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From Sifaarish to Silicon: the Indian Company’s Silent Revolution

Why was India’s first supercomputer imported by a company which sold paint? How did an Indian subsidiary which making glass-lined vessels for the chemical industry purchase its German parent, becoming the world’s largest player in the space? Why is an Indian company’s fishing ropes preferred the world over? Why should one be implored to ponder over these questions?

India’s corporate sector has silently undergone a sea-change, which is seldom talked about. Something crucial has occurred in the past decade or so, whereby we have silently surpassed a momentous milestone. These questions offer us a path to an important realisation- the era of Indian firms being steeped in technological sophistication isn’t yet to come, but we have already been living in such an age. This is generally true across sectors- including ones which we would otherwise dismiss as having little scope for such an evolution. Not only this, but today’s Indian economy handsomely rewards such firms, while it punishes those who depend on their ‘connections’ to mint money. The modus vivendi of Sifaarish, whereby profits snaked through favours and connections, has faded into the twilight. Indeed, it sounds too good to be true- so one would say. It’s this mental image of the economy- a Byzantine, crawling contraption ailed by problems too big to bear- which requires an update. What made you money at the beginning of this millennium would leave you a pauper today; the era of cronies has ceased. The Indian economy of today is enamoured by extremely competitive technological titans.

I. The Losers: Fall of the ‘Connected’ Company

For India, 2010 was a year of popular rage and sweeping winds of change. The nation was rocked by a relentless series of corruption scandals around the time. Preceding this, the populace had suffered much under inflation hovering around 10% for two years as India’s macroeconomic situation faltered. India’s consciousness smoked livid upon the issue of corruption, and TV studios growled over an endless downpour of scams befalling the nation one after another. Large firms were implicated, and in hushed tones, names of great importance were being insinuated. Between 2010 and 2014, an unprecedented public outburst of frustration erupted. Somehow, the dull, murmured acceptance of the omnipresent politician-bureaucrat-businessman nexus had portentously cracked. It was not merely popular perception- Ruchir Sharma, Morgan Stanley’s Chief Global Strategist, labelled the rise of crony capitalism as being India’s “fatal flaw” in September 2010 itself. In his book ‘The Rise and Fall of Nations’, he noted how the then top ten Indian tycoons had controlled wealth equal to 12% of India’s GDP, compared to China’s 1%. Furthermore, nine out of these ten were holdovers from 2006, while China had none (implying the relative lack of the churn that competition creates). Corruption emerged as the principal issue under public glare- socially, economically, and politically.

In late 2010, the Comptroller and Auditor General (CAG) released a report regarding malpractices in the 2G Spectrum Allocation process within the telecom sector. Its high-decibel political fallout, unfortunately, overshadowed a fundamental economic change it inadvertently triggered- the demise of the ‘connected company’.

The not so humble beginnings of the ‘connected company’ began around the time of independence, in an era whence the state maintained an iron grip over economic life. During the days of the License-Permit Raj, a firm’s most potent competitive advantage was how much influence it could wield over the policy paraphernalia; the fundamentals of the product and business finished a distant second. A helpful regulatory barrier here, combined with a convenient bureaucratic involvement there; this was the perfect recipe for success. Your business acumen was a meagre chore, for the path to market domination snaked through government offices, posh residences, and hotel lobbies.

This phenomenon, known as ‘regulatory capture’, had long outlasted the License-Permit Raj itself, underscoring the resilience of the omnipresent ‘System’ responsible for its upkeep. Thus, inefficient firms, steeped in the dark art of corrupt practices, could indulge in unchecked rent-seeking despite offering inferior products and services. As argued by Raghuram Rajan and Luis Zingales in their book ‘Saving Capitalism from the Capitalists’, regulatory capture brutally nullifies the essence of financial markets, which is rewarding ingenuity and spreading prosperity. The status quo was a self-perpetuating nightmare, where businesses and policymakers continuously tightened their mutual embrace, motivated by self-interest. Swaminathan S. Ankalesaria Aiyar elucidated upon this vicious cycle in his ‘Escape from the Benevolent Zookeepers’ (zookeepers being his uncharitable appellation for politicians and bureaucrats)- “Many zookeepers became incredibly wealthy by using controls imposed in the holy name of socialism to line their pockets and create patronage networks. Some not so benevolent but pragmatic politicians opposed the lifting of controls simply because it would mean the disappearance of their ability to extort.”. The paternalistic worldview whereby the Indian entrepreneur must be smothered in protective bubble-wrap has inflicted a great deal of corrosion to the economy. Despite the resounding success of freer and better (not further) regulated markets, this sanctimonious talking point has remained persistently fashionable. It should come as no surprise that its policy vestiges have been made much creative use of by interconnected interests.

