INDIA'S MOST RESPECTED COMPANIES Rs 200 Knowledge Partner www.businessworld.in RNI NO. 39847/81 I 01 JUNE 2024 Google India, HDFC Bank, Amazon India, Reliance Industries, Tata Consultancy Services, Apollo Hospitals Enterprise, State Bank of India, HCL Technologies, Infosys, Sony India, Reliance Retail, Apple India, Tata Power Company, NTPC, Wipro, Adani Enterprises, Asian Paints, Indian Oil Corporation, Dr. Reddy’s Laboratories, Patanjali Foods, HDFC Life Insurance
4 | BW BUSINESSWORLD | 01 June 2024 “Respect for listed companies stems from their actions, not their status.” — Warren Buffett THIS SPECIAL issue contains our annual feature on India’s Most Respected Companies. We track strong and resilient India Inc.’s narrative as it bounced back from the challenges posed by a pandemic and the slowdown that followed. The 2024 list of India’s Most Respected Companies has been prepared in collaboration with TechSci Research, at the end of a perception survey of leading listed companies, based on their overall performance in the 2022-23 financial year. We don’t just assess the financial performance of the companies, but also delve into their ethos. It is evident that India’s top listed companies wield significant influence not only over the country’s economy, but also over Indian society through their corporate social responsibility (CSR) initiatives. In the 2023 financial year India Inc. actively contributed towards uplifting society through its robust CSR programmes and employee-centric policies. Indian companies have created wealth and prioritised shareholder returns. The featured companies have emerged as responsible corporate citizens, leveraging their resources and expertise to address pressing societal issues and nurture conducive work environments. The Most Respected Companies are those who simultaneously demonstrate a deep commitment to their stakeholders and the broader community, who diligently work towards sustainable development, shared prosperity and nation building. Do read our in-depth report on the splendid growth of India’s construction equipment industry, thanks to the strong government-led investment in infrastructure projects. This trend is expected to continue through the second-half of the current fiscal. We also bring to you a special package on India’s Direct-to-Consumer (D2C) market which hurtles towards three-fold growth and a cumulative turnover of $100 billion by 2025. This landscape is being fired by disruptive innovation. Powerhouses like Nykaa, SUGAR, Lenskart, boAt and many others, aren’t just challenging traditional industries, they are redefining them. Challenges lurk around this glorious path too. Fast moving consumer goods (FMCG) giants for instance, are now acquiring D2C startups in a bid to stay relevant. Even amidst this consolidation, D2C brands continue to attract both funding and celebrity engagement. As pioneers like Mamaearth and Nykaa lead the way in raising equity through initial public offerings (IPOs), the D2C sector is poised to reshape and redefine India’s retail landscape. Of course, we also bring to you all our regular columns and features. Happy reading! ANNURAG BATRA [email protected] RESPECT IS NOT ABOUT WEALTH, BUT ETHOS EDITOR-IN-CHIEF’S NOTE
6 | B W BUSINESSWORLD | 01 June 2024 BW Businessworld does not accept responsibility for returning unsolicited manuscripts and photographs. All unsolicited material should be accompanied by self-addressed envelopes and sufficient postage. Published and printed by Annurag Batra for and on behalf of the owners, BW Businessworld Media Private Limited. Published at 74-75, Scindia House, Connaught Place, New Delhi-110001, and printed at Thompson Press India Limited. Editor : Annurag Batra. © Reproduction in whole or in part without written permission of the publisher is prohibited. All rights reserved. R.N.I.No. 39847/81 BW Businessworld Media Private Limited EDITORIAL OFFICES BW Businessworld Media Pvt. Ltd. 74-75, Scindia House, Connaught Place, New Delhi-110001 Phone: 9818063325 ADVERTISEMENT / CIRCULATION / SUBSCRIPTION ENQUIRIES BW Businessworld Media Pvt. 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8 | B W BUSINESSWORLD | 01 June 2024 MAILBOX YOUR COMMENTS TALK BACK The DISRUPTORS WOMEN Women entrepreneurs and intrapreneurs who are reshaping industries with their innovation and leadership Rs 200 1.Niharika Jalan, 2. Neha K Bisht, 3. Arushi Verma, 4. Akansha Vishnoi, 5. Amrita Gupta, 6. Meena Kapoor, 7. Akshaara Lalwani, 8. Aakanksha Bhargava, 9. Aastha Singh, 10. Joyeeta Ghosal, 11. Panchali Mahendra, 12. Jayshri Patil, 13. Aishwarya Jhawar, 14. Radhika Shrivastava, 15. Prachi Kaushik, 16. Utshah Sharma, 17. Rithika Agnishwar, 18. Ramya Venkataraman, 19. Priyanka Salot, 20. Priyanka Jain, 21. Rashi Agarwal, 22. Renu Singh, 23. Vishakha RM, 24. Sonica Malhotra, 25. Ritika Sahni, 26. Sonali Jindal, 27. Santosh Agarwal, 28. Roma Roy Choudhury, 29. Sharmila Thanki, 30. Shavita Bhatti, 31. Udita Bansal 1 2 3 4 5 6 7 8 9 10 11 12 13 23 14 15 16 17 18 19 20 21 22 24 25 26 27 28 29 30 31 www.businessworld.in RNI NO. 39847/81 I 18 MAY 2024 PHARMACY OF THE WORLD This refers to the editorial (“The Time for a US-India Partnership in Biotech is Now”, BW, May 18). India’s burgeoning digital infrastructure and expansive population present an unparalleled opportunity for US biotech firms to revolutionise drug development. As the article mentioned, by leveraging India’s diverse disease pool and rapidly growing clinical research capabilities, US biotech companies can accelerate therapy development and gain crucial insights into disease progression. Furthermore, India’s expertise in pharmaceutical manufacturing technology offers a strategic advantage, especially as the industry transitions towards biologics. However, stringent regulatory measures must be established to address potential disputes and ethical concerns, ensuring transparency and fairness for all parties involved. With the right framework in place, a collaborative effort between the US and India holds the potential to transform global healthcare, marking a monumental leap forward in the field of therapeutics. AMIT PANDA, EMAIL THE 5G WAVE This refers to the editorial (“Riding The FastData Wave”, BW, May 18) India’s telecom sector has undeniably carved a revolutionary path in the domain of 5G, marking an outstanding journey of progress and innovation. With the seamless integration of 5G services, providers such as Reliance Jio have propelled their global presence, setting unparalleled standards in data traffic and subscriber growth. The upcoming spectrum auction holds the promise of unlocking even greater potentials, yet the cautious approach of some incumbents may underscore the need for strategic decision-making. As the 5G landscape continues to evolve, it’s evident that India’s telecom renaissance is not just about speed and connectivity, but also economic revitalisation and inclusive growth. VIKASH VASHISTH, EMAIL BLIPP THIS PAGE TO GIVE US YOUR FEEDBACK INSTANTLY Submissions to BW |Businessworld should include the writer’s name and address and be sent by email to the editor at [email protected] or by mail to 74-75, Scindia House, Connaught Place, New Delhi-110001
10 | BW BUSINESSWORLD | 01 June 2024 MRC Cover design by SHIV KUMAR Respect And Respectability Respect for companies is a sum total of intangible and tangible factors although on the ground it is derived mainly from financial performance, work culture, innovation, corporate governance, and commitment to CSR initiatives, among other things 52 14 Jottings Is it time to cut retail fuel prices; Apple’s move now; The biggest festival of democracy; Mumbai’s OOH disaster, and more 18 Columns Minhaz Merchant (p. 18); Kiran Karnik (p. 20); Prakash Iyer (p. 22); Vikas Singh (p. 24); Jae Yu & Amit Kapoor (p. 28);Srinath Sridharan (p. 30); Krishan Kalra (p. 32); Arijit Ray (p. 106) 36 Political Advertising A peek into political advertising in India and how it has undergone a metamorphosis, going beyond print ads to comprehensive 360-degree campaigns orchestrated by creative agencies 38 Nation Building A look at how the Narendra Modi government’s infra-led growth agenda has resulted in an unprecedented and long-term boom for the Indian construction industry 42 In Conversation Deepak Shetty, CEO & MD, JCB India on how the company is driving innovation and efficiency in India’s construction equipment sector, playing a vital role in indrastructure development and fuelling economic growth 44 Interview Canara Bank CEO & MD K. Satyanarayana Raju on RBI’s draft rules for lending, heightened monitoring of under-construction infrastructure projects, and much more CONTENTS VOLUME 43, ISSUE 16 01 JUNE 2024 Photograph by Krakenimages
96 | B W BUSINESSWORLD | 27 January 2024
12 | BW BUSINESSWORLD | 01 June 2024 The pages in BW Businessworld that are labelled BWi or Promotions contain sponsored content. They are entirely generated by an advertiser or the marketing department of BW Businessworld. Also, the inserts being distributed along with some copies of the magazine are advertorials /advertisements. These pages should not be confused with BW Businessworld’s editorial content. TOTAL NO. OF PAGES INCLUDING COVER 132 46 Wrong Precedent? An indepth analysis of the Supreme Court’s landmark judgement on the Delhi Metro Rail Corporation’s curative petition, how it impacts the tenets of law in India, and its wider implications for the country MOST RESPECTED COMPANIES 56 Google India 58 HDFC Bank 60 Amazon India 62 Reliance Industries 64 Tata Consultancy Services 66 State Bank of India 68 HCLTech 70 Infosys 72 Sony India 74 Reliance Retail (AJIO) 76 Apple India 77 Tata Power Company 78 NTPC 80 Wipro 82 Adani Enterprises 84 Asian Paints 85 Indian Oil Corporation 86 Dr. Reddys Laboratories 87 Patanjali Foods 88 HDFC Life Insurance 112 D2C: The Road Ahead A look at what the future holds for the D2C market in India that today boasts over 900 brands,and is expected to reach $100 billion in size by 2025, in view of the acquisition spree by the larger FMCG brands and the customers’ addition to quick commerce 116 Photo Essay Snapshots from the BW Marketing World D2C Conclave 2024 that apart from honouring top D2C brands aslo fostered discussions on strategic shifts required for D2C brands to thrive in the evolving market landscape 124 Gadgets A review of the OnePlus Nord CE4, the mid-range or under Rs 25,000 phone that is touted as the best in its class 126 Bookmark Interview with former Reserve Bank of India governor Duvvuri Subbarao on his memoir Just a Mercenary? – Notes from my Life and Career and the role of the central bank 90 MRC Ranking Tables 108 D2C Disruptors BW Disrupt and BW Marketing World, in association with BW Businessworld felicitates the top 60 D2C brands recognising the vital role they play in consumer lives and shopping habits 120 MONEY WISE How millenials are not just savvy about spending money on food, travel and online shopping, but are also smart at saving as well as online trading and investing 129 Last Word Jayen Mehta, Managing Director, Amul on what constitutes respect in a corporate setup, and more CONTENTS VOLUME 43, ISSUE 16 01 JUNE 2024
14 | BW BUSINESSWORLD | 01 June 2024 JOTTINGS IS IT TIME TO CUT FUEL PRICES? I N THE REALM of fiscal achievement, state-owned oil marketing companies (OMCs) emerged as titans, weathering geopolitical storms and volatile crude oil prices to deliver a stellar performance in FY2023- 24. Be it Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), or Hindustan Petroleum Corporation (HPCL), all the pubic-sector oil marketing companies delivered a record performance in FY2024. Despite their commendable results and efforts to ensure that fuel prices remained stable – and despite rewarding their shareholders through record throughputs and judicious capex utilisation – critics feel it was time for them to share their profits. The OMCs collectively raked in a profit of a whopping Rs 86,000 crore, over 25 times higher than in the previous year. The HPCL swung from a Rs 6,980 crore loss to a Rs 16,014 crore net profit, while IOCL achieved historical highs in refinery throughput, sales volume and net profit. The BPCL too shone, posting a Rs 26,673 crore profit, a 13-fold increase over the previous year. The market response is positive, with BPCL and HPCL shares soaring post-results, and analysts endorsing a buy recommendation, affirming the companies’ fiscal strength and future prospects. The state-owned OMCs thrived during F Y2024, benef it ting f rom a judicious mix of f reedom and accountability. This approach fostered an environment conducive to ambitious projects aligned with the vision of Viksit Bharat, 2047, ensuring a promising future for these industrial giants. Will the OMCs and the new government now examine the option of cutting retail fuel prices to tame inflation, and high-cost of essential food items? Fingers crossed! —Ashish Sinha APPLE’S MOVE NOW TECHNOLOGY giant Apple is clearly being perceived as a laggard in the market compared to its counterpar ts in terms of artificial intelligence (AI). However, recent developments suggest that a shift could be in the works. With OpenAI’s unveiling of GPT-4o AI model and Google’s AIcentric announcements at the I/O event, the spotlight is now on the Cupertino-based company. Apple’s strategic manoeuvres h i n t a t a c o m e b a c k o n t h e competition trail. The introduction of a specialised ChatGPT app for macOS, alongside subtle indications of a deeper dive into AI during recent events and earnings calls, indicates a newfound focus of the company. Speculations of a collaboration with OpenAI for iOS 18 are further fuelling this anticipation. As the tech world eagerly awaits Apple’s WWDC on 10 June, all eyes are on the company. Will Apple seize the opportunity to unveil a groundbreaking AI strategy? Anticipation is palpable for the iPhone-maker’s next move in AI. — Rohit Chintapali
