Public Life and Businessmen Shri Pravinchandra Gandhi Award for Excellence in Public Life

Ladies and Gentleman,

I am honored by the Rotary Club of Mumbai bestowing the Excellence in Public Life Award on me. It is a special award for three reasons. First, it bears the name of Shri Pravinchandra Gandhi who was an exemplar for all of us. He had retired as the Chairman & MD of Dena Bank, had been President of FICCI and IMC, President of Bharatiya Vidya Bhavan, Indian National Theatre, Indian Newspaper Society and the Chairman of PTI and of the Janmabhoomi Group of Newspapers. In 2002 he was awarded Padma Bhushan by the Government of India. Second, I am receiving it a year after Shri Viren Shah, who is very close to me, received it. Third, I am a Mumbaite at heart. The place one grows up in is the place which grows on one. Many of my peer group, relatives and friends are in Mumbai. To be honored at home is special.

I was born into public life. Business came later. In the 1930s & 40s, almost every member of my family was in jail for participating in the freedom struggle. My grandfather was considered the fifth son of Mahatma Gandhi. My father was first in politics then in business, being a 3 time MP between 1957-72. My uncle, Ramkrishnaji, a member of this Club, also devoted more of his time and efforts to public life than to business.

So, though I did not enter into public service till 1986 when I was appointed Chairman of Indian Airlines by Shri Rajiv Gandhi, being a Bajaj and a grandson of Jamnalalji meant that one stood for certain values.

In early 70s I was threatened with arrest for producing scooters much in excess of our licensed capacity. I remember telling the MRTP Commission that going to jail for doing ones national duty was not something that was unfamiliar to my family.

We did not support the emergency. We were also asked to disassociate ourselves from Shri Viren Shah, our partner in Mukand, and wrongly jailed for his alleged involvement in anti-emergency activities. But we did not. Not because we are exceptionally brave but simply because we have a family legacy to uphold.

I got involved in CII from the late 1970s and became its President in 1980 and 2000. Similarly, in the Automobile Association and MCCIA. Since then I have been articulating the business point of view as I see them. I also got involved with the World Economic Forum and started unofficially representing India to the world. Similar has been my involvement with NYSE Euronext, Brookings Institution in Washington D.C., and the global advisory board of the HBS.

In 2003 I was appointed Chairman of IIT Bombay and in 2006 became a Member of Parliament.

All this has contributed to my having a platform to express my views largely on industrial/economic issues and broader social concerns. I accepted these platforms because I believe businessmen should engage in public life not only because of family legacies but due to enlightened self-interest and as a civic obligation.

Whether they desire or not, like it or not, businessmen, especially big businessmen, are in a way in public life of any nation. Willy-nilly their decisions affect large numbers of people, be it as consumers, employees, shareholders or as large contributors to the economy. Their views and decisions on the economy matter. Also, since their businesses are impacted by government policies, be they macro or micro policies, they need to engage with the government at various levels.

Though there are people who think that businessmen should focus on only economic activities and have only a profit motive, and little social responsibility, this debate is by and large settled. The recent case of Rupert Murdoch’s “News of the World”, a hugely successful enterprise, closing down due to a public uproar about its ethics, makes it clear that business survives on public legitimacy and all its profits and economic strengths ultimately rest on its social legitimacy.

Unfortunately, the present engagement of and the quality of engagement of businessmen in public life in our country leave much to be desired. Like politicians, businessmen are not respected in society. This was not always so. In the Pre-Independence era businessmen were eminent in public life. Be it Sir Phirozshah Mehta, Sir Jamshetjee Jeejebhoy or JJ, Shri Jagannath Shankarshet in Mumbai in the 19th century or a host of businessmen who backed Gandhiji and the Congress in the 1930s and ‘40s. Gurudev Tagore in his essay “Greater India” wrote a century ago that we had survived as a civilization for so long because civic society had always assumed responsibility for the society and not left it to the ruler of the day. Be it irrigation or education.

If despite all our public follies we continue to make progress, it is because most of our business and society still walk to a different rhythm than our governments. Our society is nurtured by our civilization, our traditions, our epics, the moral fibre and values provided in our close knit families, even when they go nuclear. Indian mothers teach their children to be honest, hardworking, compassionate and just. Most Indian businesses are family businesses like businesses the world over. That most of India lives in rural areas and is middle class in its thinking, valuing education and hard work, helps.

Developments in the US, Europe and India point to the bankruptcy of governments, and the risks posed by high public debt and fiscal deficit. In our country it has led to inflation, which hits the poor and fixed income earners the most.

I believe time has come for business to engage more actively and more purposefully in public life to ensure both economic and social development.

In 65 years of independence we have allowed governments to mismanage the economy and society. Business is the only segment of a society which has the economic strength to differ from the government. It is not easy but it is possible. Nothing good is ever easy.

There are two models of doing business in any country. First, is in competing in the market place. Second, is in cozying up to the government, that is crony capitalism (to loot the public purse). Competing in the market place is a difficult task. But it is a sustainable and ethical model of business. In this globalized world it is also an immeasurably larger opportunity.

At present, exports account for 35% of Bajaj Auto’s sales and we have barely 3% of the global market including India. The IT industry’s development in the last two decades exemplifies the potential of Indian business to compete globally and in doing so bring prosperity and hope to the country.

Yet, there is the second model which also exists in the developed world but not in the vicious form it exists here. Much of the government contract business, mining and natural resources, road building, real estate business, is rife with this. And this is the side of business that takes place every day. Even in Telecom and Coalgate we have seen this.
Thus, Indian business has to choose. If it chooses the first business model it can gain public faith. Else it has to live in the shadows. With all its wealth, but little public legitimacy.

Business in India therefore has a huge role and responsibility. Because it knows how to do things. It has the financial and intellectual capability to do things. But it has to have a broader conception of business.

The first task is to successfully grow our businesses profitably which results in creation of wealth and in increasing direct & indirect employment.

Second, in our business we should be fair in our dealings with all our stakeholders.

Third, we should pay our legitimate taxes and resist corruption.

Fourth, we should engage with the community in as many ways as we can. As is said,
“You make a living by what you get; you make a life by what you give”. When we engage with the community, it is not simply money that we give, but direction and integrity of purpose. We should harness private initiative and money for public purposes.

We should also be conscious of the level of poverty and inequality in our society and avoid ostentation and vulgar display of wealth. We had such a tradition but it is fraying.

There are two other issues that I would like to talk about.

1. Business funding of elections.
2. Business engagement in politics.

Political parties require funds to fight elections. In our country, they are mostly funded by black money. Unless clean funding is available to them the corruption we see in government will not reduce. I believe we need to introduce public funding of political parties but till such a measure is enacted business needs to fund political parties in an open, transparent manner. At Bajaj group we have been doing this for Lok Sabha elections.

It is the constitutional right of every citizen to participate in politics. Ordinarily I would not advise businessmen to get involved in party politics. At this juncture however I would encourage businessmen to get into politics. But, they must engage in it as a form of public service, like Sir Jamshetjee Jijibhoy did and not like many current businessmen politicians who do it to further their business interests.

We are at a crucial juncture in our history. We are seeing all around us where corruption, populism and vote bank politics has brought us. It is tearing apart our economic and social fabric. The well-offs’ disengagement from politics too has contributed. Witness the low turnouts in elections in Mumbai.

This is our land. We have lived here. We will live here. We have much at stake. Withdrawing into gated communities is not an option, as 1992 and December 2008 demonstrated to us.

I enjoin you to engage with society and in public life. It will be a long and difficult journey. But as Churchill said, in this “never flinch, never weary, never despair”.

Thank you.