‘Industry willing to hire from the bottom of the pyramid, but they should be made employable’

RAJEEV DUBEY: Is this the beginning of your entry into politics?

Shekhar asked me this question on Walk the Talk, with me in Ludhiana. To be honest with you, if you asked me this question five years back the answer would have been, “Yes, I’d like to be in politics in some form by age 50.” But I seem to have lost my plot. My view is, I could serve society and the nation better from my corner, that is, by building enterprises. That can have a bigger transformational impact on society.

ANANDITA SINGH MANKOTIA: Any development on the Bharti-Walmart front, since you and the Walmart team last met up with Montek Singh Ahluwalia and the ministers?

The meeting with the government was really a courtesy call to say to the government that Walmart was coming into the country and they wanted to share their plans. The development has been more on the ground: in terms of recruitment, which is going on extensively, finalising land, a number of areas have been marked as distribution centres. Walmart’s experts on design have been visiting us, Bharti has identified plots around Delhi . . . we are on the verge of finalising our legal agreement. I would say that within this month, that agreement should be in place and we will be filing with RBI our plans for moving forward.

ANANDITA SINGH MANKOTIA: Is Walmart also going to invest in real estate, or is it going to be a completely Bharti initiative.

No, as we’ve mentioned earlier, we’re very agnostic. Real estate could come from anywhere, Walmart and Bharti, the joint venture that we’ll have could either buy real estate or lease or rent on a long-term basis.

ANANDITA SINGH MANKOTIA: But as an entrepreneur would you be happy to use the Walmart name in your front-end stores.

Well, as a customer who’s an evolved customer who goes around the world a TESCO or Walmart name adds value to the brand. But we have to see what the local Indian who has never travelled outside, how does he feel about it? Results that have come out show that Bharti has actually become a huge brand. In fact, we always felt that Airtel would get that kind of resonance, but we have been very pleasantly surprised at the feedback. People are wanting the Bharti name to be there.

SEEMA CHISHTI: How inclusive is this growth that India is witnessing? Does the Indian corporate sector recognise that inclusive growth, that takes more people along is better for it? Are they doing their bit to ensure that it happens?

I think the realisation is high now. Are they doing enough? Frankly, no. It’s hard for industry to do much about that. Governments are the custodians of those issues for the country. But the good news is CII and other chambers: there’s a great deal of talk on this. People are recognising now that you cannot have an India that is shining or growing in certain pockets, you need to have the whole of the economy flow with that growth. Now, several economists feel that if you have 10 per cent growth, it will eventually percolate down the system and everybody will enjoy the economic book that’s been the China story. China has said that they may not have democracy for another 100 years, India’s had democracy for long. You have to balance it right away.

You can’t wait for that trickle down effect to happen in 20 or 30 years. Which means you may as well have 8 % of growth, but it must be more inclusive. I believe that industry recognizes that today. Not enough is being done. But a good start has been made.

GAUTAM CHIKERMANE: On a more personal domain, you mentioned you were fascinated by these ‘garage entrepreneurs’, like Apple, Microsoft. Was the struggle then more? Or now, when you are much bigger?

Challenge at every point of your life looks very big. When you’re small Rs 10-40,000 looked like very big challenge. But it I go back in to my past life 1976-79, that period, Rs 20-30,000 was a lot of money and that struggle required a lot of physical effort: We had to move around. Travel Delhi to Mumbai, then go to Calcutta the same evening in trains, because you couldn’t pay Rs 440 for that flight to Bombay. So that kind of struggle was clearly a big struggle. But when you look back, you feel that it was more of a physical struggle because the fight was not with anybody but yourself. Your own lack of ability to raise funds, or have the right business models. Today it’s with large entities you are competing. Global business and strategic input needed today are far greater and the challenges are different.

SATYA NAAGESH AYYAGARY: What would you do differently as CII president. Something that your predecessors haven’t done. ?

About CII, yes there will be a theme for the CII next year, it will be unveiled in the next CII meeting. But I must say, CII has had a strong agenda of sustainability and inclusive growth for the last 2 years. This will be carried forward.

SONU JAIN: Agriculture, as a business proposition, do, you actually think from the farmer’s perspective it will make a difference. Let’s say in the next 10 years. Is it not true that corporates are nerely replacing the middle men as of now and the farmers for them nothing has really changed, how do you think it will make a difference in the long run.

We have been dealing at the farm level for a long period of time, the small catchment of 5000 acres that we cultivate through contract farming. There’s a significant degree of income in the hands of those who are farming and those who are tilling both. Middlemen have been removed in the process. The family members engaged in farming get paid, twice as much as what they were getting from local contractors. Its more than the minimum wages in Punjab. And the crop has been lifted whether they’ve produced good or bad crop. The income in this catchment has improved significantly. But this is a small experiment but. This is how you start and multiply the experiment. The good news is the Tatas, Reliance and others who are talking about getting into the farm land. Yes, the farmers will need to move away from cash crops into value added products like fruits and vegetables.