A picture states a thousand words, and this graph is no different. This is taken from the Economic Survey of 2019-20, published by the office of the Chief Economic Advisor to the Prime Minister of India. The dotted red line traces the performance of a basket of connected companies compiled by Ambit Capital, while the solid violet line is the BSE 500 Index representing the broader market. The vertical blue line signifies the release of the CAGs 2G Spectrum Allocation Report. Not only did connected companies’ combined value fall precipitously, but they have continued to languish with no hope in sight. It’s evident that their secret sauce of cosying up to policymakers offers no competitive advantages anymore; if anything, the market is actively shunning them. The economic moat of regulatory capture had been conclusively breached.

Around 2017-18, in the run-up to the 2019 General Elections, there was some rekindling of interest in connected companies. This was sparked by the lingering hope that cash hungry political parties would revert to offering regulatory capture in return for funds. However, these were merely the last effulgent rays from a dying flame. By the time 2018 was ending, the message was crystal clear- the death knell for connected companies had been sounded, and India’s political economy had undergone a significant structural change. The connected companies index has sunk into a melancholic terminal decline ever since. The palpable progress was pre-empted by changes in India’s billionaire lists, which Ruchir Sharma noted in the aforementioned book. Between 2010 and 2015, India saw the sharpest gains in the ranks of ‘good billionaires’ globally, as shibboleths from the past melted away. In 2016, the Economist visited the tombstone of the big fat Indian crony as it revealed that the wealth of crony capitalists in India had reduced from 18% of GDP in 2008 to 3%. Compared to the older Nawabs of State allocation-based sectors known to attract the unscrupulous (such as real estate or commodities), newer billionaire lists are replete with productive sectors including pharmaceuticals and consumer goods. The trend has only strengthened ever since.

II. Whither those who Cried Wolf?

Before we move further, it is important to appreciate the sheer adaptability of Indians. The old tale went that Indian firms would fail to compete if the greedy goblin of global money floods our markets. To no surprise, this dystopian fear-mongering stands completely discredited in both experience and numbers. If anything, global flows have only strengthened the Indian businessman and removed the veil of local autarky which limited incomes. The facile argument that only larger sized businesses would survive also doesn’t cut- Punjab’s small football sewing units, Coimbatore’s textile looms, and Mirzapur’s carpet weavers, are all connected to global trade chains. Hence, the Economic Survey of 2019-20 offers no surprises when it confirms the role of removing regulatory cholesterol in supercharging growth in banks, ports, etc. Not only that, but the small business has remained remarkably resilient and flexible, riding the waves of dynamic value chains to continuously thrive. They use technological tools and connectivity as important levers for their progress and often align with bigger firms with access to technology as suppliers. The result is a technological diffusion whereby productivities at the ground level increase.

The aforementioned economic survey makes three key observations in this regard- rates of new firm creation accelerated significantly from 2014 onwards, suppliers and employees reap benefits of wealth creation (as opposed to being ‘exploited’), and that entrepreneurship is no longer a refuge of necessity whereby new firms indeed boost district level GDP. Besides, not only have businesses managed to scale up, but many stand as global giants in their field today. They used internationally low-interest rates to their advantage and combined it with strong free cash flows, consequently making big-ticket foreign acquisitions. The writing on the wall is clear- we don’t need suffocating “protection”, but the freedom as well as the risk which comes with empowerment.

