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HVK Archives: L. K. Advani Addresses Industry's Concerns

L. K. Advani Addresses Industry's Concerns - The Telegraph

Posted By Ashok V Chowgule (ashokvc@giasbm01.vsnl.net.in)
Wed, 19 Feb 97 21:44:14 EST

L. K. Advani Addresses Industry's Concerns

Bharatiya Janata Party

"Success Through Synergy: Between Government and Business, And
India And the World."

The word 'synergy' is one of the buzz words today, especially, it
seems, in the world of business. Business is all the time looking
for synergy in everything, it does: in its production techniques
and technologies, between its processes of backward and forward
integration, between the various kinds of its human resources and
also between companies engaged in compatible areas of activity.
'Growth through synergy' is almost an axiomatic statement of modern
business. But synergy is also one of those seminal concepts which
has a generalised meaning transcending the specific confines of

One of the best books I have read during the year is one by Stephen
Covey titled "The Seven Habits of Highly Effective People". The
book presents a holistic, principle centered approach for solving
personal and professional problems.

One of the seven habits Covey has specifically identified is the
ability to Synergise. Covey writes: "Synergy is the essence of
principle-centered leadership. Simply defined, it means that the
whole is greater than the sum of its parts. One plus one equals
three or more. The essence of synergy is to value differences, to
respect them to build on strengths, to compensate for weaknesses."

At the outset, I must point out that although synergy may be a new
word in business parlance, the concept of compatibility and harmony
between two entities providing potential for growth and new
creation is indeed the cornerstone of this country's fundamental
world view.


Late Pandit Deendayal Upadhyaya, who was president of the Bharatiya
Jana Sangh and whose 'Integral Humanism' is the guiding theory for
the BJP, believed that harmony and compatibility and not conflict -
is the basic law of nature, including the nature of human society.
He expounded the meaning of 'four purusharthas' or four-fold goals
of life-dharma or right conduct, artha or satisfaction of material
needs, kama or satisfaction of sensuous needs; and moksha or
communion with the Creator and thereby fulfilment of spiritual
needs - by outlining a structure of society which makes It possible
for its members to cooperate In the pursuit of all these goals.

This has been the viewpoint of all our ancient thinkers and social
reformers, as also the modern ones such as Swami Vivekananda,
Mahatma Gandhi, Rabindranath Tagore and Yogi Aurobindo. I am saying
this by way of a conceptual preface only to underline the fact that
Success Through Synergy - Between Government and Business, and
Between India and the World' is a perfectly Swadeshi thought.


Broadly stated, what does a society expect from its economic
system? I would list five basic expectations:

(A) Generate real, not just notional, wealth for the nation in the
form of a cornucopia of goods and services to meet the needs of the

(B) Create employment and productive opportunities for all in a
structure which allows for minimum socio-economic disparities.

(C) Develop the country's physical infrastructure, which acts as a
growth multiplier, as well as the social infrastructure in areas of
education, health care, drinking water, housing, sanitation, etc.
which helps to uplift the living conditions of the disadvantaged
sections of the society;

(D) Protect the environment and pass it on unharmed and unpolluted
as a precious inheritance to whom it truly belongs - our future
generations; and

(E) To achieve all this in a manner so as to consciously enrich the
cultural and spiritual base of society.


It is obvious that India has performed rather poorly in respect of
all these five imperatives. But why? The answer, according to me,
is that both the government and business seem to be working for
themselves, and not as partners striving together to serve their
common constituency: the people. So, the first requirement to
create a true synergy between government and business is for both
to ask themselves at each step : Are we guided in this by what is
good for society, or only what is good for ourselves?

For the purpose of this discussion, I shall extend the meaning of
government to include the political class as a whole and assert
that, if the political class and the business class pursue only
what they narrowly consider to be good for themselves, unmindful of
the long-term good of society, they will sooner rather than later
invite ignominy and harm upon themselves. Let me give a couple of

If our pharmaceutical industry and government had acted together in
a healthy partnership to promote public health rather than a regime
of increasingly expansive and narrowly-focused private health care,
we would perhaps have been spared the shame of the dengue epidemic
in the national capital and plague in Surat.

