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Issue No.: 577 | July 2015
 

HOW BUSINESSMEN CAN ENRICH PUBLIC LIFE – D. N. PATODIA – REFLECTIONS

S. V.Raju
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HOW BUSINESSMEN CAN ENRICH PUBLIC LIFE – D. N. PATODIA – REFLECTIONS by S. V. Raju, published by Project for Economic Education, Mumbai, * 2014 * pages 225. Reviewed by Mr. Peter Greenhalgh, independent Research Professional, Oxford, U.K.

Mr. D. N. Patodia (DNP) has witnessed and participated in over eight decades of remarkable change in India’s economic and political developments, and for four decades was often at the centre of some of these developments.

He was unwilling to write a biography preferring to "let my work speak for me”. Fortunately for us, we have the next best thing, in that his friend and close associate for many years, Mr. S. V. Raju, has brought together and provided commentary on a collection of DNP’s speeches. These illustrate both DNP’s wide range of activities as well as his in-depth knowledge of many issues. In addition, DNP provides some personal reminiscences that help to set the scene for the remainder of the work. However, it would have been interesting to learn more about DNP and his family’s business interests – and the specific issues faced in their operation.

Although many speeches were written some decades ago, the topics and issues covered are highly relevant today, and young readers (as well as many older readers) will benefit from the wide-ranging analysis and suggested solutions presented in the book. The book is very well written and provides interesting and sometimes fascinating overviews and insights into specific topics and issues against a background of India’s dramatic political and economic changes since the 1960s.

Following an introduction by Mr. Raju and some reflections by DNP the book is divided into 5 diverse sections. The first deals with Inter-State/Federal relations, which in a variety of guises have had a dramatic influence on India’s political and economic development. The regions covered include Rajasthan (from which DNP’s family originated and which he represented very effectively in the Lok Sabha in the mid-late 1960s), West Bengal, North East India and Kashmir. Two further sections, providing analysis of India’s relationships with Tibet (and thus China) and Russia and are very enlightening. DNP illustrates how the close alignment with the Soviet Communist economic and political system was not in India’s best interests, in particular the adverse effects on India’s foreign trade and development created by the rupee-rouble trade.

The fourth, and longest section, and to me the most interesting, provides an in-depth analysis of various aspects of the Indian economy covering the Planning Commission; the nationalisation of the banks in 1969 and the inefficiencies that this created; the role of the FICCI (the Federation of Indian Chambers of Commerce and Industry); the many missed opportunities for growth, many of which resulted from the pursuit of socialist/statist policies by the dominant Congress governments; and an analysis of the prospects and challenges of various reforms. The list of issues to be acted upon are still as relevant today as they were in the 1960s-90s as Prime Minister Modi endeavours to re-activate the reform process to achieve continued economic growth in India.

The book provides analysis and effective and practical solutions to a wide range of activities impacting the economy and the private sector. The growing impact of government regulation after independence on business operations and the associated rise of the socialist state are important themes. DNP’s analysis details the overcontrol, the over-protection, the over-regulation and over-taxation of India’s economy creating a high cost economy that led to the falling behind of growth rates during the first 40 years of independence. DNP is particularly critical of the failure of the Planning Commission’s Five-Year Plans, including the neglect of agriculture, the adoption of wrong priorities and the faulty planning mechanism. While not totally opposed to stateowned institutions he recognised that the regulatory environment in which these operated, including minimum interference by civil servants and politicians, was vital to their success.

DNP had liberal economic and political views, which from the 1960s until the mid 1980s were a long way from the mainstream. Time and events have proved many of his views correct. Recently Prime Minister Modi’s Government has launched its "Make in India” campaign and many of the policies pursued, such as the strong appeal to foreign investors to invest in Indian manufacturing and services, as well as the need to significantly reduce bureaucracy and regulation in setting up and operating Indian businesses were foreseen in DNP speeches some decades ago. This book provides several lessons to the current Indian government’s "Make in India” policy. While at the time, DNP and his Swatantra Party and FICCI colleagues were "voices in the wilderness’ many of their views and recommendations have been vindicated over time. India has never been short of small companies and in some sectors Indian companies are world leaders. However, one of India’s problems is the "Missing Middle companies” and the inability of small firms to grow. Although DNP never actually refers to this – his analysis provides some explanation of the "Missing Middle’’.

The chapter on the FICCI, of which DNP was an influential member and President in 1985, is equally interesting. Over its 90-year history, FICCI has played a major role in representing business and industry interests regarding domestic and international issues. DNP participated closely in the national and political deliberation/ economic debates regarding key aspects of industry development, trade, banking, communications and finance. From independence to the mid 1980s FICCI operated in an environment where private enterprise was severely constrained and state enterprises dominated and controlled many major activities such as manufacturing, transport, mining and banking. DNP’s election to the Presidency of FICCI in 1985 coincided with the government’s realisation that the Indian economy was stagnating, particularly in comparison with its rapidly expanding Asian neighbours. Several major reforms measures at the FICCI that DNP helped to initiate enabled improved coordination with the Government and assisted in the formulation and shaping of economic policies and international treaties. FICCI and DNP assisted in establishing close economic cooperation between India and several other countries – and DNP led high-level delegations to these countries.

The fifth section of the book contains summaries of three seminal presentations made by DNP which are still relevant and again illustrate DNP’s ability to identify major domestic and global issues affecting India as well as a willingness to provide possible solutions. The topics include the continuing housing crisis in India, the enormous opportunities presented by the Oceans and the continuing and unstoppable movement towards global integration.

Finally there are three appendices, which contain abridged version of speeches made by DNP in 1985-86 during his FICCI Presidency. One deals with the crucial roles of trader and producer and the severe constraints and over-regulation faced; the second discusses the "Third Industrial Revolution” covering advances in information and communications, genetic technology, energy, outer space and the oceans, and their implications for India. The third discusses the opportunities and challenges facing business.

A few suggestions:

  • The book would have benefitted from an index – and given the technology available today this would have been relatively easy to prepare. (Even from the 1970s DNP was very much aware of the impact that technological change could/would have on India!). However, there is an appendix detailing some important political and economic landmarks between 1969 and 2014.

  • In some cases, it is not always easy to differentiate between whether the comments are made by DNP or Mr. S. V. Raju.

  • The failure on some occasions to explain the meaning of some acronyms used, which may not be familiar to both the younger and foreign reader.

In making DNP contributions and arguments on a wide range of topics available to a wider audience, many of which are directly relevant to India today, Mr. Raju had done a great service to both India and to business.

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A Reader’s Comment

This is an unusual book, truly enriching the reader. Mr. S. V. Raju has done a fantastic job in putting it together. It is readable and interesting. The book has several new dimensions not known to me hitherto about certain critical issues that continue to confront the nation. My respects and admiration for D. N. Patodiaji has multiplied. His role in the Parliament, his arguments, his concerns, his courage and consistency deserve that this book is read by more leaders and people’s representatives. He inspires many ways.

Those in Parliament today, old and new, would benefit from reading the book. It exposes several lapses, lacuna and even lies in our policies at critical times of independent India.

Dr. N. Bhaskara Rao, Founder–Chairman of Centre for Media Studies (CMS), New Delhi
 
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