Committed to the next wave of reforms

The 12th Annual Business Standard Awards honours the Indian industry’s finest entrepreneurs and companies.

The security drill on Sardar Patel Marg in the national capital on March 25 was far tighter than what could be imagined about two decades back. The day was special because of the Business Standard Awards ceremony at the ITC Maurya. But more than that, it was Manmohan Singh who was to arrive at the Kamal Mahal of the hotel as the chief guest for the function. He was the finance minister in 1991 when modern India’s economic reforms got a kick-start, today he’s the Prime Minister. On that Friday of March 2011, the Prime Minister rose to the occasion again. He assured business leaders his government will usher in the next wave of economic reforms.

“We are committed to the next wave of economic reforms that will make the economy more competitive. We are also committed to the introduction of the Goods & Services Tax in 2012,” he said at the 12th Annual Business Standard Awards function. This was following a panel discussion on 20 years of economic reforms, which had come round to the view that while the economic reforms unveiled in 1991 were triggered by a crisis, it was now time to focus not just on reforms, but on the many constraints that could choke the economy’s growth potential in the coming decade.

The evening was all about two different countries, but the same people and a single destiny. And, the occasion was to salute the achievements of the Indian Industry’s finest. The Prime Minister, the architect of the 1991 reforms, gave away the awards to top performers from the corporate world.

P M Murty, the managing director & CEO of Asian Paints, got the CEO of the Year award. Maruti Suzuki got the award for the Company of the Year; Engineers India Chairman & Managing Director A K Purwaha received the Star PSU of the Year award for his company; GlaxoSmithKline Consumer Healthcare CEO Zubair Ahmed received the Star MNC of the Year award; TTK Prestige Chairman T T Jagannathan received the Star SME of the Year award; Smita Godrej Crishna of Godrej & Boyce received the Most Innovative Company of the Year award.

Aniruddha Naha of DSP Blackrock Micro Cap Fund won the Fund Manager of the Year (equity) award, while Amandeep Chopra and Manish Joshi of UTI Mutual Fund bagged the Fund Manager of the Year (debt) award. MD Mallya, the chairman & managing director of Bank of Baroda, got the Banker of the Year award. The mood in the country, the Prime Minister said, was similar to that in 1991. “I can sense the mood for renewal. We didn’t disappoint then, we won’t do that now,” he said. “I value the impatience and irreverence of the youth. It needs to be translated into constructive action.” Economic reforms, he said, was the only way corruption could be tackled. There was pressure from the general public for more reforms, he said.

“Discretionary power that favours corruption needs to be curbed. Eternal vigilance is the price of freedom,” he said.

The function was attended by India’s top businessmen. Y C Deveshwar, Analjit Singh, Jagdish Khattar (of Carnation), Hari Shankar Singhania, Onkar Singh Kanwar, Rajan Nanda, Rajeev Memani, Arun Bharatram and Atul Singh (of Coca-Cola India) were among the audience.

Stressing the importance of economic reforms to curb corruption, Singh referred to the telecom sector. Before the sector was opened, people had to pay bribes to get telephone connections, he said, adding the telecom revolution had ended that and even the poorest of the poor had a telephone connection now. However, people had found newer ways with their ingenuity and greed to make quick money, he added.

To push through reforms, the prime minister said, it was essential that Parliament be allowed to function smoothly. The winter session of Parliament was a washout due to an Opposition boycott over the demand for a Joint Parliamentary Committee probe into the 2G spectrum scam. The Budget Session of Parliament, which ended on Friday, saw the introduction of a series of important Bills like those on the Goods & Services Tax and pension and banking reforms.

He said states ruled by the Opposition must think nationally – a reference to their opposition to the Goods & Services Tax Bill. “The challenge before us is sustainability of the economic rise and efficacy of governance. Growth that is not inclusive is not sustainable.”

Talking about the economic reforms initiated 20 years ago, the prime minister said even without the balance-of-payments crisis of that time, there was a strong opinion in favour of liberalisation. The success of the East Asian economies and the collapse of the Communist Bloc helped the process. He added that P V Narasimha Rao, the then prime minister, showed remarkable boldness in embarking on the reform path.

A 25-minute panel discussion, which ended just before Singh arrived, concluded that complacency about achieving high growth without tackling problems arising out of rising energy prices, optimal allocation of natural resources and crony capitalism could jeopardise India’s long-term growth potential.

The panelists were Union home minister P Chidambaram, the Prime Minister’s Economic Advisory Council chairman, C Rangarajan, Planning Commission Deputy Chairman Montek Singh Ahluwalia and the government’s former Chief Economic Advisor, Shankar Acharya.

Tracing the history of reforms, Chidambaram said if there were no economic crisis, Manmohan Singh would not have become the finance minister and there would have been no reforms. The panelists did not disagree with the suggestion that the reforms in 1991 were introduced by stealth, but Ahluwalia argued the crisis was so severe that it was a no-brainer to argue on the remedial steps the economy needed. Rangarajan, however, admitted the second phase of the depreciation of the Indian currency’s value vis-à-vis the dollar was effected in spite of the political establishment’s discomfort. Acharya said the doubtfulness on reforms was as evident in 1991 as it was now.

When asked if reforms had more backers now, Chidambaram said emphatically there were more reformers within the Cabinet, in the government, among Members of Parliament and even among opposition political parties. Financial sector reform bills drafted five years before were now being tabled in Parliament and seeing support in various quarters, he said.

There was more in store for the evening. When the prime minister walked into the hall to hand over the Business Standard Awards before a glittering array of Indian business, the news broke: Singh had invited Pakistan President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani to watch the high-voltage India-Pakistan ICC World Cup cricket match with him at Mohali the following week.

Even before the presenter could finish the sentence, the hall, full to the brim with India’s best and brightest, erupted into applause, which lasted several minutes. After becoming the CEO of the Indian government, it was to be Singh’s first outing to watch live cricket in a stadium. India went on to become the world’s best in the game.