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16 | BW BUSINESSWORLD | 01 June 2024 MAY WAS ALL ABOUT HEAT in India, both literally and rhetorically. The days were hot and so were the political diatribes of the contestants for the 543 seats of the 18th Lok Sabha. Ironically, the zeal of the Indian electorate seemed to rise with the mercury and polling turnouts for four phases of the polls was 66.95 per cent phase of polling for “the biggest festival of democracy” (to borrow a phrase from the ECI’s notification for the general elections in 2024). Maximum temperatures were in the range of 42 degrees to 44 degrees in parts of Rajasthan, Uttar Pradesh, Punjab, Haryana and Delhi on 15 May and rising. So voters for the five constituencies in Bihar, 13 in Maharashtra, 14 in Uttar Pradesh and three in Jharkhand cast the ballot amidst blazing heat. The other constituencies that went to poll in the fifth phase were three in Jharkhand, seven in West Bengal, five in Odisha and one each in the salubrious climes of Jammu and Kashmir and Ladakh. Was it Sachin Tendulkar’s mobile phone message, the legend on the milk pouch that said, ‘Chunav Ka Parv, Desh ka Garv’ and the Doordarshan short films that enticed Indians to brave the weather, or were they out to set the political climate right? — Madhumita Chakraborty The ‘Biggest Festival of Democracy’ THE RECENT TRAGEDY i n M u m b a i , w h e r e a n illegal 14,400 squarefoot billboard collapsed, c l a i m i n g 16 l i v e s a n d injuring 74 others, is a harsh reminder of the disastrous consequences of an unregulated and unchecked outdoor (or Out-of-Home) advertising industry, especially in the metropolitan cities. While the outdoor advertising market is expec ted to cross Rs 45 billion by 2024, according to a FICCI-EY report, the lack of clear regulations of the uncontrolled sector poses a severe threat to public safety and the sector’s growth potential. It is high time that the civic and government authorities OOH DISASTER c o n c e r n e d i n m a j o r cities took a proactive stance and implemented stringent regulations for outdoor advertising on the lines of those for the construction industr y, which adheres to strict guidelines on precautions against natural calamities. N o n e t h e l e s s , t h e s e unregulated billboards cast a shadow over the i n d u s t r y ’s c r e d i b i l i t y and impede its grow th trajec tor y. Immediate attention is crucial to stabilise the outdoor advertising sector, as much as to sustain it through increased spending on advertisements. — Reema Bhaduri after a very tame start in April, aided perhaps, by the Election Commission of India’s (ECI) media blitz urging the electorate to exercise their right to franchise. T h e I n d i a M e t e o r o l o g i c a l Department (IMD) predicted heat wave conditions across northwest India and Bihar through the fifth Photograph courtesy: PIB Photograph by Poramatepilay / CANVA JOTTINGS
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18 | B W BUSINESSWORLD | 01 June 2024 N MAY 1998, the relationship between India and the United States hit rock-bottom. Following the Pokhran II nuclear test, US President Bill Clinton imposed sweeping sanctions on India. It took two years to heal the fissures. In March 2000, when Clinton visited India, he was a changed man. He lavished praise on Indian infotech companies that had helped the world overcome the technological challenge of Y2K, as global banks and corporates switched their critical software seamlessly between 1999 and 2000 in the new millennium. By 2006, the India-US relationship had strengthened further with the signing of the civil nuclear deal between Prime Minister Manmohan Singh and President George W. Bush. The relationship was elevated to the status of a strategic partnership after 2014 with Prime Minister Narendra Modi establishing a strong rapport with three US presidents – Barack Obama, Donald Trump and Joe Biden. What has gone wrong? Why have the US and its English-speaking allies, principally Canada, targeted India’s growing covert intelligence capability designed to neutralise threats from terrorists and separatists? US and Canadian authorities have arrested Indian citizens allegedly involved in covert assassination operations against Khalistani separatists in North America, raising hackles in both the West and India. India’s covert operational capability was shut down by Prime Minister Inder Kumar Gujral’s United Front (UF) government in 1997. It has taken several years after Modi took office in 2014 to rebuild it. Research and Analysis Wing (RAW), India’s external intelligence agency, and the Intelligence Bureau (IB), which handles internal security, have had their remit broadened under National Security Advisor (NSA) Ajit Doval. The “mysterious” deaths of over 10 Islamist terrorists in Pakistan and Britain over the past year has been attributed to Indian covert operations outsourced to local mercenaries. Western spy agencies like the CIA and Britain’s M16 started to take notice when the long arm of Indian covert operations reached Western soil with plausible deniability. Intelligence agencies in the West have been engaged in undercover operations for decades. Those include overthrowing foreign governments in West Asia and South America, fomenting rebellions in Africa, and assassinating military leaders across the world. For the West, the rest of the world is a hunting ground to neutralise those who harm the West’s interests. But for the rest of the world, Western soil is strictly off-limits. Modi has turned that rule on its head. When Khalistani separatists began to receive political support and protection from the Canadian government, Modi urged Prime Minister Justin Trudeau to rein in extremists who operate with impunity in Canada, threatening violence against Indian diplomats in Toronto and Vancouver. Instead of acting on these legitimate concerns, Trudeau’s Liberal Party, which runs a minority government, took the support of the National Democratic Party (NDP), India’s Western Reset I Minhaz Merchant COLUMN MINHAZ MERCHANT The writer is the biographer of Rajiv Gandhi and Aditya Birla and author of The New Clash of Civilizations (Rupa 2014). He is founder of Sterling Newspapers Pvt Ltd., which was acquired by the Indian Express Group
01 June 2024 | B W BUSINESSWORLD | 19 Act (CAA) and the arrests of Indian Opposition leaders. US and European leaders have long resented India’s position on the Russia-Ukraine war. New Delhi has refused to condemn Moscow and continues to buy crude from Russia, bypassing US sanctions. India’s operational capability to fight internal security threats has also increased. Indian paramilitaries use drones to identify Naxal positions and follow up with ground assaults. In a recent operation, 29 Maoists were killed in Chhattisgarh in a joint operation of the Border Security Force (BSF) and Chhattisgarh police. In 2024, so far, over 90 Maoists have been neutralised by Indian security forces. India’s growing clout in global affairs and a buoyant economy has led many in the West to question whether an “authoritarian” India was “a good fit” in the Western alliance. With India’s economy set to cross $4 trillion by the end of calendar 2024, the view in some quarters in Washington is to recalibrate the relationship. But wiser counsel has prevailed. The US knows that the next 25 years will be dominated by China, America and India. With China irredeemably hostile to the US, Washington can’t afford to antagonise India beyond a point. US President Joe Biden’s recent throwaway remark on India not being open to immigration and therefore “xenophobic” like China, Russia and Japan wasn’t a slip of the tongue. The White House doubled down on the comment the next day. It was left to India’s External Affairs Minister S. Jaishankar to set the record straight at a roundtable conference on May 3: “India has been a society which is very open. Different people from different societies come to India.” Commenting on the spate of assassinations of Pakistan-based terrorists, Jaishankar added ambiguously: “Statistically, where terrorists will be in large numbers, things will happen to them. They have created an industry which is a terrorist industry. Things could happen there.” India is clearly unwilling to take a step back. The relationship with the West is due for a reset. headed by Khalistani supporter Jagmeet Singh, to stay in power. Sikhs For Justice (SFJ), a terrorist group proscribed by India, has publicly called for violence against Indian targets. It has threatened to bomb Air India passenger jets and attack Indian Parliament. Many Khalistani separatists have ties to Pakistan’s spy agency InterServices Intelligence (ISI). They receive logistical support and funds from the ISI. While the Khalistani separatist movement has no traction in Punjab, it is used by extremists in Canada, Britain, Australia and the US to target Indian diplomatic missions. Arson attacks have taken place on the Indian consulate in San Francisco. Last month India’s National Investigation Agency (NIA) arrested Inderpal Singh Gaba, a British resident, for an attack on the Indian High Commission in London. Though the case falls under British jurisdiction, Gaba was arrested at New Delhi airport when he arrived in India from London on April 25, 2024. None of this has pleased Western governments. Washington has sharpened criticism of the Citizenship Amendment The US knows that the next 25 years will be dominated by China, America and India. With China irredeemably hostile to the US, Washington can’t afford to antagonise India beyond a point Photograph courtesy: PIB
20 | B W BUSINESSWORLD | 01 June 2024 ARTY-HOPPING Delhi socialites, boasting about how many “do’s” they went to in a single night, now have competition: party-hopping politicians. “Aaya Ram, Gaya Ram” has been a phrase in common use for such politicians for some decades. Despite the anti-defection law enacted many years ago, peripatetic politicians travel from one party to another as frequently as ChurchgateAndheri local trains, best exemplified by a nine-time chief minister who has changed parties five times! In this election season, politics, leaders, and candidates, are centre stage. Gone are the days when fiery political arguments would end with unanimous agreement that all politicians are self-serving and corrupt. Proponents now unrelentingly insist that their favoured party is incorruptible and pure as the driven snow; arguments run on parallel tracks without converging as they once did. Yet, very many voters are unhappy about the ease and remorselessness with which turncoat politicians switch parties. The problem, though, is voters, not politicians. The latter are expected to be as faithful to ideology and party as a traditional Hindu wife to her husband. This is an erroneous analogy on the part of voters. Instead, look P at politicians as corporate executives. There is no expectation that executives will stick to only one company throughout their career. Mobility is an almost essential part of managers’ upward trajectory, and inter-company movement is a well-accepted process. Low and mid-level executives move to better their prospects, lured by bigger pay-packets, a more important position, or a company with greater growth prospects. Swollen-ego senior managers, with an exaggerated sense of their capabilities, nurturing grudges about lack of recognition, are also amongst those most likely to look for a position elsewhere. Highflying top executives who lose hope of becoming the CEO, because the present one is firmly in the saddle and has the support of the Board, are also serious flight-risks. In all three cases, there are immediate analogies with the movement of politicians across parties. One can even think of specific names! Then, there is the CEO who fears that his company is losing the battle in the marketplace. He may unhesitatingly switch to a competing company and help it become the dominant player. An immediate political analogy is the example of the nine-time CM with five switches to his credit. Sometimes, a leader brings his full team to the new company. This has become an accepted practice: one which is not an uncommon occurrence, especially amongst the “Big 4” accounting firms. Now, politics in Maharashtra has emulated this corporate precedent! Interestingly, here too there is a Big 4, and two of them have seen large teams joining a third. Why is it that what is acceptable in the corporate arena – where the attributes of good governance, ethics, transparency, and trust are supposedly given great weight – should not be kosher for politics? All we need to do is to consider politics as one more sector of business. Looked at through this lens, there is little that is reprehensible in the much-pilloried “chameleon politician”: like any ambitious executive, s/he is navigating his/her way up the career chart, and this often requires a change in the company (party). Loyalty – to company (party) or purpose (ideology) – is a virtue of the past: companies and political parties value other traits, including the disruption a new entrant may cause in the earlier company/party. Political parties, it seems, are like corporates. After all, politics is (good) business! Peripatetic Politicians, Mobile Managers The author loves to think in tongue-in-cheek ways, with no maliciousness or offence intended. At other times, he is a public policy analyst and author. Among his books is Decisive Decade: India 2030 Gazelle or Hippo (Rupa, 2021) n KIRAN’S KONTRARIAN KORNER n By KIRAN K ARNIK Photograph by Foto Jagodka
