He believes in doing things quietly and ethically. And, he has been a role model to many in many ways. Under his captaincy, Sundram Fasteners became the first Indian manufacturing company to enter the Chinese market. This TVS Group company has not witnessed even a day’s strike. The 78-year-young Chairman and Managing Director Suresh Krishna speaks to The Hindu on a range of issues. Excerpts
What is your take on the country’s economy at this point in time?
There is a view that the country is not doing well. This is not true. In my opinion, Prime Minister Narendra Modi’s government, as it is, has done or proposed lot of changes - whether it is GST, Swachh Bharat or cleaning up Ganges. I think the economy is looking better and more stable. And, it is not buffeted by all kinds of other international pressures happening. Only one year is over for Mr. Modi. Giving a scorecard at this time is not correct. I will personally give him three years to complete and then tell if he has come to my expectations or not.
I am quite happy that things are happening. And, I see revival. Foreign investments are coming. Of course, there are hiccups. People are realising…if you compare today with all happenings in South East Asia…India is more stable and has forward-looking policy than most other countries. China is slowing down slightly. People who can make investments are unsure exactly where to put money. Europe is dead. The U.S. is there. But it is growing at one or two per cent, which is very good compared to their denominator of GDP. How much can you invest in the U.S.? You need labour arbitrage and investment arbitrage. I don’t see any other possibility other than India.
But, we can’t lean back and say money will come to us. Mr. Modi has done a fantastic job. He is not afraid to go anywhere seeking investments. By sitting in New Delhi, he is not going to get it. He visited Japan, Europe, China, and the U.K. He just visited the UAE. He keeps on travelling and makes others feel that we are wanted. These people are not doing us favour. They want us. If you put this in perspective, what Mr. Modi is doing is good. What bothers me most, however, is that the Opposition parties are opposing just for the sake of opposing. At some point of time, BJP should get some kind of consensus, whether for land reforms or GST. If they get one or two things done, then the international forum will have more confidence. No doubt, the Opposition should oppose those policies which are detrimental to the society.
What is your view on the Make-in-India initiative of the Modi Government?
To make the ‘Make-in-India’ initiative successful, Mr. Modi should really solve infrastructure problem such as power. No country in the world has advanced industrially without power. You cannot run the industry on oil or diesel. You have to sort out power, road, bridges, ports, airports. You do what you like. I don’t care whether you give it to the private sector or others. But don’t keep on dithering. Why there is so much disparity among the states in development. Many of the states are thinking politics is important and that others are incidental.
On the infrastructure front, more often the problems relate to last-mile hitch. Projects worth several crores of rupees are stalled due to a few km of pending work.
Parliament, State governments and judiciary will have to take up the issues. You cannot hold public to ransom. I think the States have to do. All the States are convinced that GST is a good thing. But still, they are haggling. BJP government proposed it. Why should I pass it? At some point of time, they should come together and pass it.
What is your view on the Monetary Policy stance adopted by the Reserve Bank of India?
I have a great respect for the RBI governor Raghuram Rajan. He is doing the right thing. It may hurt you a little bit. But, it is all progressive. You cannot have everything your way. If something goes wrong, they will blame him. You can give certain amount, but not much.
Do you think we have over-capacities in segments such as automobile and cement? There is a slump in demand for automobile and cement sectors. Prices are not dropping in cement, however. Is it not a paradox?
There is a capacity built-up over a long period of time. Indian automotive sector is currently producing 3.2 million cars per annum. It has the potential to do 10-12 million cars per annum at least. Eventually, we will get to it. Now people are buying two-wheelers, cars and travelling. Look at the profile of people flying now. It was unthinkable 30-40 years ago. Everyone has mobile phone and modern gadgets. With all these developments, it takes time. India, being what it is today, will evolve over a period of time. Look at the kind of motorcycles we are producing. We are the third largest manufacturers in the world. Automobile is consumer-driven. Cement is totally not dependent on housing, but infrastructure development. Government cannot find all the money to do it. Foreign investment has to come. What is method to go for (BOOT or BOT)? There are people waiting to invest. But land acquisition becomes a problem. Eventually, it has to be sorted out.
Road toll has turned out to be such a sensitive political issue…
Eventually, you should do it as a business proposition. It has nothing to do with politics. There are two ways of doing – the German and the U.S ways. In Germany, there are no tolls. In the U.S., all road of significance has toll. If private investment comes, road will come. And, they have right to collect money. It is an investment/industry and not charity. You cannot build roads on charity.
Do you feel that the ease of doing business has improved in India?
It was a controlled economy from 1962-1991. And, it was miserable. I had to fly to New Delhi regularly to get even small sanctions. From 1991, I have not gone to New Delhi. The situation has eased up reasonably. China is not free of bureaucracy. The officials there are under compulsion to show the progress of employment generated, duty paid and tax collected. Every officer has quota fixed. These are not here in India.
What in your views are the short-term measures needed for the economy?
The GST will be a big boost. Company law is getting tighter and tighter. As long as everyone follows it, there are no problems. India got enough power generation capacity. Transmission and grid problems can be solved. Even in bureaucracy, inspecting agencies…if they have very clear norms…it will be a huge thing for industries…If we show little bit of progress in controlling corruption, we will go a long way in the minds of people.
What will be impact of the devaluation of Chinese yuan on India?
It would not affect us now. Our trade with China is not so huge. It would not give us a jolt. I like the way India has been handling the issue.
What will be your advice to the younger generation?
Now suddenly, India has opened up. Young mind will take advantage. People like us will take time to get out of our skin. For us, values are first and risk-taking comes later. As generation changes, as people move out, younger people are ready to take over. Look at Bengaluru, Hyderabad and Gujarat. Younger people are more dynamic, see opportunity and are prepared to take risk. More space and money are available. India is going to be the future. One has to develop risk-taking ability like entrepreneurs. You can’t be complacent. Once India becomes internationally competitive large economy, your ability to manage international competition and internal pressures will be completely different. You have to adapt to the situation. Confidence among the younger generation is on the right track. We are not a dumped country.
Start-ups are commanding excessive valuation. What is your view on that?
It is a risk, the market is taking. Market has to decide whether it is correct. What is your problem? Look at Apple or Amazon. You cannot comprehend valuation that was done some 10 years ago. If there are 10 start-ups, nine will fail. One will count.Some of the e-commerce firm may go bankrupt. Taxi hailing Uber in the U.S. has changed the game.
It is not only entrepreneurs even the public has to take risk. Otherwise, there will not be private sector at all. Make up your mind whether you have to play the game or not. Government has not mandated you to invest in start-ups.
What to do you think of initiatives such as smart cities and digital India?
Manufacturing sector is built on brick and mortar model. Indian smart cities need manufacturing sector and IT just like the U.S. It is not Singapore or Colombo were everything can be IT alone. India is too big for that. So much infrastructural and transport facilities have to be built. What are you going to do with IT alone?