III. The Winners: Rise of the Connective Company

So far, we have understood what no longer works in the Indian market. The natural corollary of this transformation would be to ask- what does? What is the new kind of competitive advantage which the Indian economy rewards? The answer to this is very simple- the company which fuses technology with its very DNA. Such ‘connective companies’ deeply integrate technology into their workings such that their competitive advantage is to a large extent technological. The ‘connective company’ aims to construct technological moats around a robust business idea, connecting technological solutions to activities across the value chain. Many would be surprised that this formula is not a hypothetical prescriptive, but merely an observation. Leading firms in India are in effect technology companies, for that is where their core competitive advantage lies. We, unfortunately, fail to appreciate their nature and group them erroneously with those sharing only superficial likeness. A few examples are warranted for the sake of explanation.

Asian Paints

A little-known fact is that the first supercomputer to grace corporate India belonged neither to an IT firm nor a bank. This honour belongs to Mr Champaklal Choksey in the early 1970s, one of the founders of India’s largest paint maker- Asian Paints. Before this feat, Asian Paints had already brought one revolution in the industry- getting rid of wholesalers and selling directly to dealerships. From the very beginning, Asian Paints had possessed an astute sense of how to capitalise on gaps, and immaculate attention to supply chain details. Intrinsic to the Asian Paints growth process was professional management and using technology as not just a facilitator, but enabler. They wanted to not only do present things better with technology but do completely new things with it as well. Thus, the supercomputer was used to analyse demand patterns and enhance Asian Paint’s predictive analysis. The use of data analytics has continued ever since, whereby third-party vendors are actively roped in.

Asian Paint’s data prowess and analytical capabilities have enabled them to replenish dealership stocks with pinpoint accuracy multiple times a day, accounting for trends such as season, location, and even the time of the day. In a nutshell, they know who, where, how, and the how much of all things paint related far better than their competitors because of the sheer amount of data at their disposal as well as cutting edge analytics. The Asian Paints juggernaut possesses such a finesse that its Cash Conversion Cycle (the time taken to convert investments in raw material to cash flows from sales) is less than half its nearest competitor; it’s almost one-tenth that of Akzo-Nobel, the world’s second-largest paint firm.


India’s largest private bank had chosen early on to not enter the crowded scene of lending to corporates through (borrowed) consumer savings; instead, it aggressively captured the transactional and cash management business for corporates. This happened when it chose to shun the beaten path and adopted a core banking system which was a fully integrated online solution in the 1990s. This first-mover advantage in an era where few even knew about emails or the internet played spectacularly into HDFC Bank’s hands. The doors for instant transfers and a goldmine of data were opened, which would become the backbone of HDFCs market domination. Since their real-time settlement systems meant that managers would not have to run around for cheques to be deposited and processed, HDFC Bank captured the lion’s share of corporate deposits used for transactions and salaries. The next advance would cement HDFC Bank’s reputation as legendary and would herald its supremacy in capital markets’ cash management. In the late 1990s, while shares were traded digitally in real-time, the payment cycle was manual, which took around four days. HDFC Bank’s entry changed this to be instantaneous, and the entire ecosystem of the stock markets- the trader, exchanges, brokers etc., thronged to the bank.

The bank phenomenal capture of the cash management side of things means that it depends on the least proportion of savings accounts amongst major banks (in jargon, has the highest CASA ratio). The result is a significantly lower cost of capital for the bank (since savings accounts need to be paid significant interest on, as against current accounts) compared to its competitors. This would lead to a further boon for the bank- since it could borrow at low-interest rates, it could lend at lower rates to safer investments, which enabled it to tide over the Non-Performing Asset (NPA) crisis brewing since 2008 with ease. Thus, it should come as no surprise that the bank is also proving very resilient in facing the Covid-19 crisis. The bank has continued on the same path since, whereby it was the first in India to launch mobile banking. It then ventured strongly into Point of Sale (POS, i.e. card swipe) machines early on, and carefully expanded into retail banking. Sensing an opportunity in the increasingly prosperous rural part of the country since the late 1990s, they also aggressively marched into semi-urban and rural areas. As Saurabh Mukherjea puts it in his book Unusual Billionaires, “Other than its conservative, risk-aware culture, what distinguishes HDFC Bank from its competitors is the management’s ability to use technology in the broadest sense of the word—hardware/software systems and processes—to create a unique offering.”.

