The Business Asks and how it differs from People Ask
By: Amit Bhushan Date:23rd Feb. 2015
The businesses in India are back to lobbying with the government on their 'asks' for the support extended to the incumbent party during elections. It seems that given the media hype, the corporate sector is willing to have staggered their demands i.e. a few during the financial allocations/budget and rest during the course of the year where they can look for additional grants or tax breaks, financial restructuring support or even equity infusion from the government backed financial institutions or venture firms. That they are ready for a fundamental change in the way business is likely to be conducted seems to be way of radar, at least for now.
Accordingly one can find focus to revive 'capital markets' without any demand to change in accountability for corporate management in case the financial projections of the corporate go hay wire and they default with financial institutions. While with increased Land related activism in media, some of the corporates are likely to shift to industrial parks, however we still lack focused parks where industry can enjoy some “common facilities” such pollution control and sanitation/waste disposal, water recycling or dedicated power back up or generation plans. The haphazard development of parks are one of the chief causes of high degree of failures of control and resultant dissonance with communities is a given, however a lack of movement on this count itself is an indicator that industry is not attempting to change old ways. Fragmentation of procurement of common raw materials and lack of efforts to evolve metrics on quality standards on output points to continuance of 'old ways' by the 'old school', otherwise in most countries, industry will attempt to cover their legal risks towards 'contract fulfillment' (limitation of liability).
Businesses in India, instead of attempting to have a flourishing operation for delivery of products and services to people, prefer to act as project contractors or sub-contractors to government or quasi-government bodies. In part, this is because of high level of intervention of the government sometime in manner of Tax breaks to achieve regional development goals which simply tends to uproot industry from one location to another, at another place there may be government subsidy to industry to support consumption needs of the people and in some places it may be export promotion performing the trick. In such a scenario, a project operator for 'product or a service manufacturing company' is never sure of the quantum of demand or his company's profitability or vulnerability. We do not see much noise around these aspects by the industry, however Industry still clamours for “pro-growth policies” which is often a cliché used for government raising resources for putting up more projects where by industry gets opportunities to supply more or it is dis-investment opportunities where industry can take a look to take-over of the government projects where they are comfortable about demand and policies.
The growth & profitability on the back of innovation is far from imagination of industry is most clearly visible in the form of lack of expansion of the food sector especially for processing companies. These companies do not face 'lack of demand' in a market place like India especially if they can set up a cost effective supply chain and where product satiates the taste buds of the people. That we have huge untapped demand is a given as one still cannot get “packed Lassi” at places like India Gate (one may get lot's of ice-cream though) or Biryani on demand in the ready to eat segment (though one may get pizzas in cities), even though one may hear the talk for the same and organizations like Akshay Patra may have already shown the way to service mass markets in a cost effective manner (though on philanthropic model). That businesses in such areas are still not flourishing is basically a lack of conviction amongst bankers about ultimate profitability of such models on the back of different states having different policies and models and so a much higher degree of risks. The perceived risk for American breakfast is lower since the states or governments are not getting in this arena, anytime soon. The story about household goods such as kitchen wares, electrical & electronics and general purpose industrial machinery, SOHO related equipments may not be much different.
The discussions around the Industry Asks revolve around most large groups presenting their agenda rather than evolution of a common voice of an industry sector and these are then fashioned as a common voice of the industry sector without much validation, since the group voicing such demands is perceived as the most mature in the field. The real attempts by chambers to group different set of players and put together a representative voice is mostly missing and therefore each player big or small is seen as cutting a separate deal with different political player and for the purpose of political convenience, the leaders have maintained the situation in the manner as it is seen today. With evolution of new politics and new political players in the game each of who have not hidden their national aspirations, let's see if there is any movement to group the industry segments which may all have different perception of things to evolve some achievable goals.
By: Amit Bhushan Date:23rd Feb. 2015
The businesses in India are back to lobbying with the government on their 'asks' for the support extended to the incumbent party during elections. It seems that given the media hype, the corporate sector is willing to have staggered their demands i.e. a few during the financial allocations/budget and rest during the course of the year where they can look for additional grants or tax breaks, financial restructuring support or even equity infusion from the government backed financial institutions or venture firms. That they are ready for a fundamental change in the way business is likely to be conducted seems to be way of radar, at least for now.
Accordingly one can find focus to revive 'capital markets' without any demand to change in accountability for corporate management in case the financial projections of the corporate go hay wire and they default with financial institutions. While with increased Land related activism in media, some of the corporates are likely to shift to industrial parks, however we still lack focused parks where industry can enjoy some “common facilities” such pollution control and sanitation/waste disposal, water recycling or dedicated power back up or generation plans. The haphazard development of parks are one of the chief causes of high degree of failures of control and resultant dissonance with communities is a given, however a lack of movement on this count itself is an indicator that industry is not attempting to change old ways. Fragmentation of procurement of common raw materials and lack of efforts to evolve metrics on quality standards on output points to continuance of 'old ways' by the 'old school', otherwise in most countries, industry will attempt to cover their legal risks towards 'contract fulfillment' (limitation of liability).
Businesses in India, instead of attempting to have a flourishing operation for delivery of products and services to people, prefer to act as project contractors or sub-contractors to government or quasi-government bodies. In part, this is because of high level of intervention of the government sometime in manner of Tax breaks to achieve regional development goals which simply tends to uproot industry from one location to another, at another place there may be government subsidy to industry to support consumption needs of the people and in some places it may be export promotion performing the trick. In such a scenario, a project operator for 'product or a service manufacturing company' is never sure of the quantum of demand or his company's profitability or vulnerability. We do not see much noise around these aspects by the industry, however Industry still clamours for “pro-growth policies” which is often a cliché used for government raising resources for putting up more projects where by industry gets opportunities to supply more or it is dis-investment opportunities where industry can take a look to take-over of the government projects where they are comfortable about demand and policies.
The growth & profitability on the back of innovation is far from imagination of industry is most clearly visible in the form of lack of expansion of the food sector especially for processing companies. These companies do not face 'lack of demand' in a market place like India especially if they can set up a cost effective supply chain and where product satiates the taste buds of the people. That we have huge untapped demand is a given as one still cannot get “packed Lassi” at places like India Gate (one may get lot's of ice-cream though) or Biryani on demand in the ready to eat segment (though one may get pizzas in cities), even though one may hear the talk for the same and organizations like Akshay Patra may have already shown the way to service mass markets in a cost effective manner (though on philanthropic model). That businesses in such areas are still not flourishing is basically a lack of conviction amongst bankers about ultimate profitability of such models on the back of different states having different policies and models and so a much higher degree of risks. The perceived risk for American breakfast is lower since the states or governments are not getting in this arena, anytime soon. The story about household goods such as kitchen wares, electrical & electronics and general purpose industrial machinery, SOHO related equipments may not be much different.
The discussions around the Industry Asks revolve around most large groups presenting their agenda rather than evolution of a common voice of an industry sector and these are then fashioned as a common voice of the industry sector without much validation, since the group voicing such demands is perceived as the most mature in the field. The real attempts by chambers to group different set of players and put together a representative voice is mostly missing and therefore each player big or small is seen as cutting a separate deal with different political player and for the purpose of political convenience, the leaders have maintained the situation in the manner as it is seen today. With evolution of new politics and new political players in the game each of who have not hidden their national aspirations, let's see if there is any movement to group the industry segments which may all have different perception of things to evolve some achievable goals.