Similarly, if the building industry and government had acted
together in an enlightened partnership, we would have been spared,
at least to some extent, the ubiquitous ugliness and decay in
almost all our cities. And our builders, contractors and other
sections of the construction industry - which ought to be seen as a
vital and proud player in the nation building industry - would not
have earned the bad reputation which they have.


The Same is true about my profession. By not following the norms
of probity in public life - and, instead by turning politics itself
into a lucrative personal business many of our fellow politicians
have caused society to question the credibility of the Political
class as a whole-in fact, of the democratic system itself. Today,
some are even paying the price for their corruption and abuse of

This leads me to mention the second crucial requirement if we are
serious about maximising synergy between government and business.
And that is, the need to Introduce and religiously practise maximum
transparency and accountability both In business and politics.

As a Practising politician, I must state here that, generally when
the media and the public fora discuss the issues of transparency
and accountability, they do so only with reference to politics and
government. We in the BJP welcome this, wedded as we are to the
goal of Su-Raj or 'Good Governance', one of the four basic
principles of Su-Raj, as we understand it, is shuchita or probity,
the others being samarasta (social harmony), suraksha (national
security and security for the common citizen) and swadeshi
(economic nationalism).


But are probity, transparency and accountability required only in
the functioning of political parties and government? Is business
exempt from these? I am happy to note that, in recent months,
there has been quite some discussion in business circles also about
what is termed as 'Good Corporate Governance', and about ethical

In this context, we politicians have been at the receiving end in
recent days, and with some good reason. Some in political circles
are angry with the judiciary because of these happenings. The anger
is not quite justified. Some excesses have no doubt occurred
because of judicial activism. But on the whole, this activism has
its roots in executive inertia, in the abdication by the executive
of its own responsibilities, and the steep slump of probity in
public life. I am unable to see any greater justification in the
hue and cry being raised in business circles when some here also
are having to taste the same medicine. There may not have been
till yet much of a synergistic relationship between government and
business as far as the country's growth is concerned. But politics
and business have had an enduring symbiotic relationship, in so far
as money is concerned!

This brings me to another aspect of the corporate situation. If a
business is mine entirely, I may be free to do with it whatsoever I
wish, within the ambit of the law. Truly speaking, most of the big
business in this country is owned essentially by the public
financial institutions and the investing public. Most of those who
project themselves as owners are really managers who have acquired
full control by the quiet and compliant behaviour of the FI's and
the wilful exclusion of the investing public. There is ample
evidence available of how public companies are exploited, looted
and sometimes destroyed by the so-called owners.

The revelations of the past few weeks seem to suggest that even the
managers of the so-called professionally managed companies are
susceptible to the same pressures and temptations. I hope that
recent events will have a catalytic effect resulting in the
establishment of higher ethical standards in our businesses which
in turn will have a salutary effect on our politics.


There is very often ignorant, and sometimes motivated, but wen
orchestrated, criticism in some circles that the BJP's thinking on
economic matters is "obscurantist", "growth-hindering" and that our
policies, if we come to power, would be akin to creating the Indian
version of the Iron or Bamboo Curtain. It is also suggested that
the growth of the BJP is an invitation to economic and political
instability in India. I wish to state categorically that there is
not a grain of truth in these fanciful perceptions.

Nearly three years ago, when some of my colleagues and I were
invited by the Confederation of Indian Industries for an
interaction with businessmen, I had said: "The BJP believes that
economic growth cannot take place in a vacuum. Economic growth is
linked to political stability, with political achievement and if
there is political turmoil and there is political corrosion, then
economic growth would suffer."

