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With Modi as PM, it is India's Time in the World

One can expect tangible results from Modi, but he will need a bit of luck too

Rich Karlgaard
Published: Aug 29, 2014 06:06:28 AM IST
Updated: Aug 25, 2014 12:09:11 PM IST
With Modi as PM, it is India's Time in the World

I was filled with dread as the giant Airbus 380, which looks like a flying Baby Beluga whale, dropped me and 524 other passengers at Mumbai’s Chhatrapati Shivaji International Airport. Welcome to India, the land of dreams and utter dysfunction. Get ready for a one-hour shuffle through customs, I thought, followed by car confusion and a two-hour drive to the Taj Mahal Palace hotel.

Except that didn’t happen. Passing through customs was a breeze. Getting into the car, I looked over my shoulder at the stunning Terminal 2, possibly the most advanced and certainly the most beautiful airport building in the world. The ride to the Taj took 40 minutes.

These are surface impressions, of course. But if the India of five years ago made one worry that a country so gifted in software could never do hard- ware—or infrastructure—well, it’s time to rethink that image. The ducks are lining up for India. The world’s largest democracy could blow its advantages yet again, but I don’t think it will.

One reason is Narendra Modi. A Hindu nationalist and Bharatiya Janata Party leader, Modi became India’s 15th prime minister in May. He’d previously been chief minister of Gujarat, a small northwestern state of 60 million people. During his 12 years at the Gujarat wheel, Modi cut red tape and taxes and made the state investor- friendly. Gujarat now leads India in economic growth and employment.

The question is whether Modi’s methods can scale to a country of 1.2 billion. He is, by temperament, strong-willed and not adverse to bulldozing his political opposition. A condition for shared prosperity, not the other way around. In this, he diverges from India’s recent leaders and anyone named Gandhi. If you cheer for Modi, you hope he’ll be like Lee Kuan Yew, the father of modern Singapore. Mr Lee was often criticised for using a strong hand that stretched Western notions of democracy.

Luck and Courage
Modi will need a bit of luck and a lot of courage. The late monsoon season is likely to cause food shortages, which will add to India’s price inflation. Angst over high food prices might have figured in Modi’s first budget, submitted in July. The cuts to deficits and subsidies were less substantial than many reformers had hoped they’d be. Nevertheless, India’s stock market is up 5 percent since Modi took office. There’s more reason to be hopeful than not.

Prosperity, of course, isn’t caused by government. It’s created by entrepreneurs and entrepreneurial companies. Few companies in the world are better at creating shared prosperity than the Tata Group, a 146-year-old Indian company with roughly $100 billion in revenue. If you hang around the technology world, you know about Tata Consultancy Services. It did $11.6 billion in sales in 2013 and is expected to show $14 billion in 2014.

But Tata is also in airlines, automobiles, steel, electricity, construction, hotels, and food and beverages. Tata has more than 100 lines of business and operates in more than 100 countries. I stayed at a Tata hotel— the luxurious Taj—and was driven around in a beautiful Tata-made car—a Jaguar XJ that’s more reminiscent of a Bentley than the faux Jags of the Ford Motor-ownership era.

How does a global conglomerate of Tata’s size stay in top form across its various industries without reverting to the mean? Tata’s success comes from a blend of strategy, execution and strong cultural values. More than most, Tata puts real thought and muscle behind the oft-neglected cultural side of business.

In Tata’s historic Bombay House headquarters, I spoke with Mukund Rajan—brand custodian and chief ethics officer. Rajan’s dual title hints at the way the company views the world.

“Tata plays a long game,” said Rajan. “In the long run trust, ethics and good corporate citizenship create happiness, which ultimately leads to success.” Rajan says the age of social media and hypertransparency is good for Tata’s historic values. “Those who take shortcuts for the bottom line will be found out sooner.”

If the rest of India follows Tata’s example, expect tangible results from the land of dreams.

Rich Karlgaard is the publisher at Forbes

(This story appears in the 05 September, 2014 issue of Forbes India. To visit our Archives, click here.)

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  • Dr. Jagdish Pathak

    Hi Rich PM Modi has many of those qualities, if not all, of Mr. Lee of Singapore. He is hardnosed individual and many of his most accomplishments in Gujrat reflect this uniqueness in him. Modi is aspiring higher and this time his aspiration is not to b the PM of India but to take this nation of 1.2 billion to a higher level. This higher level for him is the growth and development of manufacturing sector side-by-side the already existing software industry. His dreams are larger than life for his opponents but he believes in those dreams. He is bi-partisan when he talks of nationalism and cleanliness of the nation. Indian economy needed a true leadership on political front hitherto missing since last 30 years or so. Political leadership is very significant and if it is strong one, then I will call it critical. PM Modi actions during the last four months have given us a sense of what to expect from him. He is astute and suave at the same time. India with all the diversity needs such leadership. You might have noticed that his detractors have started coming close to him because everyone feels it is different. Some may even call him Modi 2.0. I may not agree with this nomenclature as I know it full well that it was the establishment at the federal level and some vested interest media and NGOs knew full well that a growing Modi is danger to the existing polity of Congress. He should be made unpopular in the eyes of the international decision makers. They achieved some success in thwarting Modi agenda of international cooperation for Gujrat but people of India at large understood the game plan of vested interest people and parties. Obviously you see the outcome clearly in the Indian politics. Tata enterprises are one of the oldest in India and its history goes back in the days of British colonial time. They, as Rajan of Tata observed, had always been long players. If you compare them with most of Western business conglomerate, none can be easily compared with the Tata. Tata started with infrastructure industry in the steel sector and now they are almost everywhere from salt to software. Tata ethics had always been worth comparing and contrasting with the ethics and CSR of any best conglomerate in the World. Indian economy got some of the best milestones from the Tata stable. Your article has given a brief but lucid narrative of beginning of Modi period in the nation of 1.2 billion people. It is just the beginning. Professor (Dr.) Jagdish Pathak Odette School of Business University of Windsor, Canada

    on Oct 28, 2014
  • Emaan Singh Mann

    Mr. Karlgaard, Your sunny optimism ignores the fact that Mr. Modi and the BJP orchestrated a pogrom against a minority community in Gujarat, much like Rajiv Gandhi and the Congress did so in New Delhi. The second half of the essay comments on the ethics and values which drive long term business growth as espoused by the TATA group. Perhaps you should look into the ethics and value\'s of Mr. Modi and the BJP before commending their virtues. The glitter of the airport in Mumbai fascinates and reassures you, I am sure visitors to the Nationalist state of Germany must have been equally impressed with the trains running on time in the 1930\'s.

    on Aug 30, 2014
  • M G Warrier

    I loved this article for its refreshing, positive approach to the changing India. Reminding about Tata\'s legacy and methods of doing successful business in India for over a century without compromising values at this point of time without hurting anyone is an art very few can master. After all, it is not the length of the tenure of Modi\'s Prime Ministership that will decide India\'s future. The deciding factor is going to be the awareness this decade has brought to \'WE THE PEOPLE\'(Refer Preamble of Indian Constitution) about the need to participate in the process of governance. That Modi has judged the concerns of the people of India was loud and clear in his message from the ramparts of Red Fort on August 15, 2014.

    on Aug 29, 2014