Mumbai: When India opened up its economy suddenly on July 24, 1991, businessmen and industry were caught by surprise. It was a shock to change the mindset from a sheltered economy to an environment of freedom from licences.
Every year saw a slew of measures taken to open up the economy throwing up new challenges that saw many a pre-90s big name fall by the wayside.
A panel of businessmen and a banker — B. Muthuraman, vice-chairman Tata Steel, Praveen Toshnival, chairman of Nivo Controls and T. C. A. Ranganathan, ex-chairman and MD of Exim Bank, discussed this fall out which has been recorded in a book ‘The Big Leap’ by Shar-mila Kantha and commissioned by the CII, that was released on Tuesday.
Ms Kantha writes, “Simply put, this (liberalisation) was akin to putting a trundling Ambassador car on the race track and expecting it to compete with racing Ferraris.”
Mr Muthuraman, who has spent an equal number of years pre-and post economic liberalisation at Tata Steel, said the central point was to change the mindset of the workforce from a “contained box to mindset of aspiration.”
He said they were told by their foreign advisor to shut shop as their costs were high, they had too many people — 78,000 to produce a few tonnes of steel!.
But the company quickly created a vision to become the lowest cost steel producer and cut down its staff to 40,000 by 2000. Their mantra was “customer first har haal me (customer first always) and the rest is history.
Praveen Toshniwal wh-ose company manufactures process control instruments in the SME sector had the toughest battle to compete with foreign companies.
“Greater willingness to learn and to adapt, and providing after service maintenance to customers” is the mantra of success, he said Mr Ranganathan str-essed the need for quality and innovative products for which R&D is very important.
“Quality does not come merely from internal processes but by having strong customer and vendor relationships,” he said and cautioned that although everyone talks about reforms “not many companies are geared to face this kind of reform and the resultant competition.” He said “we have many success stories but the challenge is to have a successful economy.”
