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The Rediff Business Interview/R C Bhargava

'Employment creation has to be the primary objective of the Budget'

That is not true. If you sell in totality, people would buy. If you dilute 40 per cent of a sick company, who wants to buy those 40 per cent if he does not have a control over the management of the company and the government continues to run it? You have to prepare companies for privatisation. There should be some financial restructuring and re-engineering, and then sell the company as a whole, not keeping the management with you. Otherwise, what purpose does it serve?

In the context of opening up how far will the swadeshi sloganeering have an impact on the industry?

This swadeshi business is interpreted in different ways by different people. I am not quite sure what it actually means. I don't think anybody in its right mind would say that we should become an economy closed to the outside world. One extreme interpretation of swadeshi would be to say, 'We don't want anything to do with foreigners, we are Indians, we will do everything ourselves, in our own way.' I don't know anybody with any understanding of the modern world would say that.

Certainly I think it is fair to say that Indian industry should not be disadvantaged by any government action. I don't say that they deserve protection. They have enjoyed protection for 40 years. Essentially, the requirement today is for more investment without which you cannot create employment. And employment creation has to be the primary objective of the Budget. Why do you want economic growth? Partly for a better life and more importantly, to create employment. You cannot create employment without rapid economic growth. Our whole social fabric would collapse if we can't generate more jobs. It is a terrible time bomb that we have got! And more jobs mean more investment, better technology, and better management.

How do you think the manufacturing sector would behave in the coming year?

This sector would depend very much on how the market conditions change, whether demand picks up or not. So let us see what the Budget does. I think conditions are changing and I attach a fair amount of importance to this nuclear explosion as a means of making a change in the trend that has been there for the last few years. I think this (the blasts) can be used very well to change the mindset which has developed over the last three years.

Why do the likes of Rahul Bajaj strongly oppose globalisation?

If I have a company which I owned and which I have been running as a family company, basically my intention is that my son and later his son should continue to run it. It is possible that my son and grandson are very competent managers, but it is equally possible that they are not. But my intention is that irrespective of their competence, they must run the company.

So how do I gain by the challenge posed to my company when all barriers to the entry of new technology, new capital, and new products are removed? How do I deal with it? If I want new technology or capital, I should dilute my holdings. People won't give me technology just like that. They would rather come to India, compete with me, and take away my large market share. Why should they give me technology for a licensee fee? I don't have the capacity to develop own technology. We haven't designed anything for the last 50 years. So what is my way of safeguarding my legitimate feeling that my family interest should be protected?

I am not talking about Rahul Bajaj as such, I am talking basically about all family-owned business. Family-owned businesses have been run as much for the benefit of the owner as for anybody else. Perhaps more for the owner. How can I with the traditional style of management compete with companies which are highly professional in their management and who are using evolving technology to get bigger and the technological edge? This is just self preservation. It has nothing to do with the consumer, it has nothing to do with the national interest. Certainly there is no national interest involved in who owns companies that make cars, scooters, refrigerators, washing machines, and television sets.

R C Bhargava, continues

R C Bhargava, back