1991: How P.V. Narasimha Rao Made History by Sanjaya Baru

Author:Sanjaya Baru [Baru, Sanjaya]
Language: eng
Format: epub
Tags: Cultural, Economics, History, India, Non-Fiction, Politics
ISBN: 9789384067687
Google: Dt0fMQAACAAJ
Publisher: Aleph
Published: 2016-11-15T00:00:00+00:00

The top twenty companies in India, defined by market capitalization, in 1990 were no different from the top twenty in 1980. The only major entrant during the decade was Dhirubhai Ambani’s Reliance Industries. The rest were names that generations of Indians had grown up with. Firms belonging to business houses like the Tatas, Birlas, Bajajs and multinational firms like Hindustan Unilever and Nestlé. The 1990s were different.

If in 1990, Tata Steel, Tata Motors, Century Textiles and Grasim (Birlas) and Mafatlals were among the top ten, by 2000 all of them had slipped down the assets ladder, yielding place to Azim Premji’s Wipro, Narayana Murthy’s Infosys, Ambani’s Reliance, Subhash Chandra’s Zee Entertainment and Shiv Nadar’s HCL Technologies. Change in the Indian business scene was not just at the top. The 1990s was the decade of churning in India’s corporate sector. Unshackled from the infamous licence-permit raj, first generation entrepreneurs made the most of new business opportunities.

Economic liberalization made it easier for new business groups across the country to grow. The licence-permit raj of the Indira era in fact facilitated the growth of oligopolies and crony capitalists, especially the Delhi-, Bombay-, Calcutta- and Chennai-based big business houses. Many government reports made this point. What delicensing did was to make it easier for new business groups to flourish, especially those based in new centres of industrial activity like Gujarat, Karnataka, Andhra Pradesh and Punjab-Haryana. The regional dispersal of business activity was an important motivator and consequence of economic liberalization. Apart from the ‘children of reform’, as Manmohan Singh once called them, like Narayana Murthy and Azim Premji of the information technology services business, new business leaders like K. V. K. Raju and K. Anji Reddy in Andhra Pradesh, Baba Kalyani and Habil Khorakiwala in Maharashtra, Sunil Mittal and Analjit Singh in Delhi, entered the ranks of India’s billionaires at the turn of the century.

PV witnessed the emergence of new business groups from his home state of Andhra Pradesh. One of the architects of the state’s industrial development was Chief Minister Jalagam Vengala Rao, also from the Telangana region, who had been PV’s colleague in Indira Gandhi’s government of 1980-84. PV was acutely aware of the fact that the resistance to his policies came from traditional big business groups, dubbed the ‘Bombay Club’ by the media. The support came from new and upwardly mobile business groups.

The story of Nagarjuna Fertilizers in Kakinada, Andhra Pradesh, is illustrative of the kind of change that industrial delicensing brought about. In the early 1980s, Andhra entrepreneur K. V. K. Raju, a former executive of Union Carbide India, decided to build a fertilizers and chemicals plant at Kakinada. His application for an industrial licence had to compete with one from the Birlas. Raju assumed that the Birlas would have contacts in New Delhi’s Udyog Bhavan, home of the Ministry of Industries where licences were filed and approved. Raju was advised to tie up with an Italian company, Snamprogetti, represented in India by Ottavio Quattrocchi, because of the latter’s clout in the Delhi durbar.

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