Obviously, Government of India is doing whatever it can to boost industrial and economic growth, inspite of several constraints . Of course, some investors and industry houses seem to think that even more proactive steps are required , particularly with regard to taxation measures and extending protection for Indian companies from global competitors in India.
by N.S.Venkataraman
Many industry observers, policy planners and economists , both in India and abroad , often wonder as to why the Indian industries are not forging ahead to the level of it’s potentials.
Considering the land area of India , large coastal belt, mineral deposits, variety of soil conditions and climate that the country has as well as the huge manpower strength in the form of engineers, technologists as well as skilled personnel, many people think that there is no reason as to why Indian industries should not grow faster than the present pace.
In recent times, to give a big push for industrial growth and improve the investment climate , Government of India has introduced an innovative PLI (production linked incentive ) scheme, hoping that it would encourage more industries and service oriented units to be set up, speed up the technology development and expand the manufacturing base and the production level in the country. Of course, this innovative scheme of the Government of India has caught the imagination of industrialists and investors and some positive response has already been seen in the country. Certainly, the climate of growth has been strengthened to some extent by the PLI scheme.
The other innovative scheme introduced by Government of India is the “start up initiative”, to encourage the new entrepreneurs to set up projects in industrial , services and other sector, which too has received reasonably good initial response so far. The level of commitment of the Government of India to this start up scheme is more than evident from the fact that the Prime Minister has declared 16 th January as the “National Start Up Day” to be celebrated every year.
Obviously, Government of India is doing whatever it can to boost industrial and economic growth, inspite of several constraints . Of course, some investors and industry houses seem to think that even more proactive steps are required , particularly with regard to taxation measures and extending protection for Indian companies from global competitors in India.
While the above scenario is continuously being evolved , modified and fine tuned , it is high time that the industry houses and project promoters in India should also carefully analyse, examine and evaluate whether they have played their own role adequately well in fast tracking the growth of industrial and services sector in the country.
One of the issues in Indian industry and services sector and in commercial business establishments is that most of the project promoters , while taking policy decisions, often balance between the interests of their families and the interests of the industries and establishments which they promote and manage. This sort of family and dynastic culture ( like the dynastic politics that is now becoming a matter of concern in India ), has become a hurdle in the rapid progress of the industries and services sector.
This ,obviously , means that professionalization of management practice in India still have a long way to go and the” family love” of the project promoters often block the way of professionalization of management . This is not a healthy sign.
In the case of several medium and large scale industries and commercial establishments in private sector that have reasonably good track record, we often find the sons , daughters, nephews or nieces or close relatives of the project promoters are suddenly entrusted with the responsibility and authority by being posted as top executives even if they are in the age group of late twenties or early thirties, as succession management practice.
In such circumstances, senior professionals and technocrats with several decades of experience and valuable expertise gained over a long period by serving in challenging assignments , are forced to report to those inexperienced top executives who form part of the family tree. In other words, the senior professionals face the embarrassing experience of having to explain the problems and suggest solutions and provide guidance to the inexperienced top executives ,who happen to be the top executives only due to the fact that they happen to be the son, daughter , nephew or niece or other relatives of project promoters.
In such developments where the family members are imposed on the industries and establishments , it is often seen that costly mistakes happen in decision taking process and sometimes, even the companies lose the sense of direction due to the whims and fancies of the young and inexperienced top executives.
Another disturbing aspect is that companies are often split by the project promoters amongst the siblings to accommodate each one of them . In the process, several companies are formed from one company and investment capability and technology expertise of the newly formed companies by splitting suffer enormously. The net result is that the growth of the industries and establishments suffer . Many examples can be cited to highlight how the companies are split by the project promoters only with the sole purpose of accommodating the siblings and perhaps, even to prevent the family quarrels.
One example that is known to everybody is that of Reliance Industries. After Dhirubhai Ambani , his two sons split the enterprise between themselves. Now, these sons want to split the enterprise further to accommodate their own sons and daughters. Perhaps, the chain will go on endlessly in future by several more split ups!
Because of the concept of family hierarchy , it is also very well known about sons and daughters quarreling with their father ( project promoter ) due to family claims and finally ending up in courts where the cases prolong for very long time. In the process, the companies suffer and consequently the progress of the country is impacted.
It appears that adequate research studies on the extent to which the control of industries and business by families have retarded the progress and growth of Indian industries and economy are yet to be taken up with the seriousness that it deserves.
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