India Unbound

GURCHARAN DAS

This is a strong and unexpectedly rich bio by the former head of Procter & Gamble in India. Under the guise of a business book, it tells a great deal more, namely India’s emergence as an independent nation and now, fast globalizing society. That sounds dry perhaps. The book is anything but. Das writes learnedly and with great humor.
“Since leaving P & G, I have been consultant to half a dozen Indian companies, and I have concluded that most Indian enterprises suffer from this problem [poor teamwork]… The paradigmatic story concerns two Indians who meet in New York and decide to form an Indian Association. When a third arrives, they form a Tamil Association; with a fourth comes the Bengali Association. And so on until there are fifteen regional associations and the old Indian Association is forgotten. One day someone has the “brilliant idea” to join the regional association into an Indian Association. It’s a funny story, and it makes us laught, but it also illustrates our divisive character. A Swiss manager of a multinational company told me that sure way to inaction is to put two talented Indians on a glbal task force. The will never agree and brilliantly argue the proposal to death.”
… “With great charm, on the spring morning — one of Delhi’s best. We were ushered into the PM’s garden. Mrs. Ghandi looked charming, surrounded by spring flowers. She wore a white Bengal cotton saree with a narrow red border and looked cultivated, aloof, and imperious. She was not a particularly good speaker, although she had the instinctive ability to come up with the right phrase. Looking at her, it was hard to believe that this unimposing woman was the astude politician who had single-handedly destroyed the old Congress bosses and emerged the new messiah of the poor in the 1971 elections. She had dismembered Pakistan after a victorious 14-day war and given birth to the new country of Bangaladesh. She had stood up to President Nixon of the United States; she had been unimpressed by his diversion of the Seventh Fleet with its nuclear-powered aircraft carrier to the Bay of Bengal. Finally she had declared an Emergency and become a dictator for twenty-two months.
After a brief speech, she opened the forum to questions. A few sycophants from the industry got up and eulogized her for her achievements. Then there was silence. Not a single person was willing to risk a hard question. This is embarrassing, I thought. Surely someone will get up. Just as she was about to close the forum, I got up and decided to take my chances. “Madam Prime Minister,” I sad. “May I have your views on two subjects that have been troubling me? The first concerns a friend of mine who cannot introduce a new product into the market because he does not have a license. Meanwhile, his competitor has preempted all the licensed capacity. What should he do?”
Mr.s Ghandi turned to one of her advisers and then artfully defended licensing. “We are a poor country, you see; we have limited resources, which we ration through the licensing system. If we let anyone produce what he wants, we will have no foreign exchange left for the country’s necessities.” All very plausible. I thought, but very bad economics all the same.
“It is a brilliant new product, madam,” I persisted. “What do you think he should do?”
“Has he made a proposal?”
“Yes, it was rejected because of the ‘excess capacity in the industry’.”
Send me the proposal,” she said. Surely it was wrong for the Prime Minister of the country, I thought, to get into such matters. “I was just wondering, Madam Prime Minister, shouldn’t the market decide what should be produced?”
“Does the market always make the right decision?” she asked.
“Not always, madam, but always better than bureaucrats,” I said.
“Ah, we have a market-wallah, do we?” She smiled and gave me a look as though I belonged to the school for the mentally disabled that she had opened the previous day. Others laughes as well and the tension eased.
My second question related to the high cost of our products. I suggested that if we brought down our exorbitant excise taxes and import duties, costs would come down, goods would become cheaper, markets would begin to grow, and government revenues would boom. Mrs. Ghandi shook her head and gave me the same indulgent look. Patiently she explained, “I don’t think industrialists will pass on lower taxes to consumers; lower import duties will fritter away our foreign reserves and businessmen will again clamor for protection because they won’t be able to compete against imports. As for income taxes, if we lower them, who will pay our salaries?” She smiled charmingly. The audience laughed again. I was unconvinced…
With great charm, on the spring morning, amidst shining marigolds, Mrs. Ghandi had attempted to preserve the three myths of the ancien regime — the value of licensing, the importance of high taxes, and the need to limit foreign investment. As I was leaving the PM’s house, an elder statesman of industry nudged me and whispered, “Watch it, young man!” I turned around, but he was gone.


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