Indian Affairs: From Saharan Women To Pinstripe Jackets After 1991


The birth of the Indian reforms in 1991 awakened the self-confidence and conviction of every enterprising Indian. The chains of four decades of license addiction have been broken, and the sheer force of that liberation has unleashed the latent energies of an entire generation. The floodgates have been opened to both established businesses and budding new entrants to raise capital, start businesses and trade globally. India has been in the spotlight of investors from East and West as Japan, the United States and Europe seized the opportunity to participate in the attractive financial and commercial market of India. India. Reforms required political will, courage and careful execution, and India has succeeded in every way. It was nothing less than a landmark event in India’s rich history.

At the time, there were two types of industrial enterprises in India. One was the nationally designed low-tech manufacturing business and the other was joint ventures with global giants that specialize in high-tech products. The bureaucracy was at its peak and the number of processes in the bureaucracy was intimidating, even terrifying. Some entrepreneurs gave up on trying, some spent most of the time frequenting Delhi rather than focusing on their business and foreign investors tried to enter the country on their own and gave up due to bureaucratic hurdles . At RPG, we had almost fourteen joint ventures with Fortune 500 companies. The lenders were all public sector banks and the development banks were leading the pack.

That all changed in 1991. Soon we started to see IFIs opening shops in the Mumbai business center around Nariman Point. Well-appointed modern offices with pinstriped bankers have become the talk of the town. No company worthy of the name could resist the temptation to engage with these new boys in the neighborhood. Red herring fliers were seen everywhere as IPOs started daily on Dalal Street. Forms were distributed on every street corner. The financial dailies that barely survived this period have been revitalized. Currency gurus became precious commodities as wide-eyed financial professionals considered the implications of current account convertibility. It has become a dynamic place.

As a very diverse group of companies, we had to adapt quickly to the new scenario. In addition to a lot of internal brainstorming, we brought in McKinsey to revamp our portfolio and prepare it for the future. The end result was a set of extremely difficult choices that we had to make. Leave a dozen companies and focus on a few key areas. The logic was that in the liberalized scenario it will be important to have a scale to compete on a global scale and if you weren’t among the best in every sector one of them would perish or be devoured by a more important player. We ended all of our joint ventures amicably with our partners, with the exception of one which is still going well today. The decision turned out to be correct given the development of business in India over the past two decades. The only addition for us was IT which brought Indian industry to a new level and whose credit again goes to the 1991 reforms. Looking back, if India is now seen as having the potential to be among the major economies in the world, the 1991 reforms are arguably the event that made it possible.

(Harsh Goenka is the President of RPG Enterprises. The views expressed in this article are those of the author.)

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