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On the 10 point agenda of the Modi government.
I think it is almost superfluous to put the fact at the top of the list that bureaucrats should be encouraged to take decisions without fear. In a way they have gone to the root of the problem of paralysis. The Indian government is extraordinarily large and it is hard to believe and believe that one leader can make all the difference. It is a federal system. In a large bureaucracy you cannot exercise any position change without adding bureaucracy.
That’s why empowerment becomes important. This is a good sign. If you remember, one of the great fears about Modi was to act in an autocratic manner. Keeping the empowerment of bureaucracy at the top of the agenda, I think one should appreciate it and accept that it is certainly not an act of an autocrat.
On dissolution of ministerial groups.
Without making a heavy season about it, he has been the case study for business schools on how to exercise leadership and make an impact in a new job from day one. He is setting a clear agenda and making a clear promise to measure the progress made against that clear agenda. For example, creating an agenda for 100 days would make it clear what the metrics would be to measure the success of that agenda. It is important that every day there is some incremental progress towards that agenda and that progress is communicated transparently. They have prepared their team, which is a focused team. For me, every decision should not be a big bang reform but a sign of proactive decision making and removal of red tape and bureaucracy. And a promise to make decisions even faster in the future.
on the immediate priorities of the government.
In the 1980s, I wrote a column titled ‘Roads to Nowhere’. At that time we were not building enough roads. (In) America’s competitive advantage lies in its highways and its transportation network. They are like blood vessels to the economy and they create employment opportunities. So, in a funny sense, the best thing to do to create an inclusive economy is through building roads, because access to markets or lack of access to markets is one of the most discriminatory things that can happen to the poor. especially for the rural poor. It is not a point that we automatically think of, but roads are a mechanism to create inclusivity in the economy. So, I think, the faster he does that, the better for the economy. There is huge economic data to show that roads (give) boost rural income even more than irrigation. This would help dual income power for families and allow a sort of diversification from dependence on agriculture that creates productivity.
On Indo-US relations.
I have been here (in America) for a long time. Indian elections have generated huge interest. Most diplomats and political pundits are now urging the leadership in Washington not to miss the diplomatic opportunity for the US to build and rebuild a much stronger relationship with India. They feel that the US has lost ground due to the visa dispute and they should now rediscover the ground and build a stronger relationship.
There is a feeling that both Japan and China have stolen a march to forge such relations with India. In my opinion, there is going to be a strong effort on the part of the decision makers here to rebuild relations with the Prime Minister and his allies.
On the assumption that the new government will lean more to the east – Japan, China, South Korea.
Significant interest has been shown by Japan. It is a country with a liquidity surplus and an investment surplus. Modi is well aware of this. Why are Japanese investors holding back, because they haven’t kept any of the promises we made.
In the field of construction and large industrial projects, they can take a pole position in the big projects here. That being said, everyone guessed what the position of the PM and the cabinet would be and the PM is his own man. My reasoning is that our Prime Minister is a practical person and he knows that any form of retaliation has no role in foreign policy.
I think their whole aim is to increase the economic health of India and through that benefit what should be India’s right role in the world. The fact is that we are the largest democracy in the world and we all know that power and role in global affairs for a nation comes from economic strength. I think, in his own way and at the right time, he will respond positively when the right signals are sent from the US administration.
On FDI in Defense
We have been persistent ever since we entered into joint ventures with foreign companies. We have not changed our stand. We have been telling the government from the beginning that allowing at least 49 per cent investment under the automatic route is a positive step. Because it encourages foreign partner to deploy technology in joint venture. Otherwise, there is a vigil on their part to provide 100% support to the JV. So if you really want to build the best technology here, (it should be) a minimum 49% stake, which is what we’ve always advocated for.
On Mahindra’s investment plans.
We never shy away from investing. We have never stopped our investments even during the downcycle. We invested in the Chakan Automotive Plant at a time of decline in the economy; We also invested in a tractor plant in Zaheerabad when the tractor market was witnessing a downturn. When the market for tractors improved we were able to increase our production. We always have a long-term view of the economy. We are investing continuously. In defence, for example, we will certainly invest if the government starts buying again for much needed upgrades. Pawan (Goenka) says we are looking at investment of Rs 4,000 crore, independent of new developments. It was something we were going to do.
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