22 | B W BUSINESSWORLD | 01 June 2024 RECENTLY SPENT a night at a friend’s farmhouse. And must confess I quite enjoyed the experience. The calm and the peace were a big change from the blaring horns of city traffic that seem to fill our lives. The air was clean, crisp. The star-filled night sky was a sight to behold. And the pleasure of waking up to the sound of ‘cock-a-doodle-do’ was something else. I was telling another friend about the experience – and I happened to also mention how the only sound one heard in the night was the croaking of frogs. And that’s when she asked if I had heard the story of the farmer and the frogs. I hadn’t. And when I heard the story, I thought it’s one you must hear too. The story goes that a farmer went into a nearby town and asked the owner of a restaurant if he’d like to buy a million frog legs. “A million?” asked the restaurant owner. “Where did you get so many?” The farmer explained that there was a pond near his house which had a million frogs which croaked non-stop all night. With all the noise they were making, the farmer said he was finding it impossible to sleep – and they were driving him nuts. The restaurant owner said he didn’t need so many frogs, but he could take maybe about five hundred frogs a week. The two struck a deal and it was agreed that the farmer would deliver 500 frogs every Sunday morning. The following Sunday, the farmer landed up at the restaurant with two frogs. “Where are the rest of the frogs?” asked the owner. “Well, I was wrong,” said the farmer, rather sheepishly. “There were only two frogs in the pond. But hey, they were making so much noise. Trust me, I could have sworn there were a million frogs!” Aha! Quite a story, no? If you think about it, a version of the million frogs story plays out in our lives at various times. The problems we encounter appear much, much larger in our head than they are in reality. Next time you spend a sleepless night worrying about a problem that seems insurmountable, maybe a good idea to do a reality check when you wake up the next morning. Usually, it’s just a couple of frogs causing the problem. It’s rarely a million frogs as you might have imagined. This also happens a lot in our relationships, and in our interactions with other people. When someone makes a mistake, we are quick to admonish them: “You are always doing it!” When we see someone who has not paid heed to what we said, we are convinced they just don’t listen – even though we’ve told them that ‘a million times’. Result? A minor flaw becomes an irritation – and grows into something we hate so much that it drives a wedge in the relationship. Friends, colleagues and your near and dear ones, they all deserve a second chance. A reality check. Maybe there are only two frogs after all. And one last thing. Next time someone gives you hard feedback, talks about how you are always getting it wrong and says something that hurts your self-confidence and your sense of self-worth, relax. Tell yourself it’s not about you. It’s about them. They just heard a million frogs croaking. The Farmer and the Frogs I PI TALKIES Prakash Iyer : The author is a speaker and leadership coach and former MD of Kimberly Clark Lever By PRAKASH IYER When we see someone who has not paid heed to what we said, we are convinced they just don’t listen – even though we’ve told them that ‘a million times’. Result? A minor flaw becomes an irritation – and grows into something we hate so much that it drives a wedge in the relationship. Friends, colleagues and your near and dear ones, they all deserve a second chance
24 | B W BUSINESSWORLD | 01 June 2024 join the dance – the private sector. Despite government efforts to entice private investment through tax breaks and streamlined regulations, their response has been underwhelming. However, this raises a critical question: can the government sustain this level of spending alone? The answer is a resounding ‘no’. While crucial for initial infrastructure, high public spending alone isn’t sustainable. A thriving private sector is vital for longterm growth, fostering innovation, job creation, and economic diversification. The government needs to do more, to attract private sector response. The Social Sector: Balancing Growth and Equity: While infrastructure garners attention, essential social sectors suffer neglect. Prioritising capital spending overlooks crucial areas like education, healthcare, and poverty alleviation. Achieving balance demands fiscal prudence, strategic resource allocation, and public-private partnerships. Robust education and healthcare are vital for societal progress, enhancing productivity. Inadequate healthcare access and educational disparities hinder economic growth and exacerbate inequality. Temporary measures like free grain distribution address immediate needs but underscore the need for sustainable solutions. Investment in education and skill development empowers individuals, breaking the poverty cycle and fostering economic contribution. Inflation is a Looming Threat: The spectre of inflation looms large, fuelled by rising food prices and external economic headwinds. India’s vast population, particularly its impoverished segments, necessitates a delicate balance to contain inflationary pressures while ensuring access to affordable essentials. Additionally, the sluggish growth in agriculture and allied sectors poses a significant challenge, exacerbated by unpredictable weather patterns and structural inefficiencies. Revitalising rural economies, enhancing agricultural prCOLUMN By Vikas Singh T HE INDIAN JUGGERNAUT appears unstoppable, with the nation proudly leading as the fastest-growing major economy. Projections indicate a remarkable 7.3 per cent GDP growth in 2023-24, surpassing previous estimates and outstripping major global economies. This achievement underscores India’s resilience and immense potential on the world stage. However, amidst the celebration of growth milestones, a closer look reveals a fascinating, and sometimes worrying, economic tightrope walk. Public Investment but a Hesitant Private Sector: Fuelling this impressive growth is a surge in capital formation, primarily driven by increased government investment. This translates to better infrastructure, potentially more jobs, and a brighter economic outlook. New roads snake across the vast landscape, connecting villages and towns. Modern ports hum with activity, facilitating trade and boosting exports. Thriving cities are witnessing a surge in airport capacity alongside the development of metro networks, fuelling multiple avenues for growth. The construction cranes that dot skylines are testaments to a nation on the move. Yet, a crucial partner seems hesitant to The author is an economist and columnist INDIA’S ECONOMIC TIGHTROPE: HIGH GROWTH, HIDDEN WOES
25 | B W BUSINESSWORLD | 01 June 2024 ing supply chain bottlenecks, bolstering technological capabilities, and fostering a culture of innovation are essential. A deep dive through high-frequency Indicators like the IIP, show nuanced positivity beyond headlines. Booming digital economy trends, such as UPI transactions and GST revenue, reflect a growing, tech-savvy populace – a potential springboard for future development. Charting a Path Forward: As India strides into the 2024 general elections, economic rejuvenation takes centre stage. The new government faces a pivotal task: balancing growth with tackling persistent issues. India’s ambitious vision for development hinges on balancing economic growth with social welfare through investments in education, healthcare, and safety nets. Bold policy changes can unlock India’s potential, while strong partnerships can drive innovation, investment, and growth. With a young population and abundant natural resources, India possesses a formidable engine for progress, propelled by education, skills, and responsible resource management. However, paramount is prioritising the well-being of its citizens, ensuring equitable development that extends the benefits of India’s growth to all. ductivity, and implementing robust risk mitigation strategies are indispensable to safeguard food security and bolster rural livelihoods. This can lead to social unrest and hinder economic growth. The RBI faces a delicate balance. Raising rates fights inflation but slows the economy; keeping them low can fuel inflation. A multi-pronged strategy, including supply chain strengthening and agricultural productivity, is essential. Navigating Global Uncertainties: India’s external sector presents a mixed bag. While the trade deficit has narrowed, driven by a sharper decline in imports than exports, this trend warrants caution. Import reductions in critical raw materials risk stifling industrial growth. Despite robust domestic consumption, India’s economic trajectory remains intertwined with global dynamics, necessitating adept navigation amid geopolitical tensions and trade disruptions. The global economic slowdown further dampens demand for Indian exports. Recent armed conflicts reverberate through India’s trade corridors, underscoring external sector vulnerability. Compounding this, declining foreign direct investment (FDI) reflects waning investor sentiment amidst global uncertainties. While India compares favourably with other developing nations, the diminishing FDI trend emphasises the need for proactive measures. Prioritising diplomatic engagements, fostering regional economic cooperation, and diversifying trade partners can enhance India’s resilience. Streamlining bureaucratic processes, ensuring policy continuity, and addressing sector-specific bottlenecks are imperative to reignite investor interest and bolster growth. A Sector with Promise: India’s projected 6.5 per cent growth in manufacturing for 2023-24 is a promising sign for its journey towards becoming a global manufacturing hub. While certain sectors exhibit promising growth trajectories, such as manufacturing and services, diversification remains imperative to mitigate sector-specific vulnerabilities. The resurgence of manufacturing, albeit uneven across subsectors, underscores India’s potential as a global manufacturing hub, equally the potential creates millions of jobs. However, to sustain momentum and unlock India’s full potential for job creation and sustained growth, addressPrioritising capital spending overlooks crucial areas like education, healthcare, and poverty alleviation. Achieving balance demands fiscal prudence, strategic resource allocation, and public-private partnerships Illustration by Vasilyeva
26 | B W BUSINESSWORLD | 01 June 2024 Gmmco Ltd: Pioneering India's Infrastructure, Energising the Nation's Growth Innovation is not about doing large, mindboggling things. It’s about doing small things better every single day, continuously improving performance and organisational efficiency. Paving the Path for India’s Infrastructure Renaissance Chandrashekhar V MD & CEO Fuelling Growth: A Remarkable Trajectory In India’s industrial landscape, few names resonate as powerfully as Gmmco Ltd. More than just a company, Gmmco represents a driving force propelling the nation’s infrastructure, mining, energy, and transportation sectors towards unprecedented heights. With a legacy of nearly five decades, this CK Gmmco’s journey is intrinsically intertwined with India’s nation-building efforts. Central to the company’s success is its exclusive partnership with Caterpillar, the global leader in machines and engines, spanning over 28 years. This partnership has allowed Gmmco to offer world-class products and services, setting new industry benchmarks. From constructing roads and bridges to erecting dams and irrigation projects, Gmmco’s equipment and solutions have been instrumental in realising India’s most ambitious infrastructure dreams. However, Gmmco’s impact extends far beyond equipment supply. The company’s comprehensive services encompass engineering, aftermarket support, rentals, financing, buyback, and trade-ins of heavy equipment, establishing it as a one-stop solution provider for its customers. Strategic partnerships with industry leaders like Schneider Electric and JLG further ensures Operating through independent verticals— Construction, resource, energy & transportation, and underground mining—each functioning as a profit centre forms the core of Gmmco’s strategic approach. This structure empowers the verticals to focus on their respective industries, fostering customer-centricity and tailored solutions. This strategic approach has yielded remarkable results: in the last four years alone, Gmmco has more than doubled its revenue. Now serving over 25,000 active customers and supporting more than 35,000 pieces of equipment, the company guarantees exceptional availability and service response times, significantly contributing to customer profitability. access to the latest technology and superior build quality, strengthening its competitive edge. Birla Group powerhouse has etched its mark as a trailblazer, epitomising innovation, customer-centricity, and an unwavering commitment to sustainability. Under the visionary leadership of Chandrashekar V, Managing Director and CEO, Gmmco has undergone a remarkable transformation, solidifying its position as an undisputed industry leader. Chandrashekar’s strategic acumen, coupled with a steadfast focus on empowering people and embracing cutting-edge technologies, has catalysed the company’s remarkable growth trajectory. mall oppor tunities are of ten the Sbeginning of great enterprises.� Every single drop in the ocean counts. When talking about a progress of a developed or developing countries worldwide, we can't undermine the signi�cant role of SMEs. Undoubtedly, small and medium sized enterprises have made an indelible landmark on the economic landscape due to their premeditated importance in reengineering the industrial sector. O wing to their signi�cant inputs and involvement, S M E s assumes a pivotal responsibility in socio-economic development of India. These industries account for 95 per cent industrial units, contributing up to 40 per cent of GDP and 45 per cent of total exports. They are the second largest employers of human resources after agriculture. The scope of this sector is vast as individuals with entrepreneurial spirit but limited resources always have before them the option of initiating a business plan at the grass root level. Small �rms are reactive comfortably and more quickly to the changes in the environment. They enthuse innovation and bring into lime light new products, new methods and new ideas. S m a l l B u s i n e s s i s t h e s e e d b e d o f entrepreneurship. It provides an easy path for the novel entrepreneurs who wish to try their skills and wisdom to start a new venture. They have their own advantages over larger businesses. They are substantial generators of employment, and can act as shock absorbers during a catastrophic situation, responding veritably to topsy-turvy in the market. With not a complicated hierarchy, decision making is e a s y a n d s i m p l e r a n d s o t h e m a r k e t expectations can be ful�lled. They cater to provide services and a wide range of products at a�ordable prices to the consumers. This contribution is despite the sector being exposed to intensi�ed competition since liberalization of Indian economy in 1991. Small industry in India has been confronted with an increasingly competitive environment due to: (1) liberalization of the investment regime in the 1990s, favoring foreign direct investment (FDI). ( 2 ) t h e fo r m a t i o n o f t h e Wo r l d Tr a d e Organization ( W TO) in 1995, forcing its member-countries (including India) to drastically scale down quantitative and nonquantitative restrictions on imports. (3) domestic economic reforms. The cumulative impact of all these developments is a remarkable transformation of the economic environment in which small industry operates, implying that the sector has no option but to 'compete or perish'. With the advent of planned economy from 1951 a n d t h e s u b s e q u e n t p o l i c i e s b y t h e Government of India, both planners and the law makers earmarked a special role for SMEs in the Indian economy. Due protection was accorded to both sectors, and particularly for small-scale industries from 1951 to 1991, till the nation adopted a polic y of liberalization and globalization. The development of small industries is instrumental in veering the direction of industrialization to rural areas. The fact that these industries are labour-intensive and utilize less capital triggers the countries employment and supply of manpower in the rural areas. They contribute towards a better utilization of local resources and skills which may otherwise remain unde�led and might have tarnished eventually because of lack of exposure. It is a means of preserving our culture by means of encouraging people engaged in the handicrafts and �ne arts. Apart from improving standards of living by increasing the per capita income, these units hereby, assist in equitable distribution of income among the people. The sector helps the country to alleviate the generic living conditions of the people by overcoming the stigma of poverty and SME Carving Out a New Economy “