Occasionally, foreign business, media and political circles express
concern whether the BJP would reverse the economic reform policies
initiated in 1991.

Let me react by saying that the BJP is totally dissatisfied with
what has actually been achieved since 199 1, but let me also
emphasise that the broad direction that has been adopted in 1991 is
a direction for which the BJP has been pleading for decades. So
there is no question of the BJP trying to change the direction.
The direction will remain the same.

Our government will in fact intensify the pace of internal
liberalisation. Simultaneously, it will welcome foreign
investments in infrastructure and hi-tech sectors. All bureaucratic
barriers to rapid implementation of developmental projects will be
pulled down. Procedures will be simplified. I shall go further to
say that we shall even end all discretionary powers of politicians
and bureaucrats so that there is complete transparency and
accountability in the business-government relationship.


Since the days of the Jana Sangh, my party has been opposed to the
command economy pattern imposed on the country by the Congress. We
had opposed it even when this pattern was very much an
international fashion m the 1950s. '60s and the '70s. We had
opposed It even when it was something of a sacrosanct and
inviolable principle that the public sector must have the
commanding heights of the economy.

Command economy pattern, to put it charitably, was a historical
Aberration. It was an artificial implant in an ancient country like
India which has, both in philosophy and practice, always stood for
a decentralised economy wedded to broader social objectives and
operating within a law based political framework. It is this unique
concept of business which enabled India, before she became a victim
of foreign aggression and rule for several centuries, to scale the
famed heights of prosperity and glory in ancient times.


An objective look at the five year balance-sheet of liberalisation
would show that advertisement far exceeds actual accomplishment on
the ground.

In 1996-97 a study by the CMIE shows that, in real terms,
investment in the economy has tended to stagnate in the wake of
economic liberalisation. The bank advances to the economy have
regressed in the current year and show an increase of only Rs.
28,194 Crores between Nov. '95 and Nov. '96 as against Rs. 45,150
Crores in 1994-95. This points to a clear decline in the economy.

Without infusion of money the economy is getting starved. No
sector, whether it is manufacturing, stock market, real estate or
trading is reporting cheers. There is all round lull. The nation
seems to be in a helpless state, bereft of confidence. The
economic mis-management of India in the last one decade is manifest
in unprecedented scams. The present political uncertainty in New
Delhi has only aggravated the situation and has seriously eroded
the national morale.


Now, I would like to touch upon three main areas of legitimate
concern for Indian business.

One, businessmen often tell me and my party colleagues that,
despite all the official talk of reforms, the systems and
procedures of government are still nearly as complicated,
irrational and non-transparent as before. This leads to avoidable
delays in project implementation, resulting in not only time
overruns but also huge cost overruns, not to speak of indirect
opportunity losses in the downstream economy. It is disturbing to
note that very few infrastructure projects which were
conceptualised after liberalization have been commissioned so far.

Secondly, there is still too much distrust in government's attitude
towards business. In general, ministers and bureaucrats give an
uncomfortable feeling to businessmen that they are doing a favour
to the latter and not just performing their rightful duty by
removing hurdles which they have themselves created in the first
place. As a result even those businessmen who believe In doing
business the straight way are forced to bend before the system.
This lack of trust and professionalism cannot make for a successful
synergy between government and business.

The third area of concern which the BJP entirely shares with the
Indian business class is the mindless and harmful way In which
government is opening up the Indian economy to foreign players in
the name of globalisation.

Our businessmen and professionals have built a proud indigenous
industrial base with much effort and against many odds in the
pre-liberalisation era. It is the bounden duty of government to
calibrate each of its steps in the direction of globalisation in
such a way that it preserves and further strengthens our Indigenous
industrial and business base. Instead, what we are seeing in many
sectors is government's policies being so changed as to
deliberately create a non-level playing field in which Indian
companies lose out to the financial and marketing might of
multinationals. This is unacceptable to the BJP. Globalisation
must be used to augment our national interests, not undermine them.
The BJP is not opposed to foreign capital or foreign companies per
se. But foreign investments cannot be the basis of our planning and
policy process.