Garware Technical Fibres

Unless one is involved in aquaculture or the sports industry, it’s highly unlikely one would be aware of Garware Technical Fibres. However, that does not stop it from being something of a global monopolist in fishing ropes and nets. From Norway’s frigid waters to the sunny Arabian Sea off the Gujarat coast, Garware’s fishing textiles are the number one choice. The secret to their success is again, application-driven innovation. The firm was one of the earliest entrants into polymers in India, which imparted it with an in-depth knowledge of the polymer production process as well as business. It then built on the same by erecting an in-house Research and Development unit as early as the 1990s, and it decided to compete primarily through innovative products in a teeming space. They did this by developing products focussed on customer needs, the sine qua non for which was constant involvement and data collection of the customer from the top to the bottom. Thus, specific needs such as addressing environmental concerns or even nets which can withstand attacks from seals can be seamlessly developed and sold. Garware Technical Fibres’ fuses technological prowess with a customer needs centric approach to deliver inimitable market power in its focus sectors.

IV. Bottom line: The Masala Mix for a Connective Company

Today’s market leaders are all examples in and of themselves, and almost all of them use technology to create or strengthen their economic moats. One could go on and on- Non-Banking Financial Corporations (NBFCs) like Bajaj Finance using cutting edge analytics (online, and offline) to assess creditworthiness for those whom banks would be wary to lend; Chemical companies like Alkyl Amines becoming large, oligopolistic firms in specific chemicals by their constant zeal to perfect manufacturing processes; as also quick turnaround times of Dr Lal Pathlabs achieved through analysing customer footfalls. Technology has been at the heart of dynamic names known and unknown, with market leaders often having reached their position through bold technological use.

One key observation here is to notice that even though these companies are technological in a deeply intrinsic way, they are not selling tech-based products nor services. Their adoption of technology as a keystone in the company DNA is somewhat intangible- it’s a mould than a method. It is this feature of making technology endogenous to the entire conception of the business which makes certain firms unassailable in their lead. They can offer better solutions to customers, target them better, enhance their efficiency, and scale-up more comfortably. In a nutshell, connective firms know what to make, whom to target, and how to do it much better than others. While all of these benefits can be crunched up in numbers and factored in, the last piece of the puzzle is more idiosyncratic. Connective companies are the most likely to be industry disruptors; they’re the ones most likely to change the game. They have turned conventional wisdom on its head- where old, established firms are the maverick revolutionaries in the business.

A second observation is that connective companies are rarely do-it-alls; they concentrate on niches they can fill and use their insurmountable perfection in one niche to slowly move to a closely related one. Just as how HDFC Bank’s rise to success was its cash management skills, connective companies tend to have only one or two areas of absolute domination, which reflects in their capital allocation. This is most acute in the speciality chemicals space, where entire empires such as Alkyl Amines or Ultramarine Pigments rests on one or two specific molecules and successive growth happens in their precursors or forerunners. This extreme specialisation is a contributory cause for their success. They do just one thing and become unbeatable at it.

Finally, John Kay’s words from his book Foundations of Corporate Success ring loud- “sustainable competitive advantage is what helps a firm ensure that the value that it adds cannot be competed away by its rivals.”. He further elucidates, that such an advantage can either come from “distinctive capabilities” or “strategic assets”. While the latter contains the more tangible side of things such as Intellectual Property, concessions from the states etc., the former comprises of three elements- Brands and Reputation, Architecture, and Innovation. From what we can gather, the relative importance of distinctive capabilities will continue on its path of upsurge. The relationships between its three elements will also see innovation underpinning the other two while existing in its own right, with all three becoming further ensconced in an ever-tighter web. As we have already seen, the synergies between the three elements have innovation as its lifeblood- a brand which innovates and is innovated, an architecture which innovates and spurs further innovation, and innovation being guided by the other two while guiding them as well.

