From Tata to Adani, PMO is the first touchpoint for India Inc

When it recently made a request to the Gujarat government to take 51 per cent equity in its beleaguered Mundra ultra mega power plant (UMPP), Tata Power marked the letter to the Prime Minister’s Office (PMO). A copy was sent to the secretary to the Ministry of Power. 

The letter, which was addressed to Gujarat Urja Vikas Nigam’s Managing Director Pankaj Joshi, wanted the Gujarat government — a procurer from the project — to take 51 per cent equity in the plant at just Rs 1. Adani Power did something similar, with letters sent to the PMO and departments in the Gujarat government, sources said. 

While the PMO has been at the centre of all key decision-making in the current government, it is increasingly turning out to be the most important touchpoint for India Inc. 

For instance, when Tata Sons removed Cyrus Mistry as its chairman in a boardroom coup of sorts last October, the PMO was the first government department to be informed about the development. In fact, Ratan Tata wrote to Prime Minister Narendra Modi, informing him about removing Mistry as chairman of Tata Sons with immediate effect. Soon after, Tata and Mistry are learnt to have met the Prime Minister separately.

The PMO and its key functionaries are not behind the scenes any longer, unlike in the past, a source pointed out. Corporates have come to understand that the PMO drives all key decisions in this government and, therefore, they are keen to be in touch with this all-important office, the source said. “Industry keeps the direct line of communication open with the PMO as an insurance against any future problems,” the source added. 

Whether it’s the ongoing financial stress in the telecom sector or the issue of bringing more drugs under price control, industry majors are regular visitors at the PMO to meet top officials. Even for big-ticket disinvestment proposals such as Air India or the merger of oil companies, the South Block office at Raisina Road is a hub of power like none other. While administrative ministries and departments continue to hold meetings and deliberations with industry bigwigs on many burning issues, it is the PMO, and not anything else, that India Inc sees as the “mover”. The ground floor reception at the PMO is often crowded with the who’s who of Indian industry waiting to meet a top official, perhaps for 10 minutes or even less.

Naushad Forbes, former president of the Confederation of Indian Industry, said that interactions between corporate captains and the PMO had been quite close. The PMO should be viewed as an institution and not as individuals in that office, according to Forbes. As for the frequency of such meetings, he said, “Once every couple of weeks.... I would say the PMO has played a positive role in coordinating issues.”

The goods and services tax (GST) is among the latest issues bringing corporate leaders to this powerful office. Recently, a senior industry representative posted on Facebook a picture of the Prime Minister discussing the GST with India Inc’s captains, attracting several hundred ‘likes’. 

Apart from flagship schemes like Make In India, Startup India, and Swachh Bharat, industry’s discussions with the PMO prominently revolve around the themes of finance, banking, taxation, and power and infrastructure, another source said. “The scale and role of the PMO now is much larger than before. The engagement level with industry is that much higher,” the source added. 

Anything from the food-only foreign direct investment policy to proposed change in sourcing guidelines for tech companies such as Apple, industry is eager to hear from the PMO all the time, a top executive pointed out. It is not surprising then that Tata Power took up the Mundra UMPP issue directly with the PMO. 

“The procurers can take over 51 per cent paid-up equity shares of Coastal Gujarat Power (CGPL) for a nominal value of Rs 1 and grant relief to the project by purchasing power at a rate to fully address the underrecovery of fuel costs at CGPL. Tata Power shall continue to operate the plant under an O&M (operation and maintenance) contract and provide all required support to the project as a 49 per cent stakeholder,” said the letter.

And while the Prime Minister himself is seen more often with visiting heads of businesses from other countries through government announcements and social media posts, the industry confirmed that he does make time for home-grown companies, too, at regular intervals.