End of an era

The passing of Dr KK Birla at the age of 89 marks the passing of an era. He was the last of a generation of Indian industrialists who knew Mahatma Gandhi and Jawaharlal Nehru, who had vivid memories of the freedom struggle and who still believed that it was the duty of industry to contribute to the old-fashioned task of nation-building.

Though he was born into India’s leading industrial family, he was very much his own man. Of his companies, the most profitable, Chambal Fertilizers was founded by him as was Zuari, another successful fertilizer unit based in Goa. When he took over The Hindustan Times, it had rarely turned a profit and was hardly the successful media company it became under his stewardship.

His social views too were far more progressive than most members of his class or generation. He had great faith in youth (thousands of young people benefited from the Birla Institute of Technology and Science which he ran) and believed in equality for women, a belief he translated into practice by breaking with family tradition and handing his companies over to his three daughters.

Of the late GD Birla’s three sons, Krishna Kumar was the one who identified most with his father’s belief in the importance of public life. Even when it would have served his companies better for him to have devoted more time to business or to have switched loyalties to keep in with the establishment of the day, he remained true to his ideals.

Just as GD Birla had been Gandhiji’s confidant and Jawaharlal Nehru’s friend, KK Birla, became one of Indira Gandhi’s most trusted advisors, sticking by her through thick and thin, even risking arrest during the Janata period when he was under pressure to turn against her. He remained close to her son Rajiv and when his well-received autobiography (Brushes With History) was published last year, Sonia Gandhi not only attended the function where Prime Minister Manmohan Singh released the book but wrote the foreword in which she said: “His dignity and his old-world charm have always served as a source of reassurance that no matter how quickly India changes, the old values are still around.”

That sentiment captured the essence of the man. Almost everyone who met him was struck by his courtesy and basic decency. He was polite to a fault, meticulous about social niceties and punctual to the last second. Unlike many of today’s businessmen, he had grown up with money and it had ceased to matter too much to him. Consequently, his style was discreet and classy. He never flaunted his wealth, never showed off and once his basic lifestyle was in place, shunned flashy extravagance and vulgarity.

He was also a loyal friend and an obliging acquaintance. Nobody who went to see him for a favour ever came away disappointed and often, he would go out of his way to help people, even before they could ask.

Despite his Congress loyalties, he had friends across the political spectrum and each time he went to Parliament’s Central Hall, he was surrounded by MPs of all political persuasions. Many had fond memories of some occasion when he had done them a favour, even though he himself had completely forgotten the incident. For instance, he was startled to be told by the family of AB Vajpayee that he had helped them get their first car, an Ambassador made by the Birla-run Hindustan Motors. He had no recollection of having done this. What he did remember though was a friendship with Vajpayee going back several decades.

Despite the essential simplicity of his nature, he was also a complex men. He was deeply religious and the magnificent Birla temple in Calcutta is a monument to his faith. But despite his core Hindu beliefs and his strong friendships with individual BJP leaders, he never deviated from the path of secularism, backing the Nehruvian tradition of separation of religion and politics. Similarly, he had a deep-seated belief in free enterprise and a hatred of unnecessary bureaucracy. But he recognized that India’s economy could only be liberalized slowly and supported Indira Gandhi even when many of his contemporaries looked elsewhere.

That complexity extended to his attitude to The Hindustan Times. He had strong political views, clear loyalties and treated his ownership of the paper as part of his contribution to public life. Normally that translates into editorial interference. But in the four years that I was editor of the Hindustan Times, not once did he tell me to kill a story, to slant our coverage or to support one of his causes. Even when he disagreed with me ---- which he did periodically – he upheld the independence of the editor. In that sense ---- and in many others --- he was truly a dream proprietor.

So it was with his personal life. At one level, he was formal and organized. He would write letters to members of his family stating his views, he would meet close relatives by appointment and he believed in formal courtesies. But at another level, he was a deeply emotional man with a strong sense of family. Each year, the extended family (daughters, sons-in-law, grandchildren etc) would go on long holidays together. Rarely have I come across children who were more attached to their parents than his daughters were.

As he was to them --- and to his beloved wife of 67 years. Even when she was unwell, he would take her abroad regularly, travelling the world like some besotted young couple. If she had difficulty walking, he would insist she used a wheelchair, but their days were unaffected: wandering on the shores of Lake Geneve, shopping at the best shops in New York or personalizing a wing of London’s Grosvenor House.

On July 29, 2008, she passed away. All of us who knew him, wondered how he would cope. He had become used to a life where he called her three times a day ---- even when they were in the same city. How would he manage on his own?

It was somehow typical of the man that, outwardly at least, he acted as though life would go on as before. Two days after her passing, he went to office in Calcutta for a while. And those of us who visited him at Birla Park were surprised to find that he wanted to discuss current affairs and the state of the government. Two weeks go, he even came to Delhi to host a lunch for his friend Swraj Paul.

But what we did not realize was how much he was internalizing his grief. Deep down inside, he was bereft, lost without her and unsure how to continue. When he was diagnosed as suffering from pneumonia ten days ago, few of us thought that the condition was life-threatening or that we were in any danger of losing him.