V. Alea Iacta Est (the Die is Cast)

All change has inevitably warranted its own set of opportunities and challenges. As the wheel of time progresses, there are spokes which portentously bubble up to the future and those which tumble down into a sepia-tinted past. The connective company is no different. Even though it ushers in prosperity, progress, and perspicacity, it makes demands upon the economy which require astute management. Our policy environment needs to be mindful of such realities and take careful steps towards a better future, instead of relying on outmoded tools based on archaic presuppositions. In this regard, how we keep the playing field level while not damaging our engines of growth would require far more intricate praxis than before. The past cannot, and should not, be the blueprint of our future.

Karishye Vachanam Tava (I Shall Do as You Say): Contracts and Compliance

The Economic Survey of 2019-20 analyses India’s Ease of Doing Business rankings, which reveals that it is a persistent underperformer in a few related key areas. These are- starting a business, compliance requirements, and enforcement of contracts. India takes more time, more procedures, and possibly more bribes to do these three compared to peers. This leads to a seeping sense of uncertainty and frustration which deters genuine partnerships from fructifying. A modern supply chain has hundreds if not thousands of associated firms connected - not only financially but also legally. The common currency here is trust- a sense of security that if something does go wrong, there can be redressal. Smaller businesses must be encouraged to form relations across the size spectrum, whereby they can share in with the gains of the big while being a source of the same for the small. A broken contracts system breeds reticence in an entrepreneur, drastically reduces the chances of the firm finding a niche and growing, while also limiting his involvement in Global Value Chains.

A choked judiciary, unruly tangle of antediluvian legislation, and a moribund bureaucracy serves as a recipe to undermine this trust across the economic system. Even as the Union Government rolled out four comprehensive Labour Codes to replace a panoply of 29 enactments, it’s a drop in the sea. The first prescription would be a system of Pan-India single-window approvals, with clear timelines. Accountability must be ensured whereby whenever files don’t move, specific reasons must be given, names be public at all times, and appeals be conducted on a bureaucratic level itself before courts are involved. The second would be to rehaul the contract system to permit a rich menu of contracts between firms to make relations such as supply, distributorship or franchising easier. The third is the most obvious- expand and enhance our courts, with clear goals of bringing down the time it takes to enforce a contract down from the ridiculous presently upwards of thousand days to within a month. This would provide all stakeholders with a sense of certainty and safety, greasing the wheels of business with trust.

Avoiding Abhimanyu: Keeping the Playing Field Level

India is currently in the process of instituting a robust data law framework, shedding years of regulatory indolence. This comes closely following the European Union’s General Data Protection Regulation in 2018, and in a world where the cyberspace is a battleground between States. With the doctrines of privacy, data sovereignty, and data ethics evolving, there exists a tightrope to be tread regarding how businesses use data. Many market-leading firms have used the lack of regulation to build up their data analytics arsenal, providing them with a secure base to transition into regulated cyberspace. If data laws are too dogmatic and do not take this regulatory inequity into account, the stock of available data of existing players would be much greater than the ones to come. This resultant regulatory inequity threatens to stifle competition, as future firms start with a disadvantage. While indeed issues such as privacy have a countenance of utmost seriousness, an overzealous policy regime would inadvertently give large players a permanent, unearned advantage. A careful, balanced look at the economics of data along with its ethics is crucial for our economic future.