27 | B W BUSINESSWORLD | 01 June 2024 Innovation: The Driving Force Sustainable Strides: Caring for the Environment The People Factor The Road Ahead: Embracing India’s Growth Story A commitment to innovation underpins Gmmco’s success and permeates every aspect of its operations. The company keeps a keen eye on emerging technologies, continually exploring ways to incorporate them into its offerings to better serve customers. “Innovation is not about doing large, mind-boggling things,” explains Chandrashekar, “It’s about doing small things better every single day, continuously improving performance and organisational efficiency in our sphere.” This philosophy has led to initiatives like floating a subsidiary, Gmmco Technology Services, which operates a joint venture with German company Hauhinco, employing over 85 design engineers. Additionally, the subsidiary offers comprehensive mining consultancy services, providing expertise in DPR, financial modeling, asset management, and more, further enhancing its value proposition. Gmmco’s digital transformation journey is another testament to its innovative spirit. More than 60% of its customers are active online, and 40% of its parts sales occur through digital channels. The company views digital not merely as an enabler but as a driver, leveraging data analytics to enhance customer experiences and profitability. Recognising the importance of environmental stewardship, Gmmco has taken significant strides towards sustainability. Gmmco serves as a consultant to its customers, recommending optimal solutions that enhance the overall energy efficiency of the projects compared to competitors. Gmmco’s Energy and Transportation vertical has also ventured into solar power projects, having installed over 30 megawatts of capacity, with plans for further expansion. The company has actively participated in lake-cleaning initiatives and has adopted a school in a remote village near Tumkur, rebuilding its infrastructure. At the heart of Gmmco’s success are its people– a team of highly committed, talented, and hardworking individuals united by a shared culture of trust, mutual respect, and entrepreneurial spirit. “Our people are our greatest asset,” affirms Chandrashekar. “We believe in developing leadership, attracting and retaining talent, and creating an environment where individuals are encouraged to take risks, make decisions, and grow.” Transparency, honesty, and humility are the cornerstones of Gmmco’s corporate culture. Leaders lead by example. This approach fosters a vibrant and collaborative environment where everyone works together as a large family, focused on a common goal: growing the organisation profitably while serving customers with honesty and integrity. “We rise or fall as a team,” says Chandrashekar. “Leadership is not about power or position; it’s about taking responsibility and giving our 100% every day.” As India continues its rapid ascent, Gmmco stands ready to embrace the opportunities ahead. With the country’s coal production expected to double by 2030 and infrastructure, power, and data usage set to soar, the company’s offerings will play a critical role in enabling this growth. “It’s going to be India’s century,” says Chandrashekar. “ Our focus remains on serving our customers, providing tailored solutions, and keeping up with new technologies. We will continue to leverage digital as a driver, offer fuel-efficient equipment, and contribute to sustainable practices.” Gmmco’s unwavering commitment to customer-centricity, innovation, and sustainability, coupled with its robust partnerships and a culture that fosters leadership and talent, position it as a respected and integral part of India’s growth story. As the nation embarks on an ambitious journey towards progress, Gmmco stands tall, laying the foundation for a brighter, more sustainable, and prosperous future. unemployment. One of the chief thrusts of SMEs is to regulate and provide a platform to the vulnerable groups of the society as the main drivers and empower the women and the youth to start their enterprises. Small enterprise promotion has continued to remain an important and integral part of Indian development strategy well before the First FiveYear Plan. However, the sec tors faces unforeseen challenges. Some of the most persisting constraints facing the sector, dominated by smaller units in the informal sector, include poor or non-availability of loan �nance, low levels of technology, inadequate physical and economic infrastructure and resources to invest in quality search and adopt new technology, and a policy of product reservation for small scale industries. Poor monitoring of implementation and e�ect of various small �rm policies has been an issue of concern. The larger enterprises o�er a sti� competition to the small scale units in the sale of output. Ap a r t f r o m t h e s e m a j o r impediments, the sector faces a number of other problems like ine�cient management, non-availability of cheap power, burden of local taxes, shortage of working capital and lack of demand for the products. The list is endless. SMEs have emerged as a vibrant tier of the economy as they have already taken over as key contributors to country's GDP. The new shout out is the Make in India Campaign. Owing to the launch of �agship Make In India Campaign, Prime Minister Narender Modi has given way to a new national program designed to facilitate investment, cultivate innovation , augment pro�ciency in skill development, protect intellectual property and build Best-in-Class manufacturing infrastructure, there has never been a better time to make in India. India's small and medium-sized industries can play a big role in making the country take the next big leap in manufacturing. India should be more focused towards novelty and innovation for these sectors. The government has to chart out plans to give special sops and privileges to these sectors. As clearly seen, the hindsight and the future vision of SME's cannot be simply considered a smaller version of their larger counterparts as they have di�erent managerial styles, scale of operations, levels of independence and decision making characteristics. However these di�erences do not eliminate the opportunities of SME's to internationalize and gain �ight in the global market. SME sector development will continue to spread its wings and be an integral part of the development thrust and promote the entrepreneurial culture.
28 | B W BUSINESSWORLD | 01 June 2024 N THE EVOLVING landscape of global power dynamics, a fundamental transformation is underway, transitioning from traditional military dominion to the nuanced supremacy of technological prowess. This shift underlines the pivotal role of digital sovereignty as nations across the globe strive to fortify their informational and economic spheres against external intrusions and manipulations. This article explores the stark technological divergences between the global powers, digs into the nuanced geopolitics of sanctions, and uncovers the emerging forms of conflict that are redefining the paradigms of international relations. China’s meteoric rise as a global technological powerhouse is a testament to its strategic foresight and substantial investment in the sector. The ‘Made in China 2025’ initiative highlights this approach, aiming to position China at the forefront of global technological innovation, particularly in the semiconductor industry. A notable manifestation of this ambition is Huawei’s leadership in 5G technology development, which not only signifies China’s quest for technological dominance but also its potential to reshape global telecommunications infrastructures and standards. In contrast, Russia’s technological landscape presents a different picture. Despite possessing advanced military technologies, Russia’s engagement in the commercial technology sector, especially in semiconductor production, remains limited. This strategic focus reflects a prioritisation of defensive cyber capabilities and stringent information control within its own borders, illustrating a distinct approach to harnessing technology for geopolitical leverage. SEMICONDUCTORS TO INFORMATION WARFARE: The Comprehensive Reshaping of Global Dynamics The international community’s nuanced response to the technological ambitions of China and Russia highlights the complexities inherent in modern geopolitics. The readiness to impose sanctions on Russia, juxtaposed with the cautious approach towards China, emphasises the delicate balance of economic interdependencies and strategic interests. The involvement of international bodies, such as the United Nations and the World Trade Organization, in mediating trade tensions and technology-related disputes further emphasises the intricate web of global supply chain relationships and the pressing need for diplomatic agility in technology diplomacy. The concept of hybrid warfare marks a significant evolution in geopolitical strategies, blending conventional military tactics with sophisticated cyber operations. This strategic innovation reflects a broader shift towards utilising technological interference as a means of achieving geopolitical objectives, with notable examples including the United ARTHSASTRA By Jae Yu & Amit Kapoor Clockwise from left : Amit Kapoor & Jae Yu I
29 | B W BUSINESSWORLD | 01 June 2024 States’ concerns over technological espionage and the global debate surrounding the security implications of foreign technology platforms like TikTok. The transformation in the nature of conflict, with an increasing reliance on drones, autonomous weapons systems, and information warfare, signifies a departure from traditional forms of warfare. The ethical, regulatory, and strategic challenges posed by these advancements, especially in the context of artificial intelligence’s role in military applications, stress the critical importance of technological superiority in contemporary global power dynamics. The competition for narrative control has emerged as a central battleground in international relations. The strategic use of information to influence public opinion and political outcomes has highlighted the power of media and technology platforms in shaping global perceptions. The advent of advanced technologies, such as social media and deepfakes, introduces new vulnerabilities in the fight against misinformation, emphasising the need for robust mechanisms to protect the integrity of digital discourse. The semiconductor industry stands at the heart of the technological and geopolitical shifts reshaping the global order. Its strategic significance extends beyond economic metrics, encompassing the very essence of military and technological dominance. The vulnerabilities exposed by the Covid -19 pandemic have catalysed a global re-evaluation of semiconductor supply chains, sparking initiatives aimed at achieving technological self-reliance and securing a competitive edge in the future technological landscape. The democratisation of technology presents an unprecedented opportunity for smaller nations to exert influence on the global stage, challenging the traditional metrics of power. The emergence of international collaborations and alliances, exemplified by the technological partnerships within the QUAD, highlights a collective effort to establish technological standards and counteract the dominance of major powers. The relentless march towards technological supremacy as the primary determinant of global power dynamics is irrefutable. As nations navigate this intricate landscape, the balance of power will increasingly hinge on the adept mastery of technological innovation and the strategic manipulation of information. Looking ahead, the dawn of quantum computing, space technology, and other emerging trends promises to further revolutionise the strategies and alliances that define international relations, heralding a new era of geopolitical competition and cooperation. Photograph by Dmitryvbel.rambler.ru Amit Kapoor is Chair, Institute for Competitiveness and lecturer, USATMC, Stanford. JaeYu is a student at GSB, Stanford and Dr Kapoor’s student in his course on Competitiveness and Innovation The concept of hybrid warfare marks a significant evolution in geopolitical strategies, blending conventional military tactics with sophisticated cyber operations