What we failed to see was that he had lost the will to go on without her. He refused all attempts to shift him to hospital, remained at the house he had shared with her, where his children had grown up.

And then, early on Saturday morning, he went off suddenly to join her again, re-united with the woman he loved, certain that this time nothing would ever separate them.

“We have also asked states governments to work collaboratively towards reducing procedural hurdles involved in starting a business in India. States li

The Indian economy expanded 7.9% in the first quarter (April-June) of the current fiscal year—the lowest since the third quarter of 2004-05—compared with 9.2% a year ago, confirming the general apprehension that growth is slowing down.
Data on the gross domestic product, or GDP, growth rate, released by the Central Statistical Organisation (CSO) on Friday, however, didn’t hurt the stockmarkets. The Bombay Stock Exchange’s benchmark Sensex index gained more than 500 points, equivalent to 3.67%, to close above 14,546. At the National Stock Exchange, the Nifty index gained 3.4% to reach 4,360.
According to brokers and analysts, stocks gained largely because investors had anticipated a low growth rate.
The positive trigger from the US markets, which rose on Thursday, also helped local buying sentiments on Friday. A drop in inflation rate based on the Wholesale Price Index, released after market hours on Thursday, too, came as a positive for the markets.
Inflation accelerated at 12.4% for the week ended 16 August, compared with 12.63% the previous week.
Lower inflation served to lift investors’ spirits, said Anita Gandhi, head of institutional business at Arihant Capital Markets Ltd. “Investors were expecting inflation to cross 13% this week,” she said. “This rally could continue for some more days.”
The CSO data showed the farm sector grew 3%; industry, along with the construction sector, expanded 6.8% and the services sector 10%. Economists said these numbers were broadly in line with their expectations for GDP, which measures a nation’s total income and output.
“...the worrying part is the poor performance of the electricity, gas and water supply sector, which grew at only 2.6%. As there are already supply-side constraints to growth, a poor show by this sector doesn’t augur well,” said Dharmakirti Joshi, principal economist with credit rating agency Crisil Ltd. Apart from the industrial sector, the services sector also showed moderation in growth, mainly due to a slowdown in the financial sector, which grew 9.3% compared with 12.6% last year.
“This is due to a slowdown in credit growth which came down to around 22% in the first quarter from more than 30% in 2007-08. This sector has certainly shown some loss of momentum,” HDFC Bank’s chief economist Abheek Barua said.
The Reserve Bank of India (RBI) has been making bank credit dearer since 2006. It raised the key repo rate, at which it lends overnight to commercial banks, four times in 2006 and twice in 2007.
In 2008, it increased the repo rate by 1.25 percentage points in three moves to 9%, raising borrowing costs in an attempt to cool inflation.
However, economists don’t expect growth to come down significantly from the current level. “Growth could be more hit next fiscal year due to the recent credit tightening that will affect growth with a lag,” Joshi said. Crisil expects GDP to grow 7.8% this fiscal year.
The Prime Minister’s economic advisory council in its economic outlook said GDP will grow 7.7%.
A local research unit of Citigroup Inc., meanwhile, lowered its growth forecast for India for this fiscal year from 7.7% to 7.5%, after taking into account the latest monsoon and crop sowing data.
On further monetary tightening by the RBI, HDFC Bank’s Barua said: “I would assign lower probability of any rate hike in October.”
Joshi said it would be a difficult task for RBI to maintain a balance between growth and inflation with growth slowing down. “Any further monetary tightening has to be very carefully thought out.”

Govt set to clear ground to help cos get a faster start

Starting a company in India would take lesser time now. The government is considering a series of amendments in the Land Registration Act as well as Shops and Establishment Act to bring down the time for setting up a business from the existing 300 days to 100 days.

The department of industrial policy and promotion (Dipp) has set up a task force to bring about these changes and prod state governments to work out models to cut various procedural delays in starting up new business.

The Dipp has initiated the process of working with ministries like finance, labour and company affairs to reduce project-related hurdles. Allotment of PAN and TAN would also be speeded up for companies to kick-start new business.
Significantly, the World Bank report on doing business (2006) ranked India at 134 position, just four notches up from its previous spot.

Starting a business in India takes 35 days and involves 11 procedures. Obtaining permits, completion of notification and inspection, and getting utility connection take as high as 270-300 days. Even Maldives, Pakistan , Bangladesh, Sri Lanka & Nepal are ahead in the bank’s ranking in the “ease at doing business” category.

“We have also asked states governments to work collaboratively towards reducing procedural hurdles involved in starting a business in India. States like Gujarat and Maharashtra have speeded up the clearances required for new businesses. These states complete procedures in 60-80 days. We have urged other states to follow suit,” a senior Dipp official said.

“Whether it’s on acquiring land, getting power and water, or necessary permits and licenses, state governments have a major role to play. Tamil Nadu, Gujarat and Andhra Pradesh have become proactive in this regard,” he said.

The World Bank considers 10 criteria to assess the ease of doing business. These include ease of starting business, getting a licence, receiving credit, protecting investors, paying taxes, cross border trade, and closing a business. Most emerging economies like India are not among the top 30 countries in the World Bank ranking.