Antitrust regulation of internet giants is another minefield, where the chances of committing follies are too great. One is loath to see commentators comparing internet firms to Standard Oil of the 19th century, believing in two invalid assumptions. The first is myopically holding that ‘breaking up monopolies’ would solve all problems currently present. The second is believing that all monopolistic outcomes are made equal, i.e. a monopolistic market cannot emerge without some palms being greased. Both of these assumptions rely on an inadequate understanding of the products being talked of. At the core of internet platforms are the idea of the Network Effect. To explain, let us take the example of Microsoft’s Windows Operating System, the OS behind most of our computers. One might ask- why does Windows dominate the OS market so decisively? The answer, in this case, isn’t necessarily technological superiority (as fans of Linux might angrily affirm). It is because once Windows did get a sizeable enough share of the OS Market, those who purchased it reaped increasing rewards brought by ubiquity- familiarity, ability to use the same programs, etc. Meanwhile, someone thinking of buying a novel OS, regardless of its perceived intrinsic superiority, had to contend with huge negatives- limited interoperability, low familiarity, inability to use the same programs, etc. To take another quick example, one of Maruti Suzuki’s competitive advantages is its massive network of service and support. Hence, even if a competitor may sell a better car at a better price, you would think twice, with the fear of being stranded on a road with no help and a dead car toying with your head. On the other side, a franchisee thinking of switching to something other than Maruti would wonder of the idea’s feasibility- if there are few non- Maruti cars on the road, where would the business come from? The result is fewer people buy non-Maruti, and fewer franchisees opt for non-Maruti; with both driving the other.

Thus, network effects can often lead to a monopolistic outcome being the natural equilibrium. This is particularly acute in network-based products- messaging apps, social media, peer-to-peer lending etc. Thoughtlessly breaking up these monopolies would only lead to consumer inconvenience and new ones replacing them; with the fundamental forces of human behaviour impervious to being wished away. The view that monopolists or oligopolists must always be ‘broken up’ is often ossified when it comes to many sectors, as they are based on equating the unequal; thinking kerosene behaves the same way as telecom does is an absurdity. With most of our market-leaders being essentially technology firms, the entire rubric of how a business drives itself forward has changed. As moats become technological and data-based, this facet of the issue will only intensify. Our antitrust laws and perspectives must adapt and consider these nuances to ultimately make decisions in the consumer’s interest. This also means much more focus on equitable data access, ease of market entry, regulatory sandboxes, and a close watch on the exercise of pricing power. Our education system would require a significant reorientation towards what the market demands. Simultaneously, our smaller firms would need concerted help in aligning themselves to practices necessitated by a world dominated by a few players. Monopolistic markets are here to stay, and we would progressively need to learn to make the best of it.

Shunning Demagoguery: Pragmatic Political Management of Market Concentration

The study of economic inequality has re-emerged as one of the trends in vogue within our public discourse, ever since the global growth turned anaemic in 2008-09. As we have seen above, the forces causing market concentration whereby a larger chunk of profits are being cornered away be fewer players in India are by and large ‘clean’. In general, these firms have fought to the top using par excellence innovation and strategic decisions. Market veterans Saurabh Mukherjea and Harsh Shah’s blog post Behold The Leviathan: The Remaking of Indian Capitalism throws up a pretty strong punchline to summarise- “The 20 most profitable firms in India now generate 70% of the country’s profits, up from 14% thirty years ago. The rise of India’s networked economy (highways, cheap flights, broadband, GST) has allowed large, efficient firms to use superior technology & better access to capital to squash smaller competitors. In line with what is being seen in the US, the growing dominance of a handful of very large companies in India is changing the template of capitalism in India.”. The older, crony monopolies depending on sleazy regulatory arrangements seem to be history for now. However, when these newer players are conflated with the dirty old ones, problems arise.

We have already discussed a more technical genre of changes which would be desired for us to ably shepherd the modern Indian economy. However, one of the big threats to India’s economic future could be a popular backlash to modern, ‘clean’ monopolists if they lose the battle of perceptions. In times of stymied growth, the populace might mislabel connective companies as connected ones based on experience and political opportunism from certain sections. Clean, productive, and socially contributing businesses would see their position attributed to cronyism. The pressure then could cause something similar to the disastrous vicissitudes of Latin American populism, where predictable responses to the uproar for wealth distribution spell doom for economic growth. India is not the only one vulnerable to self-destructive demagoguery, it has become a global response, as Dambisa Moyo writes in Edge of Chaos- “Across the world, panicked politicians are pivoting to inferior political and economic models: more trade protection, less globalisation, more capital controls, fewer capital flows, more siloed corporations, and more state control… Crucially, these policies are taking nations not only off the path towards democratic capitalism, but also away from solid economic growth.”. This is an outcome India can ill afford; growing our incomes and providing our youth with jobs is the only way we can build a better society.