30 | B W BUSINESSWORLD | 01 June 2024 INCE THE PAST few years, more and more senior management professionals have taken the entrepreneurial plunge. Observing many of them, offers success lessons. But then, there is an interesting failure caution from these too. The powerful hubris of the professional-turned-entrepreneur, aping a larger family business promoter’s lifestyle is a path to self - destruction. Many of these new-promoters start to believe they can do no wrong. After all, many of them have had successful careers of over 20-40 years. It starts to hurt their governance, as they believe they know it all, and need board members and advisors only for optics, and to attract investors. They are happy with nepotism, bestowing favours as lord-master. They become immune to feedback. This misguided emulation not only erodes governance but also perpetuates nepotism and fosters a deaf ear to constructive criticism. They also think that all of their personal lifestyle can be funded at their new company’s cost, and is like the literal sweat-equity, and hence financial governance takes a pause. It’s a prevalent mistake among successful professionals turned entrepreneurs, driven by an insatiable ambition for big-company status at any cost. Their rush to indulge in a fantasy lifestyle akin to well established promoters occurs without requisite financial stability, setting the stage for compromised decision-making and ethical lapses. Excessive displays of wealth, from lavish cars to extravagant residences, to foreign travel with family to regular social-dos, all at company’s expense, not only attract negative attention but also blur the lines of propriety. This unchecked behaviour breeds a dangerous belief in invincibility, undermining the very essence of independent oversight and corporate governance. In promoter-controlled entities, governance concerns pivot around two pivotal hypotheses. Firstly, there’s the presumption that promoters, driven by vested interests, are inherently motivated to safeguard and augment wealth. This assumption underscores the expectation that promoters act as stalwart guardians of shareholder value, prioritising long-term sustainability over shortterm gains. Secondly, there’s a false S Entrepreneurship: The ‘I Have Arrived’ Pitfall (A)muse & Musings By Srinath Sridharan Photograph by Dazdraperma
31 | B W BUSINESSWORLD | 01 June 2024 in the balance. In addition, it’s crucial to recognise that the demeanour and conduct of these new-promoters are closely scrutinised by investors. The lavish lifestyle and arrogant behaviour exhibited by professionals turned entrepreneurs attempting to emulate established promoters can significantly impact investor perception. Investors, particularly institutional and ethical investors, are increasingly attuned to the ethical and moral fibre of the leadership team. Any deviation from expected standards of integrity and governance can trigger red flags and prompt investors to reconsider their investment decisions. In recent years, we have witnessed numerous high-profile scandals and corporate collapses stemming from unchecked hubris and lax governance within promoter-controlled entities. There have been many instances where the unchecked ambitions of the promoter led to financial mismanagement, investor distrust, and ultimately, the downfall of once-thriving companies. Such instances not only inflict immediate financial losses but also erode public trust in the corporate sector and undermine confidence in the broader economy. They serve as stark reminders of the far-reaching consequences of prioritising personal gain over ethical conduct and responsible stewardship. Moreover, the societal repercussions of corporate malpractice cannot be overstated. Beyond the boardroom, these lapses in governance can have profound implications for employees, customers, and communities at large. From job losses to trust deficit, the fallout from corporate mismanagement reverberates far and wide, underscoring the urgent need for a shift towards values-based business practices. For prospective board members, caution is paramount. While these newly minted promoters may hail from organisations with robust governance frameworks, their transition necessitates a thorough assessment of alignment with values and behavioural consistency within the new entity. Only by embedding such processes can the integrity of the organisation be safeguarded against the pitfalls of unchecked ambition and hubris. The ‘I have arrived’ pitfall can ultimately derail promising ventures as it blinds new entrepreneurs, despite their years of industry experience and worldly knowledge, to the need for continuous learning, adaptation, and humility in the face of uncertainty. Established promoters with a long history or familial lineage often benefit from wealth accumulated and shielded through diverse financial and tax mechanisms. Contrastingly, newly minted promoters, devoid of such historical safeguards, stand to risk not only their careers and reputations but also potential wealth creation notion that promoters possess an unparalleled understanding of the complexities of the business landscape. This perceived expertise often leads to the sidelining of independent directors in strategic and financial decision-making processes. While promoters may indeed possess invaluable insights gleaned from their intimate involvement in the business, the exclusion of independent voices can lead to groupthink and a lack of critical oversight. Thus, striking a balance between leveraging the promoter’s expertise and harnessing the diverse perspectives of independent directors is important for fostering robust governance practices and ensuring sustained organisational success. Professionals transitioning into the role of promoters face heightened scrutiny. Established promoters with a long history or familial lineage often benefit from wealth accumulated and shielded through diverse financial and tax mechanisms. Contrastingly, newly minted promoters, devoid of such historical safeguards, stand to risk not only their careers and reputations but also potential wealth creation. Without stringent financial and governance controls in place, these emerging promoters are acutely vulnerable to the ramifications of missteps and lapses in ethical conduct. Hence, the need for new-age promoters to adhere to rigorous financial and governance protocols cannot be overstated, as their personal and professional futures hang The author is a policy researcher & corporate advisor Photograph by Prettyvectors
32 | B W BUSINESSWORLD | 01 June 2024 URING THE LAST few years, India has become envy of the world for the rate at which our startups have been emerging and how several of them have gone on to become successful large companies with stratospheric valuations. This has earned us huge acclaim and some of these companies are included amongst the top technology companies now. This is wonderful and something for all of us to be proud of. Let me however, mention here that ‘entrepreneurship’ is in our genes and we have hundreds of stories – some going back to the 19th Century – of people who rose, in many cases, from modest backgrounds and set up pioneering businesses by sheer grit, determination and fire-in-thebelly to build indigenous factories and businesses against all odds because our British rulers were actually against the very concept and in fact, they were systematically demolishing even existing enterprises. The Tatas and Birlas are, of course, glorious tales of ingenuity and success but there are many more. Let’s also not forget that raising funds, even till the first decade of the current century, was infinitely more difficult than it is today. The hurdles were much greater when some of them started businesses before independence. The Real Startups of India UNIFI Capital has brought out a beautiful desk calendar/planner for 2024, aptly titled The Real Startups of India. In this unique publication, they have profiled 52 fascinating stories – one for each week – which deserve to be circulated widely. I had actually requested UNIFI for a soft copy of the 52 pages but they were not able to help. This collection is truly valuable, sharing details of some of the forgotten early entrepreneurs. I am sure there are many more names too, but the 52 stories are all eminently readable and deserve to be cherished. Several leading conglomerates in the country have eponymous names that perpetuate the memory of the founders mostly by their surname. Some fine examples are Kirloskar, Godrej, Shriram, Bajaj, Mahindra, Modi, Murugappa, Singhania, Thapar, Oberoi, T. V. S., Pai etc. Even the famous engineering juggernaut Larsen & Toubro (L & T) is named after the founders Henning Holck-Larsen and Soren Christian Toubro! I am tempted to mention an anecdote here about how the origin of this great company was inspired by Mahatma Gandhi. On arrival in India, in 1934, young Danish engineer Toubro, working for F.L. Smidth & Co. happened to read Gandhiji’s quote in the Bombay Chronicle saying something to the effect that ‘he was not leading a movement to substitute white D INDOMITABLE SPIRITS By Krishan Kalra Column Celebrating The Early Day Entrepreneurs
33 | B W BUSINESSWORLD | 01 June 2024 old established companies like Birla’s Texmaco and National Machine Manufacturers (later Mafatlal Engineering). They collaborated with the Swiss leader Rieter, sent hundreds of their engineers and workers for training to Switzerland before even the factory construction was complete, brought Swiss instructors to train their workforce, invested heavily in R&D and today they are one among the three in the world to produce the entire range of spinning machinery. This, despite the fact that when several global players flooded the Indian market in the mid-nineties Rieter ended their association and sold all their shares to LMW. v R.P. Goenka group (established in 1951). wRaunaq Singh (born 1922) started life by selling second hand steel pipes in Lahore. impoverished during the partition in 1947, he sold spices in Calcutta, coincidentally met a German steel tube manufacturer, managed their plant in Calcutta and soon set up his own Bharat Steel Tubes factory colonial masters with brown ones’. He was inspired by this and felt that anyone with modern technology and management skills would thrive in such an India. Serendipitously, his classmate Larsen, also working for F.L. Smidth, also arrived in 1935 and they formed L&T; the rest, as they say, is history! Then, there are other thriving industrial groups that keep the legacy of the founders alive. Most have done exceedingly well even though pitted against very formidable competitors. Let me mention just a few. The Pioneers u Coimbatore based Lakshmi Machine Works (founded in 1962 by Dr G.K. Devarajulu) started in the face of Brijmohan Munjal B.M. Khaitan Lala Sri Ram R.P. Goenka Karsan Bhai Patel Burman Family Y. K. Hameid T. V. Sundaram Iyengar S. K.Bangur Photographs by Ritesh Sharma, Subhabrata Das, The Sriram Group, BW archive, GCMMF (Amul), TVS Group Verghese Kurien Vikram Lal
34 | B W BUSINESSWORLD | 01 June 2024 INDOMITABLE SPIRITS By Krishan Kalra Column at Ganaur Haryana around 1959, went on an aggressive expansion drive and today his son Onkar heads one of the biggest Indian multinational tyre companies – Apollo. xFaquir Chand Kohli – known as the Father of the Indian Software Industry – joined Tata Electric in 1951 after getting a degree in electrical engineering from MIT, rose to be a director and was then made head of Tata Consultancy Services (TCS). Under his charge TCS emerged as the pioneer of India’s IT revolution. He made a famous statement in 1975: “India might have missed participating in the industrial revolution but is not going to make that mistake with the boom of information technology”. yBrijmohan Lall Munjal, born 1923 in Kamalia, Punjab (now in Pakistan) settled down in Ludhiana in the mid1940s. His family got an industrial licence in 1956 to manufacture bicycles – at that time the market was mostly dependent on imported bicycles like Phillips, BSA, Raleigh etc. and today his Hero group is the top manufacturer of cycles, scooters, motorcycles and several other items. zThe Amalgamations Group (founded 1941) is another amazing tale of the intellect and foresight of Anantharamakrishnan. He joined the British owned Simpsons group in Madras as secretary and rose to be its first Indian director. Simpsons became a public company and was transformed into the Amalgamations Group that would later convert Chennai into the ‘Detroit of India’. Forgotten Heroes There are many other illustrious individuals, with outstanding success stories, like T. V. Sundaram Iyengar, Walchand Hirachand, Mohan Advani, S. K. Bangur, Ramaswamy Raja, Champaklal Choksey, Balvant Parekh, Our early entrepreneurs – many coming from poor families – were truly brave; not only did they go through extremely trying times that entrepreneurs have to always, they also fought the British rulers who hated their guts and disliked the fact that any of their ‘subjects’ should rise and see eye-to-eye with them. In a way these were all rebels who wanted to defy the masters and try to be their equals! Vikram Lal, Karsan Bhai Patel, Varghese Kurian, Ramnath Goenka, K. S. Naraynan, Rajnikant Shroff, H. T. Parekh, Dr Hameid, Brij Mohan Khaitan, B. V. Rao, Narendra Patni, M. A. Chidambram, K.M. Mammen Mapilai, Chauhans, Dr Anji Reddy and the Burmans. Some came from affluent families, others from humble beginnings but the common thread was the foresight, determination, hard work and never-say-die philosophy – common traits of entrepreneurs anywhere in the world – that existed in India long before the current gutsy crop of young boys and girls, or even the spectacularly gifted individuals like Premji, Narayanamurthy and his co-founders or Shiv Nadar and others. I also found three names in this wonderful compilation and one not listed there, whom India seems to have generally forgotten (apologies for my ignorance, if I am wrong). Photograph by WHPics
35 | B W BUSINESSWORLD | 01 June 2024 neurs have to always, they also fought the British rulers who hated their guts and disliked the fact that any of their ‘subjects’ should rise and see eye-to-eye with them. In a way these were all rebels who wanted to defy the masters and try to be their equals! They were hungry to do something other than what was bestowed on them by the grace of the gora collector or governor or the viceroy. I am reminded of a special favour bestowed by the Brits – designating an Indian as kursinasheen, who had the privilege of sitting down before a British officer; everyone else was supposed to keep standing. There were also titles like Rai Sahib and Rai Bahadur (or Sardar Sahib/Bahadur, Khan Sahib/ Bahadur depending on the beneficiary’s religion. Also OBE, CBE etc., the ultimate was of course, to be knighted and be addressed as ‘Sir’! Most of these titles were awarded at the sole discretion/ pleasure of the Gora Sahibs for services rendered to the crown and mostly not for their business acumen. Some exceptional Indians also got selected, usually on merit, for the elite Indian Civil Service (ICS) or got commission in the defence forces. I am all praise for our brilliant young boys and girls for the amazing work they are doing but, I think, we should also not forget to celebrate the lives and legacy of our early brave entrepreneurs. Disclaimer: The names mentioned above are at random and not in any rank order. I also apologise for any omissions The author is past president of AIMA and past BOG member of IIMC u Govindram Sakseria (1888 – 1946) who didn’t know a word of the English language, yet became a member of the New York Cotton Exchange – and later joined the international Copper, Sugar and Wheat Exchanges too. v Khilachand Devchand (1855- 1929) who started life as an ordinary worker at a village shop; soon joined big league traders like Khatau and Sassoon and later funded the famed Walchand Hirachand and became their partner. w Odhavji Raghavji Patel (1925- 2012) who gave the world Ajanta Clocks and x Seth Sir Hukum Chand of Indore who was revered in the jute trade and famously quoted in international jute exchanges as “Aaj ka bhav yeh se, kal ka batavega Seth Hukum Chand” (this is the rate today, tomorrow’s rate will come to us from Seth Hukum Chand). Our early entrepreneurs – many coming from poor families – were truly brave; not only did they go through extremely trying times that entreprePhotograph by XYZ Fotos
