Industrialists skeptical, only about a third think 1981 will be better than 1980

Bharat Ram: Worried about a stagnating infrastructureA happy new business year? No such luck; going by the reactions of top industrialists and businessmen who gave their views to India Today on the prospects for the coming year. Only about a third think that 1981 will be better than 1980, but the rest felt that it will either be no better or far worse. Some are so unsure of what is in store for them that they are just keeping their fingers crossed.And there is no end to the problems they are faced with right now or fear they may continue to run into in the coming year. The big bad wolf is, of course, inflation and more than two-thirds cite it as one of their worries, though some would not say that it tops their list of problems. Next in the list are three headaches - government policy and controls, labour relations and tight finance, roughly in that order - and there is apparently not a single industrialist who is not affected by one or two or even all three. Infrastructure (including power and energy) comes next, but surprisingly only about 20 per cent mention it as their main worry. Raw materials are the least of anybody's problems and only one person has mentioned it as his current main worry. So apparently is poor demand which comes very low in the list of priorities and only about one in 10 businessmen are affected by it.Bharat Ram who says he is keeping his fingers crossed about 1981, does not look forward to much improvement in the infrastructure which, according to him, is the main culprit. "I do not visualise new capacities on any scale in 1981 and the foreign exchange situation is likely to be worse because of increase in oil prices on the one hand and stagnant exports on the other. The only bright spot may be on the foodgrain front." Bharat Ram is worried about inflation and tight finance, and says that unless there is a let-up in the Government's industrial policy towards big business houses, things will not improve materially.Varied Views: Ajit Haksar. chairman of ITC. says that 1981 will be better than 1980. which is surprising, considering that he mentions labour relations as his main worry. He may be right because, according to a report which seems to have gone unnoticed, there has been some improvement on the labour front and the number of man-days lost between January and October fell by more than half. "The recognition that economics is at the base of every human problem is now being acknowledged," says Haksar, adding that this should help tighten up discipline in industrial life. Isn't this what Karl Marx said?The Federation of Indian Chambers of Commerce and Industry (FICCI) apparently, suffers from a split personality. While its current president. Kedar Nath Modi, says that 1981 will be better than 1980, his vice-president, Arvind Narottam Lalbhai, fears that it will be far worse. Lalbhai is actually the only industrialist to have serious misgivings about the prospects for the coming year possibly because he does not think that the economy has come to terms with inflation. "Unless the bottlenecks in transport, coal and electric supply are sorted out," he says, "it will not be possible to control inflation." Lalbhai will take over from Modi as FICCI president in April.What makes Modi so bullish on 1981? Inflation is not his main worry in any case but tight finance is, and it may be his hunch that with inflation 'stabilising" at the current level, the Government may go easy on its tight money policy. "The changes in the Government's industrial and other policies," says Modi, a born optimist, "should help greater production from existing units and also help in creating new capacities."Things are a little different in the south, but not all that different. S. V. S. Raghavan, formerly of Bharat Heavy Electrical (BHEL) and now with Ashok Leyland in Madras blames "a spreading psychosis that nothing good can happen in this country" as his prime worry. "Government procedures (for licensing etc) will continue to be the same." he says. "Today even if you are a non-MRTP or non-FERA company it takes more than a year to get a licence. The procedures are so tortuous that it is almost a crime to produce more. There is no reason why a licence should be required to start a company - there is no Company Law in Indonesia - or a factory, except perhaps for companies whom they want to control." Ashok Leyland has a Rs 300-crore expansion in hand and is spreading its wings in Maharashtra and Rajasthan.Government's Role: Things are, however, better in the east, whatever the newspapers might say. Sudarshan Kumar Birla who, unlike Raghavan, is bullish on 1981, says that the Government is anxious to move the economy forward - unlike the previous administration, he is careful to add - and the full effect of this change in gear should be felt in the coming months. For the present, however, his main problem is tight finance and the continuing demand recession following the drought. With a better harvest this year, things should improve, he says.Jaykrishna Harivallabhdas whose Ambica group is one of the fastest growing in Gujarat is not taking any chances and "keeping his lingers crossed." "I don't want to say anything," he says, "the situation is so volatile and things are changing so fast that it is hard to predict anything." His main worry is power and fuel but there has been some improvement in the situation lately and Harivallabhdas may start breathing a little more easily in future.Like FICCI, the Bajaj group is a divided house when it comes to crystal-gazing. While Ramkrishna Bajaj in Bombay is bearish on 1981. Rahul Bajaj in Pune is obviously in a more optimistic frame of mind. Their way of looking at things is not, however, all that different. Both want a firm government - government with a political will to take unpleasant decisions, says the elder Bajaj - but while Rahul Bajaj feels that the Government does show the necessary strength of will, Ramkrishna Bajaj is not so sure.Prospects: "I believe 1981 will be better (unless the Iraq-Iran war or some other international event comes in the way) because things appear to be moving in the right direction though by no means at the desired pace," says Rahul Bajaj. "What is required to speed up this process is a political will on the part of the Government and better and professional management of the economy as a whole." he adds. Ramkrishna Bajaj, like Bharat Ram in Delhi, is however resigned to things continuing more or less in the same fashion as at present. "Only because of the normal agricultural crop," he says gloomily, "we may be able to fare better next year."Coming nearer the capital, Raunaq Singh, whose enterprises went through a patchy period recently, sees a silver lining in the clouds and is more hopeful about the future than, say, his fellow "capitalist" Prem Pandhi of Cadbury India. "The single most worrying factor in the present environment is the quality and morale of the civil servants and the demoralisation in the public sector industry." says Pandhi. They can do much better but unless they do. he adds, no amount ot planning and pumping of resources will be of much help.Among the younger industrialists, hope may spring eternal but gloom keeps breaking in. Parvinder Singh of Ranbaxy Laboratories should be riding high as his company has done so well recently but he too is cautious about the prospects for the coming year. "The stringent financial policies including the high rate of corporate tax do not permit sufficient plough-back and hamper rapid growth of the pharmaceutical industry," he says. If, going by the many voices of industry and business, 1981 may not be much different from 1980. why are the stock markets booming? But that, as Jeeves would say, is another story. Published By: AtMigration Published On: Nov 30, 2013 10:55 IST--- ENDS ---

Download App

Get 37% off on an annual Print +Digital subscription of India Today Magazine

Industrialists skeptical, only about a third think 1981 will be better than 1980

A happy new business year? No such luck; going by the reactions of top industrialists and businessmen who gave their views to India Today on the prospects for the coming year.

PUBLICATIONS

TELEVISION

EVENTS

RADIO

GAMING

USEFUL LINKS

PRINTING

WELFARE

DISTRIBUTION

SYNDICATIONS

WEBSITES

EDUCATION