Hence, both firms and the State must realise that the messaging around inequality is fundamentally political, rather than belonging to the sterile erudition of economic science. It is a battle of narratives, with two pictures vying to capture the popular imagination. One is the dominant narrative in countries like South Korea, where the economy is dominated by firms who provide consumer value, national pride and jobs through backbreaking work. The other is the old leftist favourite of an economy captured by a den of tycoons skimming off the people in cahoots with politicians and bureaucrats. If the latter wins, the global trend of increasing government intrusion in businesses would stamp its foot in India as well. Its consequences would be anything but good for all of us.

Therefore, firms themselves must engage with the public with a human touch, and tell their stories as they’d like them to be told. This can only happen when there is a frank admission that businesses form a pillar of the society as well, and cannot afford to remain distant from social conversations. The issue with that is exemplified by the uproar a Tanishq advertisement led to. Instead of stepping on matters with which they have little relation, firms must decide what exactly does their brand and story wish to symbolise and why. Rather than preaching from pulpits on matters over which they have no locus standi, they would need to show the population their struggles for success; they would need to tell us all why they won out in the business world. Doyens of the market, such as Amul, have understood this imperative which reflects in its socially conscious (but not sermonising) outreach and thus it enjoys popular trust. Not only technological superiority, but a company’s values, ethics, and its Corporate Social Responsibility would need to be communicated amply to allay any fears which may be inflamed by eager elements. In short, your size isn’t the problem for the common man, it’s an issue when he thinks that your size was reached through unfair means.

Nurturing this trust as well as keeping our economy robust also needs an ‘economic secularism’- ensuring that businesses have equitable interfaces with the government and regulators. The State must actively cut undue corporate influence amongst its offices to keep these relations tidy and transparent. This is doubly essential to avoid larger firms from becoming connected companies, and ushering in a new era of regulatory capture. One must realise that our regulators have shifted from being gatekeepers to being referees, and a sold-out referee tarnishes the legitimacy of the results of the game. These regulators and government offices have the keys to maintaining and enhancing India’s economic dynamism by reducing barriers to entry and keeping the market fight a fair one. Not only does their expertise need to be irreproachable, but so must also be their reputation and functioning. As the private sector and the government come closer in deliberation, upholding the former’s sense of principled detachment would be an effort of utmost paramountcy. Countering the spectre of structural corruption, rather than transactional, would be both Herculean and Sisyphean at once.

Hopes and Green Shoots

While India registered its first ‘technical recession’ in the wake of the Coronavirus pandemic, it also recorded a 15% jump in annual FDI numbers. While how exactly the recovery would pan out is still an unknown, the shock of the pandemic would mean that connective companies will only gain over their less able. This market consolidation process seems to be afoot already and would accelerate the trends elucidated above. In this technological world, we would also have to change the way we view ourselves. For far too long have we had a rustic, almost sadistically romanticised view of the Indian economy being a perpetual laggard requiring ‘protection’ from its competitors. Even today, the scent of economic reforms provokes anachronistic anxiety amongst many, whereby the entire process becomes high in chatter and low in substance. These are self-imposed limitations; these ideas past their expiration date are chains we have bound ourselves in. The Indian economy has fundamentally transformed, and we must keep the momentum going for the greater good. As we await a vaccine, let us give ourselves a dose of healthy realism. Let us free the parts of the economy which are still burdened with unnecessary regulation, and let vigorous competition be a virtue. The problems of the economy are very much solvable, and our focus should now be on allowing easy entry, hassle-free functioning, disseminating productive technologies and a commitment to keeping everything bound in norms of fair play. As connectivity continuously increases, the dynamics at play would become more pronounced in salience. Jobs need to take centre stage, and our social goals should guide our collective functioning. The challenge in front of us is not merely institutional- getting our regulators more teeth, getting our courts in shape, making our bureaucracy streamlined and niftier etc. The bigger task at hand is to be dauntless and hopeful while the future gets shaped by our actions today. As the Bob Dylan song goes, the times, they a-changin’.


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