36 | B W BUSINESSWORLD | 01 June 2024 MARKETING AND ADVERTISING As the world’s l a r g e s t democ - racy goes through its 18th general (Lok Sabha) elections in 2024, political advertising in India has undergone a metamorphosis, going beyond print ads to comprehensive 360-degree campaigns, orchestrated by creative agencies. What has emerged in these elections is a willingness to stoop to personal attacks, mockery, and ridicule in order to demolish opponents, putting aside substantive policy debates and vision-casting. The current cycle has witnessed an escalation in personal attacks as parties vie for attention and online virality. “I think that issue has become truly quite serious now,” says Lloyd Mathias, Business Strategist and Independent Director. “It largely happens because of social media. It’s very easy for social media handles of political parties to take potshots at each other.” Harish Bijoor, Brand Guru & Founder, Harish Bijoor Consults Inc says, “Political campaigns are very competitive in their stances. The reality of the political party and its real agenda tends to get lost, so promises seem to lead advertising today.” IN DEPTH From mocking memes to personal jibes, political campaigns resort to all sorts of tricks in race for virality in the 2024 Lok Sabha elections By Reema Bhaduri Race for Attention Digital platforms have turbocharged the spread of mockery by allowing unfiltered attacks to be amplified far and wide to millions with a single click. Says Karthi Marshan, Communicator, Marketer, Learner: “We live in the entertainment era. News also has to masquerade as entertainment to get our attention. We also live in times of diminished attention spans, so anything that appeals to our base instincts is likely to cut through. And seeing others in a bad light tops the list.” He argues that mockery and lampooning of opponents is an easy tactic. Pragmatic Calculation The new trend of mockery and personal attacks in political campaigns fuels a cycle of retaliation. Moreover, the constant barrage of bitThin Line Between Message & Mockery
37 | B W BUSINESSWORLD | 01 June 2024 ter rhetoric deepens social divisions along partisan, religious, caste and regional lines, undermining national unity. BJP’s ‘dulha’ ad campaign is a prime example of objectionable campaign material. The ad equates the prime ministerial ambitions of opposition leaders to rivalries between prospective grooms, reducing a complex political dynamic to a crass analogy. Talking about the ‘dulha’ campaign, Mathias observes, “I think it’s an interesting route the party chose to make a point about the cross-fighting in the opposition. A lot of people found it very funny and an interesting way to make a sharp point about disunity, albeit some may find it offensive.” However, he notes, “In today’s digital world, where memes and short format videos prevail, I think it’s a fairly acceptable technique.” The Meme Game The opposition is hardly innocent either. There are social media memes depicting BJP leaders as corrupt autocrats aiming to undermine democracy. While memes are common in today’s digitally-charged campaigning, attacks like the ‘Fakir’ meme mocking PM Modi’s beginnings, went too far. On the issue of mocking opponents in modern political advertising, Marshan adopts a critical stance, questioning its strategic merit. “Personally, I am not a fan of humiliating opponents in the public eye. I believe it’s strategically wrong to do so, because a discerning audience is unlikely to think very highly of the mocker either. Having said that, everyone in play hides behind the old saw of all being fair in love and war, so who am I going to persuade otherwise?” he asks, urging for a return to principled engagement. Bijoor, however, is unequivocal in his condemnation of such mudslinging. “Mocking opponents has absolutely no place in modern political advertising,” he says. On the trend of memes, he notes, “Memes tend to be very common with the emergence of digital media and right in your face you have campaigns which are contentious. Most of these campaigns move away from policy issues.” Political Advertising Political campaigning has always involved persuasion through various mediums - from stump speeches and pamphlets to radio and TV ads. But the digital age has ushered a profound impact. Mathias, reflects on this evolution, emphasising, “Political advertising has matured significantly, with parties now collaborating closely with creative agencies to craft compelling narratives across various media channels.” He credits the BJP for leading the way in streamlining political communication, setting a precedent for other parties to follow suit. For the 2024 Lok Sabha elections, BJP has chosen McCann Worldgroup and Scarecrow M&C Saatchi for creative advertising, with Madison Media overseeing media planning and buying. Meanwhile, the Congress party has enlisted Niksun, Silver Push, and Design Boxed for media, outdoor and social media campaigns, recently adding Percept to their team. Marshan underscores the importance of prioritising policy issues over personal attacks or mockery, lamenting the decline in political integrity, reminiscing about a bygone era where principles trumped partisanship. As Bijoor observes, “There will come a time when people as voters will stand up and say, ‘I do not believe the credibility of a political party that mocks leaders of another.’ And in the bargain, down goes their vote.” [email protected] “We also live in times of diminished attention spans, so anything that appeals to our base instincts is likely to cut through. And seeing others in a bad light tops the list” KARTHI MARSHAN, Communicator, Marketer, Learner “Mocking opponents has absolutely no place in modern political advertising” HARISH BIJOOR, Brand Guru & Founder, Harish Bijoor Consults Inc “Political advertising has matured significantly, with parties now collaborating closely with creative agencies to craft compelling narratives across various media channels” LLOYD MATHIAS, Business Strategist and Independent Director
GROWTH begets growth. As India’s economic growth ac - celerates, it is lending impetus to the various key and allied sectors of the economy. A notable beneficiary has been the construction equipment (CE) industry, which soared to new heights in FY24 with an impressive 26 per cent surge. Remarkably, this high growth momentum is expected to continue in FY25 and beyond because of the robust pipeline of various infrastructure projects, both currently underway and the new ones slated to hit the ground in the second half of the current fiscal. For the fiscal year ended March 31, Riding on the government’s infra-led growth agenda, the Indian construction equipment industry has surpassed all projections, and although challenges remain, the growth momentum is expected to continue By Ashish Sinha CONSTRUCTING GROWTH 2024, the CE industry sales skyrocketed to 135,650 units, eclipsing the previous fiscal year’s tally of 107,779 units. In fact, even during FY22, sales had grown a 24 per cent over the previous year. According to the annual report by the Indian Construction Equipment Manufacturers Association (ICEMA), the CE industry’s impressive growth in FY23 is largely attributed to the government’s infra-led growth agenda and pre-election stimulus, catalysing projects across all major construction equipment segments. The sector’s stellar performance is underscored by a surge in both domestic and export markets, with a 24 per cent and 49 per cent increase, respectively. EarthmovIN DEPTH CONSTRUCTION 38 | B W BUSINESSWORLD | 01 June 2024
ing equipment sales, constituting three-fourths of total CE sales, surged 21 per cent, while material handling and concrete equipment witnessed robust growth, showcasing the industry’s robust momentum. Says Deepak Shetty, CEO and MD, JCB India, a major player in the branded, organised construction equipment manufacturers: “The government’s sustained focus on infrastructure development and increased budget allocation has been instrumental in this phase of growth.” Shetty points to the recent projections by ICEMA, adding, “The next 3-5 years will be an exciting phase for the construction equipment industry. As per ICEMA reports, India is poised to become the number two market in the world for construction equipment by 2030. This will be against the backdrop of extensive investments in infrastructure development which are critical towards making India a manufacturing destination for the world.” Another industry player, Deepak 01 June 2024 | B W BUSINESSWORLD | 39
40 | B W BUSINESSWORLD | 01 June 2024 Garg, MD, Sany India, says that the CE industry is likely to witness over $4.5 billion worth of investments in the next 5-7 years, as demand arising out of infrastructure projects touches a new high. “Looking ahead to 2030, our vision is to establish ourselves as a leading force in the Indian construction equipment market. To achieve this, we plan to strengthen our sales, expand our market reach, and augment our dealership network nationwide,” Garg adds. Outlook FY25 & Challenges India Ratings and Research (Ind-Ra) has maintained a neutral outlook on the construction sector for FY25. “The neutral sector outlook is backed by an expectation of 10-12 per cent year-overcapex and continued growth in state spending are likely to partially offset the lower central spend. That being said, the revenue growth in the past two years has exceeded Ind-Ra’s expectations, with the FY24 revenue growth likely to have been 17-18 per cent. The on-ground growth in the overall construction business can be gauged from the growth of reputed construction and engineering players. Take, for example, Patel Engineering, the fastest-growing engineering company in the hydropower space. “As the company strategically bids for major projects, its order book, which stood at Rs 19,134 crore as of December 2023, is steadily expanding, expected to reach around Rs 25,000 crore by the end of FY25,” Rupen Patel, Chairman and Managing Director, Patel Engineering told BW Businessworld recently. Agree experts. The sub-sectors of civil construction, power (especially transmission & distribution), water and metro are likely to lead the revenue growth in FY25 in the overall construction sector, analysis by Ind-Ra stated. However, the growth in the roads and railways sector could be sluggish, it added. And the proof is just in from an analysis by credit ratings agency CareEdge. As per its latest report, from 34 km per day in FY24, the pace of national highway construction is expected to slow to 31 km per day in FY25. CareEdge Ratings expects the execution pace to decline by 7-10 per cent y-o-y — from 12,350 km in FY24 to about 11,500 km in FY25. Construction Equipment Industry On a Roll 26%jump in sales for Indian CE industry in FY24 21% jump in sales of earthmoving equipment 61%rise in material handling equipment sales 19% jump in concrete equipment sales year (yoy) revenue growth in FY25. Order inflows are likely to pick up in 2H FY25, led by supportive government budgets along with expectation of acceleration of private sector’s capex,” says Krishan Binani, Director, Corporate Ratings, Ind-Ra. Despite the continued focus on capex by the central government and likely rebound in state and private spending, Ind-Ra expects the engineering, procurement and construction (EPC) sector’s pace of order execution to moderate in FY25, given the elections in 1QFY25. After the 30 per cent CAGR growth over FY20-FY24, the centre’s own capex is projected to grow at 17 per cent in FY25, following the trend of lower spends in an election year. Acceleration in sector-specific private sector IN DEPTH CONSTRUCTION