It seems to me that, one of the most reliable way of using
globalisation to our advantage is to create a strong nationalistic
alliance between government, business and the multi-disciplinary
class of professionals and Intellectuals. We should carefully
identify our areas of competitive advantage in the world market,
and thereafter mobilise all our resources in a determined, focused
national effort to actualise and maximise that advantage. Japan,
Korea, China and many other successful economies of Asia have
adopted this synergistic strategy to great effect.


India today faces a really difficult economic situation. Indeed,
India is having to fight an unequal economic war. I say economic
war because economics means business and international business
means, and is, war. This war has to be fought essentially by the
combined effort of businessmen, bureaucrats, professionals and
technocrats with politics playing the role of consensus builder.
And, for this, the first requirement is national consensus.

Prof. Takeshi Hayashi, the Japanese expert who headed the United
Nations University project on Japanese experience, repeatedly
emphasised in his preface to the 20 Volume Report, 'The conditions
under which industrialisation begins cannot be the same for every
country; the only common element required is that a national
consensus be formed".

The secret of Japanese success is national consensus which they
achieved through the Mm (ministry of Trade and Commerce)
arrangement. Without national consensus the challenges facing the
country cannot be met with confidence and success. But national
consensus is not conceivable where political untouchabilitiy is
practised. The BJP is the mainline political force today and yet
the disparate congregation of all unlike-minded parties ruling
today have nude political untouchability vis-a-vis BJP the main
fulcrum of their politics. This is the very reverse of the
fundamental requirement for protecting the national interest.


The world today stands on the threshold of a new century and anew
millennium-in awe and expectation but also with a sense of unease
and uncertainty. It is natural to ask ourselves, what kind of
India-and what kind of a world-will it be in the 21st century? At
the beginning of this century, we were an enslaved national groping
for a way to gain our freedom. Fifty years ago, we became a free
nation. What have we achieved in these 50 years? And where and how
shall we go in the next 50 years?

It is not surprising that we ask these questions about India in a
global context. Indian philosophical and intellectual outlook has
always been universal. But there is an added reality of
contemporary history which forces us to study closely the synergy
between India and the world. It is the phenomenal growth of
information and communication technologies.

There is a global flow of people, goods, services, technologies,
investments, information, knowledge and cultural products in an
increasingly unrestricted-and seemingly unrestrictable-manner. As
we all can see, it is a movement that transcends national, racial
and cultural barriers.

We are not threatened by this reality. We in the BJP indeed
welcome it. But, once again, if we are interested in maximising the
synergy between India and the world, we must bear in mind two
critical requirements. Even as we embrace globalisation, we must
strengthen our own national identity, we must instil a sense of
pride and self-confidence at all levels in our society. And since
I am addressing a business gathering, let me also state the
obvious: a nation's pride and self confidence depends, among other
things, in the quality, competitiveness and global reach of its
products, services and brands. We would like to see Indian
products and brands to popularise the 'Made in India" label all
over the world.

The second requirement is related to the first. In order to compete
globally, we must vastly improve our levels of knowledge, skills,
manufacturing practices, management expertise in all sectors of the
economy-right from the corporate sector to the rural co-operative
sector, and covering in its embrace the public sector, the private
sector, the small self-employed entrepreneurs, the artisans, etc.

Let us remember that the coming age is the age of not only
information but knowledge. Our ancient rishis believed in education
which imparted not just information and knowledge, but wisdom, and
said: Saa vidya yaa vimuktaya (education liberates). Let us redeem
ourselves by building a wise society ready to face the challenges
of the next century and the millennium.

(Excerpts from BJP President, Shri L.K. Advani's speech at the 69th
Annual Session of the Federation of Indian Chambers of Commerce &
Industry, on 11th December, 1996.)

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