politicians and bureaucrats are completely incapable of doing what governments need to do - viz provide access to quality education to all. The only way out is for people in rural areas to realize that farming is a dead-beat occupation, and for them to move to cities (even slums) where they can access schools and move up in life over the course of a generation. The worst case scenario is of course that our politicians will resort to the old Indian frog trick - viz. drag down India Inc to the level of our third rate public sector and villages, instead of letting India Inc at least move ahead in life.

raka on 12:18 am said...

Could not have said it better.

Khozema on 8:23 pm said...

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Tata Händler on 5:46 pm said...

I really can´t say it better.

Karan said...

I don't agree with you in parts.

For one, India has farmer deaths; but that is negligible as compared to a percentage of population. Compare that to farmer deaths in Australia and America.

The same goes with religious strife. As a percentage of population, this is miniscule.

There is a fundamental problem with Indian press, of pointing fingers at an unknown troublemaker. Which of course ends up being the RBI or the government.

Anonymous said...

Get down to basic principles and then when you have humbled yourselves start to discuss as educated elite.

India will only liberate itself when people people stop using slave labour. Can't any one of you people understand this. Whith millions of so called engineers and tecnocrats cant you design and make reliable robust whitegoods and appliances. Then you can eliminate slave labour when you have introduced these labour elimination gadgets like dishwashers, vacuum cleaners etc. into your middle class homes.

Do you still annoy you neighbours living below you in apartment flats by mixing masala and pounding on fucking primitive masala grinding stones using slave labour?

Can't you fucking see that if you employed those very same slaves who wash and clean your homes and make your fucking masalas on grinding stones and hammer and swing clothes on stones to beat out the dirt as respectable gardners and helpers that help beautify your cities and streets and pay them well you will eliminate poverty.

Anonymous said...

Been travelling so todays the first chance to catch up on your blog.

Theres a fair bit of danger when govt. abdicates social responsibility while expecting India Inc to take "their share" of the burden.

Singur is a good example. Here you have the very same CSR flaunting Tatas wanting 551 acres of prime farmland and the govt. doling out 76 crores to just hand it over ! This is another form of land grab.

I cant stand the likes of Mamta but i have yet to read any commentator (including you Govind !!) analysing why cars cannot be built on the acres of wasteland that India is burdened with.
The classical Marxist doublespeak is quiet on this Singur snafu while vehemently flaying the equally flawed SEZ policy.

Oh and why hasnt any self respecting journo got Yechuri to tell us why he isnt standing by his words ?

I distinctly remember a soundbite on NDTV/ICNN saying the Left would not allow multicrop farmland to be handed over to the Tatas.

Ila

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