01 June 2024 | B W BUSINESSWORLD | 41 CHAMPIONING LOCALISATION DEEPAK GARG, Managing Director, Sany India and South Asia talks to ASHISH SINHA about the importance of going local and much more. Excerpts tentially hampering infrastructure and capital expenditure growth. According to Rajashree Murkute, a senior director at CareEdge Ratings, the guidelines present challenges for both ongoing and operational infrastructure endeavours. The requirement of a mandatory tail-period accounting for 15 per cent of a project’s economic life is highlighted as particularly impactful. This could hinder infrastructure projects’ ability to secure additional top-up loans, potentially necessitating an 8-10 per cent increase in equity requirements for hybrid annuity model-based road projects. These adjustments aim to align loan tenure with 85 per cent of the project’s economic life for concessions lasting 15 years. Nuanced challenges aside, overall, the construction equipment manufacturers foresee continued high-growth trajectory in the coming year riding on the mega-infra projects all across India. [email protected] The Reserve Bank of India’s new draft guidelines on project financing have raised concerns over struggling construction firms, particularly underconstruction infrastructure projects. According to analysts, the proposed guidelines are a pre-emptive measure by the RBI to prevent large defaults on infrastructure loans, especially considering recent increases in infrastructure spending. However, some analysts and market participants have expressed concerns that these regulations could tighten funding for project finance, poOn your success mantra and vision going ahead Sany India has achieved remarkable growth, playing a vital role in India’s infrastructure development since its inception. Our commitment to localisation is evident through the establishment of a state-of-the-art manufacturing facility in Pune, intending to increase localisation rates from 40 per cent to 75 per cent within 3-5 years. With over 30,000 machines delivered nationwide and a robust network of 42 dealers and 260+ touchpoints, we have secured leadership positions in critical segments such as cranes, piling rigs, and excavators. We envision ourself as ‘Naye Bharat Ka Nirmata’, a key partner in India’s development journey prioritising customer satisfaction, promoting local manufacturing and driving innovation and sustainability. On investments in R&D Our commitment to Indian market is evident through our substantial investment of over Rs 1,000 crore in R&D and manufacturing capabilities. Our cutting-edge facility in Chakan, Pune, allows for local production of various construction equipment models, resulting in faster delivery times, better responsiveness to market demands, and cost efficiencies. We remain dedicated to investment and growth, aligning with the “Make in India” initiative to expand domestic manufacturing and foster a self-sufficient ecosystem like localisation of electric dump truck SKT105E. On the rise of electrification, green & sustainable mobility solution in CE industry Recognising the potential of electric vehicles (EV), we innovate across sectors, offering a wide range of electric equipment, from excavators to material handling machinery. At Excon 2023, we unveiled a range of electric equipments like wheel loader - SW956, SY870E in excavator segment & SRSC45E3 in reach stacker segment, to name a few. Sany India’s dedication to electrification and green mobility underscores our commitment to a cleaner, more sustainable future for India. [email protected]
42 | B W BUSINESSWORLD | 01 June 2024 Can you share with us the growth trajectory of JCB India over the past three years? What key factors have contributed to this growth? JCB India has experienced growth through the launch of new products, enhancing our dealer network and continuing to have a customer-centric approach. Our commitment to delivering high-quality products and prioritising customer satisfaction has been pivotal in driving this progress. With exports to over 130 countries, JCB maintains a consistent One Global Quality standard, earning trust and recognition globally. Moreover, our Pune Design Centre, housing over 700 engineers, plays a crucial role in driving innovation across domestic and global projects. This continuous emphasis on technological advancement ensures that we stay at the forefront of delivering cutting-edge solutions to our customers. JCB India has witnessed growth both in volume and value. What are the factors driving this growth and how have they evolved over the years? The year 2023 was the strongest for JCB India ever since it started its operations in 1979. Several factors have contributed to this trajectory and have evolved over the years. The Indian economy’s recovery after Covid-19 played a crucial role in driving demand for construction equipment. As economic activities rebounded, there was a noticeable uptick in infrastructure projects, further fuelling our growth. Even during the pandemic, our investments in innovation continued. We launched the industry’s first dual-fuel CNG Backhoe Loader in 2020 and later introduced the PNG Genset and India’s first Electric Mini Excavator at Excon 2021. Looking ahead, we plan to capitalise on emerging opportunities and further accelerate our growth trajectory. This includes expanding our product portfolio and further strengthening our dealer network. JCB has the industry’s largest dealer network with almost 700 outlets. Overall, we are hopeful of favourable market conditions, government support, quality excellence, innovation, and strategic planning. The adoption of hydrogen power engines in construction equipment is gaining attention globally. How do you see the role of hydrogen power engines in the construction equipment business specifically in India, and what are JCB India’s plans in this regard? JCB is proud to have taken the lead in introducing this technology to construction equipment the world over. This has been made possible because of the vision of JCB Chairman Lord Bamford, who has been the driving force behind the development of machines that are powered by hydrogen. The machine was unveiled by Hon’ble Minister of Road Transport and Highways Nitin Gadkari. JCB has pioneered the development of a hydrogen internal combustion engine (ICE) and made considerable headway by showcasing this machine which is Asia’s first Backhoe Loader with a hydrogen ICE during EXCON 2023. Developed in response to the urgent need to meet carbon emissions reduction targets, this industry-leading development is a key milestone on the path to decarbonising the construction sector in India. The transition from diesel to hydrogen will be much faster than we think. The availability of hydrogen is set to rise in the future, and this will open up newer areas of development. JCB is the first construction equipment manufacturer to have unveiled working hydrogen combustion engines, and prototype machines powered by such engines. There is no doubt we are witnessing the beginning of an exciting zero-carbon future in India’s earthmoving sector. Hydrogen combustion is the future. IN CONVERSATION J CB India is pivotal to India’s construction equipment sector, driving innovation and efficiency. Its advanced machinery plays a vital role in infrastructure development, powering projects nationwide and fueling economic growth, DEEPAK SHETTY, CEO & MD, JCB India tells ASHISH SINHA. Excerpt: “2023 WAS STRONGEST YEAR FOR JCB INDIA”
01 June 2024 | B W BUSINESSWORLD | 43 What are the major challenges JCB India faces in the Indian market? A significant challenge is the industry’s heavy reliance on roads and highway sector development. To diversify, exploring growth opportunities in areas like airports, logistics, and urban and rural development is important. It was encouraging to note the focus on railways, logistics and transportation infrastructure received in the interim budget this year. Another opportunity area is that of having uniformity in emission norms. While wheeled machines adhere to CEV IV emission norms, but tracked machines such as excavators do not have any emission standards. We are engaging with the government, through ICEMA, to extend these norms to tracked machines as well, ensuring environmental compliance across all equipment categories. This will also open up more markets for exports. Global supply chain disruptions also pose challenges, affecting the availability of components and raw materials. Is there any critical issue that needs immediate attention? A critical issue before us is the lack of regulations for construction equipment operators, which can impact safety and efficiency. We have advocated for industry-wide standards, providing comprehensive training programmes for operators, and promoting awareness about safety protocols and best practices. By addressing these challenges through strategic partnerships, advocacy, and diversification efforts, we aim to maintain our growth momentum. At the moment there is no mandatory training or license to operate a construction equipment. Intervention in this area is required to make the work site safe and productive. [email protected] “JCB is the first construction equipment manufacturer to have unveiled working hydrogen combustion engines, and prototype machines powered by such engines”
44 | B W BUSINESSWORLD | 01 June 2024 How would you describe the financial year gone by for the banking industry? I must accept that the last financial year was probably one of the toughest for the bankers because of the steep increase in the cost of deposits. The rising volatility in the market, coupled with no change in the repo rate, added to the woes. The entire burden on deposits was forced to be absorbed by the banks. Initially, we were worried, but we restructured our plans on every front, be it deposit growth, credit or raising funds. We focused on CASA and retail term deposits and brought new initiatives to boost them. We also found new avenues to raise the liabilities. On the asset side, we shifted our focus towards the RAM sector, where our yield improved significantly. So, in effect, through such efforts, our plan came out successfully, which helped us record 37-38 per cent growth in net profit and our NIM as well at 3.05 per cent at a time when almost all other banks lost their NIM. How much of the concern persists around CASA, deposit growth and, going forward, any guidance to bring it in sync with the total deposits? In the last quarter of the previous fiscal, our CASA improved by 63 basis points. CASA will continue to be our thrust area, and within CASA, it is the individual savings accounts we are targeting. In the first month of the current quarter, we accumulated Rs 5,300 crore in individual savings bank accounts compared to Rs 16,000 crore in the last full fiscal year. We have given guidance on 10 per cent deposit growth and endeavour to grow on both sides – CASA and retail term deposits. In the last fiscal, we could raise about Rs 40,000 crore from retail term deposits. While retail term deposits are a little costly, they are sustainable as one does not get any steep fluctuations, and the LCR (liquidity coverage ratio) is not affected. You have taken a call that you want to grow faster in the RAM sector than the corporate sector. Can you explain the dynamics behind these loan growth aspects? Last year, our retail loan growth stood at 11.68 per cent. This year, we expect our retail growth to be 13-14 per cent because we are seeing tremendous traction. In the first month of this fiscal, we have seen an accumulation worth Rs 3,000 crore in retail advances. Also, we are a pioneer in the gold loan portfolio and will continue to grow healthily. As far as corporate is concerned, we want to grow in double digits, maybe 10-11 per cent, but if we get the opportunity without compromising the pricing, we will surely go for it. However, we don’t want to grow too fast in the corporate sector just for the sake of the top-line. How is Canara Bank looking to navigate the developments around RBI’s draft norms proposing t i g h t e r r u l e s f o r lending and heightIN CONVERSATION “We had given the guidance of bringing down our gross NPA to 4.5 per cent, but we achieved 4.23 per cent. This year we are confident we will bring it down to 3 per cent” C anara Bank CEO & MD K. SATYANARAYANARAJU speaks to BW Businessworld’s Arjun Yadav on RBI’s draft rules for lending and heightened monitoring of under-construction infrastructure projects, the focus on increasing deposit growth and the progress on monetisation of some of its subsidiaries. Excerpts “RBI Preparing The Banking Industry To Move Towards Ind AS”
01 June 2024 | B W BUSINESSWORLD | 45 the IBC and the NCLT proceedings, there has been a drastic reduction in slippages in the corporate sector. We have also centralised our SARFAESI proceedings. It used to be done in all 9,000 branches, but now it is centralised at 177 regional offices. These offices have legal officers with expertise and background in recovery. So, all these measures have resulted in this close tightness, which we are confident will also continue this fiscal year. Can you please also brief us on the progress of monetisation of your subsidiaries? What can we expect in FY25? The two identified subsidiaries are Canara HSBC Life Insurance and Canara Robeco Mutual Fund Company. In both of them, we are the lead promoter, having a stake of more than 51 per cent. For Canara Robeco, we have the necessary approvals and may get listed in the last quarter of FY25. Canara HSBC Life, in the next two months, the proposals will be put forward to the board, and I am expecting its listing in the first quarter of the next fiscal. What would be your message to retail investors given the turnaround the public sector banks have witnessed in the last 10 years? The government has transparently transformed public sector banks, especially in selecting the top management. It has brought a sea change in the working of these banks along with the regulator’s constant monitoring. I strongly recommend retail investors that they can rely on this sector without any fear; just be patient, and if one is a long-term or mid-term investor, then it is heaven for you to invest. [email protected] ened monitoring for under-construction infrastructure projects? For the last two years, I believe that the regulator has been preparing the industry to move towards the IND AS and expected credit loss provisioning. When we have to move towards IND AS, everyone knows that the provisioning norms will be stricter in the coming days; it is not a new concept nor a surprise. I see the regulator preparing the industry mentally, step by step. It is the right time because every bank is doing very well. Banks have ample scope in their margins to absorb any such little shocks or pressure on their margins. Talk us through the razor sharp focus on asset quality, your gross and net NPAs both have come down compared to last fiscal. We had given the guidance of bringing down our gross NPA to 4.5 per cent, but we achieved 4.23 per cent. This year we are confident we will bring it down to 3 per cent. Similarly, on the net NPA side, we may touch 1.27 or go below 1 per cent by the end of this fiscal year. We have put forth a two-pronged approach to achieve this. First, when assets reflect in SMA 0, SMA 1 and SMA 2, we try to address it by meeting the parties, having proper follow-ups, and addressing any resolutions if necessary. This has helped in bringing down our SMA stress. On the other hand, because of
46 | B W BUSINESSWORLD | 01 June 2024 INSIGHT DMRC’S CURATIVE PETITION The Supreme Court’s judgement on the Delhi Metro Rail Corporation's Curative Petition has created a ripple, having shaken and stirred many assumptions on the tenets of law in India. Will this judgement on a commercial dispute make a difference to investment plans of global corporations? BW Businessworld attempts a comprehensive analysis of the landmark judgement on an arbitration award By Palak Shah A SETTLED LAW UNSETTLED?
