The industrial revolution that propelled England and the US passed India by
It is not my intention to sound completely negative but it is important to understand how the whole industrial revolution that changed Britain and the US bypassed India. We were brainwashed into believing that all the good things came only from the West even if they were oversized tomatoes or brinjals!
THE CIVIL SERVICE
What is equally interesting was that everybody was keen to work only for the government because Britain wanted to ensure that there were good civil servants to keep everything under control. Hence, becoming a collector or lawyer was considered the pinnacle of achievement. Needless to add, there was no such prestigious tag attached to an entrepreneur! In this backdrop, when India attained Independence in 1947, she was virtually at the crossroads. The biggest dilemma was that there was really no idea which way to go in terms of an appropriate governing model.
As is well known, the government eventually opted for the socialist pattern as it seemed the best bet to answer the glaring issue of poverty. Russia also seemed a fresh alternative after years of colonial subservience. The fact also remained that the country had done well for itself. India gradually moved towards the socialistic pattern of society and got into huge steel mills and power plants. In the process, the symptoms associated with the (then) public sector like inertia and wastage also became part of the system.
What was equally alarming was that the foreign exchange reserves which we had in 1947 had dwindled two decades later. The government decided that it had to do its bit in helping industry except that there was no money. We were told that everything would be rationed and this was the beginning of the huge bureaucratic structure where everything was scrutinised before a licence was awarded to any industrialist!
Obviously, these were not the easiest of times. Those who were able to manipulate the system prospered while the others were not as lucky and were left behind. They suffered in the process and remained small. And then there were people who took advantage of the system and blocked others from getting in. All these things were possible because of scarcity. This was when India began slipping gradually. Where we should have become a force to reckon with, given the kind of human and mineral resources we had, we were instead depending on foreign aid. We also had to build up our defence forces after the China setback in 1962, the Pakistan war and Kashmir. We did not have the money to support these efforts.
If private enterprises had been freed at that time, it is quite likely that we could have found an alternative route to prosperity. But then it was not to be as each succeeding government followed up on the socialistic pattern of society. Capitalism became a bad word and anybody who supported it was considered antinational.
TVS SUCCESS STORY
TVS survived because it kept a very low profile. We went into trading. When the Indian automotive industry was in its infancy, the government decreed that it must rapidly it was difficult to continue importing parts. This was why General Motors closed down its plant in Bombay after decades of operating here. Of course, Hindustan Motors and Premier Automobiles were around with Telco and Leyland. These companies wanted to indigenise and since we had the experience in distribution of spares, we went into collaborations with companies we had been dealing with and produced them locally.
Just to get back a little earlier, during World War 2, there was a severe shortage of petrol and tyres in India. TVS got into manufacture of producer gas plants which ran on charcoal. These were supplied to cars, buses and trucks and became a huge hit. I remember my uncle telling me that he used to travel all the way to Karachi to sell these! When tyres became scarce, TVS went into retreading. My father learnt the art at GM and set up a retread company, Sundaram Industries, which is still around. The severe shortage of spares prompted the group to foray into reconditioning and many TVS workshops emerged to support this activity.
##### BUSES IN MADURAI
Hence, wartime threats or adversity turned into opportunities. Equally, as readers are aware, when there was no public transport in Madurai (Tamil Nadu), TVS kicked off a bus service in 1940. The buses were famous for their punctuality and are still remembered to this day. What TPM and TQM teach today was done by TVS in those days. We then began manufacturing and grew gradually. However, India could not sustain itself and at a point of time, just ran out of steam. We barely had forex to last a month and had to pledge our gold.
Readers would recall that we still could not export and tap industrial markets because the rupee was still Rs 8-12 while in the black market, it was quoting at Rs 40-50. So a lot of black money was being generated. However, post-1991, the rupee, over a period of time and through different mechanisms, was valued upwards to a point when we could export. This was a huge impetus to companies and it was around this time that outsourcing became a fashionable word in the western countries. Until then, they were happy because they were making good money! Between 1985 and 1997, exports started but still India did not have a place in the world market. The foreign exchange reserves were reasonable but not huge. Then Y2K happened and India just grabbed the opportunity with both hands.
It was a big turning point for the IT industry. By 1996, the fear of Y2K had started playing up in people’s minds and they wondered what would happen if computers crashed. The same bogey was there right from the Fiji islands all the way to California. Where else could they turn to but India? Everywhere else, it was enormously expensive to do this kind of reprogramming for computers. The year 2000 came and nothing happened. After this, these companies here went into overdrive and got into a whole lot of areas like insurance, banking, medical, BPO etc. The automotive industry was also well placed by this time to think of good growth. Even today, if you talk of engineering, the biggest forex earner is the components sector.
It was also amply clear that liberalisation was the best thing that happened to India. Foreign companies began coming in and this was also the time when TVS began the process of buying out its joint venture partners’ stakes. I have always maintained that only truly Indian companies can become Indian multinationals. You cannot have a joint venture company and become an Indian MNC. You have to be 100 percent Indian like a Tata or Birla to become multinational. Today, Indian industry is doing well and the West sees us progressing well with about nine percent GDP growth and foreign exchange over $200 billion. With a billion people and demography in our favour (the number of young people in India is much more than the Chinese), the potential growth here is so much more.
THE WAY AHEAD
My personal feeling is that the future belongs to India and China. The West sees youngsters here keen on wearing designer clothes with enough money to spend. Every Tom, Dick and Harry has a cell phone right from the vegetable vendor to the top guy in industry! My grandson asks me how I managed to live without one for all these years! We lived without emails, television and cell phones. When I got married, we did not have a TV at home and to entertain ourselves, we went to movies or a club. Today, we have even forgotten the art of writing letters. Telephones were difficult because calls would have had to be booked and lines were constantly busy. The memorable parts of these hard times were that the operator became a part of the family because every call was routed through him/her! I am not trying to be judgmental here but am only trying to drive home the point how quickly things have changed. And all for the better by the end of the day!
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