Small process changes matter, not big bang reforms

– Anand Mahindra

Giving a thumbs up to the BJP Government, the leading industrialist, Mr. Anand Mahindra, says Prime Minister Narendra Modi’s focus on setting processes right is more important than big bang reforms.

Anand-Mahindra-photo
Mr. Anand Mahindra, CMD, Mahindra Group

“Up to now I am very heartened that what I am seeing happen is that somehow the PM has signalled that ‘I do not want delays, I do not want red tape’,” Mr. Mahindra, who is the Chairman & Managing Director of the Mahindra Group, told PTI Economic Service in an interview.

Sharing his views on the new government, Mr. Mahindra added: “He (Modi) is certainly saying that ‘I want decisions to be taken’ and I think that’s what is far more important for India than big bang reforms.”

Elaborating, he said: “I have always said that more than big bang reforms, it is every day what is happening, changing on the ground (that matters). It is processes that are important.”

He said there have been changes that are making processes efficient, removing barriers to small traders and making small to medium and entrepreneurs find it easier to do business. “So I am delighted that he (Modi) put a very special focus on a target that we must move up the ranking on ease of doing business. And am I finding changes? Yes,” he added.

Citing the Defence sector as an example, he said: “We dismantled a JV (with BAE) because we ran out patience. Nothing was happening.”

While sounding cautious, Mr. Mahindra said that, with a new stable government in place, India is poised to become the investment destination again.

Mr. Mahindra further said: “I have been talking to bankers both here and overseas, all of them were waiting for what would happen after the elections…all the signs from India (now) are so strong, I have not met one sovereign fund or private equity player or investor who has not said that we have changed our fundamental stance on India. The perception of the world is the bus is moving again and how do I get a seat on it. That’s the perception. So you are going to see no shortage of liquidity for accomplishing whatever India needs to do.”

Explaining why the homegrown $16.5 billion group has had a history of short JVs, he said: “JVs in the old days, Indians used to think they are like ‘we will walk hand in hand into the sunset, forever’. That was only because the JV partner had no choice, they were not allowed to invest in India. The moment they were allowed to invest, JVs became vehicle of convenience.”

Citing the example of the JV with Ford, Mr. Mahindra said it was because the US auto major did not know India then. They needed somebody to ‘escort’ them into India. “That’s why we made the Escort car,” he quipped.

Explaining the gains that the M&M Group had from such partnerships, he said: “What was it for us then, people forget. Before we did the Ford JV, we only made soft top vehicles. If we hadn’t had that JV, we would never have been able to make Scorpio. The same facility that made Ford Escort vehicle in Nasik, the same work force, the same engineers built the Scorpio and assembled them.”

He said the same was also with the French auto major Renault. “We went to a different level in quality (after Renault JV),” he said, adding that for emerging market companies, JVs were learning platforms.

– PTI Economic Service