01 June 2024 | B W BUSINESSWORLD | 47 HE SUPREME COURT of India’s (SC) recent decision to allow and uphold the prayers of a ‘Curative Petition’ on an ‘Arbitration Award’ will go down in the annals of legal history, concerns as it does, the country’s image as a business hub where commercial arbitrations play a vital role. ‘Curative Petition’ is an extremely narrow lane of jurisprudence (unique to the Indian judiciary) that challenges the ‘Doctrine of Finality’ or Res Judicata, which implies that it can be invoked only in the ‘Rarest of Rare Cases’ and may not fit the bill on the Intervention of Courts in ‘Arbitration Awards,’ which are commercial contractual agreements between parties. The fact that the recent SC decision had the potential to shock even the most jaded soul in the legal fraternity can be gauged from the caveat issued by the Chief Justice of India (CJI) D. Y. Chandrachud and two other judges on the bench, Justice B. R. Gavai and Justice Surya Kant that decided on the ‘curative petition.’ Before delivering the judgement, the three judges warned, “We clarify that the exercise of the curative jurisdiction of this Court should not be adopted as a matter of ordinary course. The curative jurisdiction should not be used to open the floodgates and create a fourth or fifth stage of court intervention in an arbitral award, under this Court’s review jurisdiction or curative jurisdiction, respectively.” Although the note of caution was on how not to make ‘curative petitions’ the norm, the judgement may have “unsettled” principles concerning “Scope of Intervention of Courts in Arbitration Awards” and “Test of Patent Illegality” in setting aside arbitral awards. All the work done by the Indian government in the past to amend the Arbitration and Conciliation Act (ACA) to narrow down the scope of judicial interventions to prevent abusive appeals and to ensure prompt execution of arbitral awards fades in the aura of DMRC’s curative petition. The DMRC v/s DAMEPL Arbitration Award is already a subject matter of a case study for the Columbia Law School and has been widely published in the American Review of International Arbitration. Meanwhile in February, the SC agreed to hear yet another curative petition, this time by the Airports Authority of India against the judgement upholding GMR’s rights over Nagpur International Airport. Should the curative petition go against GMR, the field will be open for other airport operators in India to bid for the Nagpur airport. DMRC v/s DAMEPL: A Case of Legal Manoeuvring The Delhi Metro Rail Corporation filed its curative petition at the SC in June 2022 nearly eight months after its review petition was dismissed by Justice L. Nageswararao and Justice S. R. Bhat in November 2021. Before it won a reprieve through the curative petition, the DMRC had lost an arbitration that stretched for four-and-a-half years and was concluded in May 2017 in favour of the Delhi Airport Metro Express Private Limited (DAMEPL). The hearing of the curative petition was held nearly 18 months after it was filed and DMRC got the benefit of ‘time shopping’ after filing the curative petition till both J. Nageswararao and Justice Bhat retired. Had the hearing on the curative petition occurred earlier, Justice Bhat could have been on the bench. Both DMRC and DAMEPL were in agreement that the arbitration award was construed to be final and binding on both parties. Importantly, it was DMRC that took DAMEPL to arbitration when their partnership ran aground over some defects on the line identified by the private concessionaire, which were allegedly not cured by DMRC. Citing the inability of the public transport provider to cure the defects, DAMEPL terminated the contract and left the pro- "We clarify that the exercise of the curative jurisdiction of this Court should not be adopted as a matter of ordinary course. The curative jurisdiction should not be used to open the floodgates and create a fourth or fifth stage of court intervention in an arbitral award, under this Court’s review jurisdiction or curative jurisdiction, respectively." The Supreme Court Bench that heard the DMRC’s curative petition Photograph by Bivash Banerjee
48 | B W BUSINESSWORLD | 01 June 2024 “We have applied the standard of a ‘grave miscarriage of justice’ in the exceptional circumstances of this case where the process of arbitration has been perverted by the arbitral tribunal to provide an undeserved windfall to DAMEPL.” Chief Justice of India D. Y. CHANDRACHUD, (right) Justice B. R. Gavai (above) and Justice Surya Kant (far right) in their ruling on the curative petition of DMRC INSIGHT ject, demanding payments (cost of trains not damages) from the project, invoking the concession agreement. When all attempts at resolving the dispute failed, the DMRC resorted to arbitration, which did not go in its favour. The DMRC then challenged the Arbitration Award at the Delhi High Court (HC), but a Single Bench Judge held that the court had no scope to intervene in the arbitration proceedings. The DMRC then appealed to a Division Bench of the Delhi High Court. The bench, led by Justice Sanjiv Khanna, who delivered the judgement on his last day at the court before moving to the Supreme Court, partly allowed the appetition of DMRC too was dismissed by the bench, cementing the ‘Doctrine of Finality,’ a principle grounded in public policy considerations to prevent abuse of the judicial process, protect parties from harassment by repetitive suits and actions, and promote the efficient use of judicial resources. Futility of Arbitration Surprisingly, the hearing on the Curative Petition, which was admitted on the grounds of being the rarest of rare cases, did not happen for nearly 18 months. It was taken up for hearing in February 2024, nearly four months after Justice Bhatt retired. aside at any stage of the proceedings. The DMRC’s victory through a curative petition lends little credence to the assumption that interpretation of a contract was the exclusive domain of the arbitrator. The case showcases glaring loopholes in the Indian legal regime which has allowed courts to unduly intrude and cause inordinate delays at every stage of the process. For instance, it took ten months to constitute an arbitration panel, 68 hearings to pass an arbitral award which culminated four-and-a half years from the date of invocation of the arbitration clause by the DMRC. Then, it went into several layers of appeal, most of which went against the DMRC until it won by way of a curative petition. The DMRC fiasco is likely to have a perilous impact on India’s image as a stable destination for arbitration proceedings. Justice Rohinton Fali Nariman’s Judgements Throughout his illustrious career, SC Judge J. Rohinton Fali Nariman delivered several judgements on arbitration law but his 25 landmark decisions have shaped arbitration proceedings in India. Among the 25, two judgements, Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India and Associate Builders v. Delhi Development Authority had well defined the ‘Scope of Intervention of Courts in Arbitration Awards’. While Justice M. B. Shah’s judgement on ONGC v/s SAW Pipes has defined the “Test of Patent Illegality” when it could be used as a ground to assail an arbitration award under Section 34, these three judgements together provide the scope of interference by courts as a recourse DMRC’S CURATIVE PETITION peal by the DMRC and said the case was open for both parties to seek arbitration again. The Division Bench’s decision was rendered on 15 January 2019, a good 1.5 years after the issuance of the award on 11 May 2017. A Division Bench of the Supreme Court led by Justice L. Nageswara Rao and Justice S. Ravindra Bhat, however dismissed Justice Khanna’s order, on the grounds that it perverted the principle on intervention of courts in arbitration matters. A review Sadly, unlike the Special Leave Petitions, there is no time bar on hearing of Curative Petitions, a loophole that served the DMRC well. The legal manoeuvring by DMRC demonstrates that factual findings and interpretation of a contract given by the arbitrator can be assailed and set Photograph courtesy: PIB Photographs courtesy: Supreme Court of India
01 June 2024 | B W BUSINESSWORLD | 49 against the arbitral award passed. However, now after the curative petition, which upheld the order of the Division Bench of the HC, the field is open for arbitration awards to be challenged in the courts, even if they do not fit the test of Justice Nariman or Justice M. B. Shah’s judgements. The SC in its recent judgement upholding the prayers of the curative petition said, “We have applied the standard of a ‘grave miscarriage of justice’ in the exceptional circumstances of this case where the process of arbitration has been perverted by the arbitral tribunal to provide an undeserved windfall to DAMEPL.” It is relevant to point out here that in Justice Nariman’s landmark judgement, he had noted that after the 2015 amendments to the Act, the interpretation of the term ‘public policy’ had been narrowed down. He clarified that under no circumstances could any court interfere with an arbitral award on the ground that justice had not been done in the opinion of that court. This would be an entry into the merits of the dispute, which is contrary to the ethos of Section 34 of the 1996 Act. Interestingly, the relevant passages of the judgement in the Ssangyong case say: “Under the guise of interfering with an award on the ground that the arbitrator has not adopted a judicial approach, the Court’s intervention would be on the merits of the award, which cannot be permitted post amendment.” Justice Nairman said, “There must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within ‘the fundamental policy of Indian law’, namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the backdoor when it comes to setting aside an award on the ground of patent illegality.” Justice Nariman’s order had also made it clear that reappreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted on the ground of patent illegality appearing on the face of the award. When is an Award Patent Illegal? The arbitral award is in conflict with the public policy of India only if: u the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or Section 81; or leak. It did, however, uphold a curative petition in a mere commercial dispute and overturned its own two bench order. ‘Justice by the Chancellor’s Foot’ In old England, the Lord Chancellor’s foot was used to describe the variability of equitable justice, which simply meant that the fairness of a decision depended on the conscience of the Chancellor, who was the judge and varied just as the size of the judges’ feet did. In the commercial dispute between DMRC v/s DAMEPL (Delhi Airport Metro Express Private Limited), the decision of the bench that comprised three senior most SC judges led by the Chief Justice of India D. Y. Chandrachud, could be said to have delivered “Justice by the Chancellor’s Foot” for the simple reason that a ‘curative petition’ was allowed and v it is in contravention with the fundamental policy of Indian law; or w it is in conflict with the most basic notions of morality or justice. Explanation 2: For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. The Bhopal Gas Tragedy was perhaps, a man-made disaster of the scale of the bombing of Hiroshima and Nagasaki. Yet, the Supreme Court of India rejected a curative petition for higher compensation against Union Carbide, the perpetrator of the cataclysmic gas upheld in an arbitration matter. The DRMC v/s DAMEPL case could be the first instance anywhere in the world, where a ‘fifth layer’ of appeal post Arbitration Award, after the rejection of the ‘Review Petition’ by the Supreme Court was allowed – that too in a commercial dispute to overturn the final judgement of the apex court. Would potential foreign investors baulk at a legal system, one wonders, in which arbitration awards could be so easily overturned? Concept of Curative Petitions The concept of a curative petition was "There must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within 'the fundamental policy of Indian law', namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the backdoor when it comes to setting aside an award on the ground of patent illegality." Justice ROHINTON FALI NARIMAN in his judgement on the Ssangyong case
50 | B W BUSINESSWORLD | 01 June 2024 INSIGHT DMRC’S CURATIVE PETITION born in 2002, when principles governing it were established by the SC in the case of Rupa Ashok Hurra Vs Ashok Hurra. Before Curative Petitions, a Review Petition in the SC was the last layer of appeal, as is the practice globally. But in the Hurra case, the conscience of the court (judges) was so shaken that it gave birth to yet another layer of appeal in the form of a ‘Curative Petition’. From that day on, every curative petition in India is decided on the basis of principles laid down by the SC in the Hurra case of 2002. This was a case of a matrimonial discord, where the question of validity of a decree of divorce reached the SC after the woman withdrew the consent she had given to divorce by mutual consent. Curative Petitions strive to prevent the miscarriage of justice and minimise abuse in the process of law. More than 600 curative petitions have been filed in the SC over the past two decades since the Hurra case, but rarely have any passed muster at the SC, till the bench of Justice Chandrachud, Justice B. R. Gavai and Justice Surya Kant upheld DMRC’s curative petition in a commercial dispute against an Arbitration Award allowed by the division bench of SC itself. The DMRC v/s Arbitration was a commercial dispute involving a public limited company with a private player, who cannot be judged on the basis of perceptions. The SC judgement that upholds the Curative Petition, after the dismissal of the review petition in the DMRC matter, does not refer to any abuse of the judicial process nor could the dispute be considered the rarest or a rare case. Was the SC therefore, justified in upholding the curative petition? As in the Hurra case, the rule says that the Judge who heard the Review Petition ought to be on the bench hearing the Curative Petition. Was DMRC aware of this rule when it waited for Justice Bhat to retire before pressing on the hearing of its curative petition? Principles of Curative Petition To bring a Curative Petition, it is key for the petitioners to establish gross miscarriage in the “delivery of justice due to a bias or abuse of the process of law.” The petitioner is entitled to relief Ex Debito Justitiae (fair trial) via a Curative Petition if it is established that there was a violation of Principles of Natural Justice in that the petitioner was not a party to the lis (suit) but the judgement adversely affected his interests or, if he was a party to the lis, he was not served with notice of the proceedings and the matter proceeded as if he had notice. Then, if a Judge during the proceedings failed to disclose his connection with the subject-matter or the parties giving scope for an apprehension of bias and the judgement adversely affecting the petitioner. To restrict filing of curative petitions only in genuine cases, the Hurra case provided that it contain a certification by a Senior Advocate with regard to the fulfilment of all the requirements provided in the judgement. Unfortunately, in most cases, the certification is casual and does not fulfil the requirements of the judgement. The SC’s Curative Jurisdiction is far more restricted than review proceedings, as stated in Union of India (UOI) and Ors. vs. Union Carbide Corporation & Ors (2022): “Although this Court in Rupa Ashok Hurra chose not to enumerate all the grounds on which a curative petition could be entertained; the Court was clear in observing that its inherent power ought not to be exercised as a matter of course, and that it should be circumspect in reconsidering an order of this Court that had become final on dismissal of the review petition.” In the DMRC vs DEMPL case, the arbitration dispute concerned civil work in a public-private partnership project involving the construction, operation, and maintenance of the Delhi Airport Metro Express Rail project. Has the SC now weaponised a curative petition to an extent to which it could be used by aggrieved parties in commercial disputes as the last resort of appeal? [email protected] “Although this Court in Rupa Ashok Hurra chose not to enumerate all the grounds on which a curative petition could be entertained; the Court was clear in observing that its inherent power ought not to be exercised as a matter of course, and that it should be circumspect in reconsidering an order of this Court that had become final on dismissal of the review petition.” The Supreme Court of India in its ruling on the Union of India (UOI) and Ors. vs. Union Carbide Corporation & Ors (2022)