I am confident that if this experiment succeeds the amount of money in the hands of farmers will quadruple. On one hand the retail part, on the other our export activities and supplies. We’ll both ensure that linkages into farmers become stronger; storage capabilities become stronger and therefore more money in the hands of farmers. 40-50 million tones of wastage that this country sees will also disappear. All in all, customer pays a low price and farmer gets a much higher price.

SONU JAIN: So are you making profits in your experiment.

No, we are making significant losses, we are not able to do with the produce, for export. Because the cold chain does not exist. That’s the challenge were working on last year we did. We can take the financial losses. In agriculture, the effort is very high the degree of attention and participation of your manpower resources is very high. Yes, we are confident that ultimately this business model will work.

PRAGATI VERMA: You have had a very sweet relationship with all your partners including Vodafone; when they enter and even when they exit. How do you manage that how crucial is it for Indian business to do that?

We’ve had a fantastic relationship with all our foreign partners thus far. Some have left, some were bought by us. Never one of them being a problem with Bharti. We have our disagreements, we fight on the board but in a very very healthy, professional way. If today British Telecom (BT), Telecom Italia, Vodafone any of our past partners were ever to come to India, we would be the first point of call. I believe you can never lose if you are fair to your foreign partner. And fairness means that when exit or enter you should be transparent. All our partners have always made money. If Bharti is the most preferred choice of partner for any business house coming to India, the reason is when they talk to any of our partner from the past; they come up with great references for us. I can’t believe that Walmart would tie up with us, if they got poor reports about us. So I believe, its added a great deal of value. All you need to do with these large companies is ‘transparency’, good news bad news to be shared at the same time. No dressing up and as they exit and leave it should be a win-win situation for both.

PAMELA PHILLIPOSE:. In the Sunil Mittal, story, over the last 20 years, what do you think has been the most significant policy development was made it possible and what do you see the greatest challenge to it in the future?

There have many important milestones in my life. Look at mobile telephony. In 1992, government decided that 8 licenses for mobile phones will be given we participated in it rank outsiders and we won the Delhi license after a long arduous journey. That to my mind, was a turning point. We did not get benefit of moving from fixed license share to revenue sharing which others got because we were Delhi. But that became an opportunity for us to buy off all those companies that were dying. That could be an policy shift, but it was more of entrepreneurial activity. We have always been on the other side. Whether it is breaking of the duopoly of mobile phones, getting reliance, BSNL, The good news is we have stayed the course and moved forward I cant pick up one policy. I think the government is becoming less relevant for developing business and that’s the way it should be. Interference with business is less and less now. For every successive government and that’s good news for entrepreneurs.

SANJAY ANAND: It’s almost a year now since your foundation started working in education that has been an area of concern for the country

The good news is that schools are opening up in Punjab we hope to finish 200 schools in the next 6 months. Resistance is in the form of government schools being handed over to us in Punjab. They’re lying shut nobody teaches there. But there was great deal of resistance from local entrenched block of teachers. So we decided to walk out of the project. So we’re building our own schools and running them. Children are moving out from others schools and moving into them. We have pressures to open more schools in the same area. We want to build 1,000 schools by next year. But it’s a trickle compared to the overall need. 320 million people are in between 6-16 age group; in 10 years time they’ll be between 16-26 each one of them is a potential entrepreneur terrorist or criminal. We have to decide how to train them employment opportunities. There’s great deal of problem there. Out of 320, possibly 260 million will never go to a school or early dropouts. Now do we give them skill sets, that’s where the Skills Mission that the prime minister set up is important. I hope our contribution, in the form of early primary education will give a catchment for skills development after. They pass VI-VII standard from our schools we hope to be a catalyst to others to come into this area.

ABHAY MISHRA: Government has expressed concern that corporate sector not giving representation to SC/ST and OBC weaker section. What is corporate sector going to do to give them fair representation ?

At CII there is this affirmative committee which Dr J.J. Irani was heading. Lots of manufacturing units have a great share of people from SC/ST, specially in deep manufacturing like steel. Many areas where catchment of SC/ST is higher; then there people its much higher. But in services industry it’s much less. Need slightly higher educated people, those who can speak English. BPOs, for example. I went to Chindwara with the minister last month. There are students who’ve done computer engineering. They’re not employable: they have computer skills but they don’t have skills to make a presentation. NIIT is actually putting up a finishing school out there where all these graduates in 60 days time can be converted into potential employees. I don’t think industry has any hesitation in hiring from the bottom of the pyramid. A large number of corporates have signed on the code of conduct we’re actively promoting in our recruitment process.

SANJAY ANAND: You are tying up with Walmart at a time when its facing attack in the US for squeezing margins, work place ethics etc. Is this the right time?

I don’t want to sit here in defence of Walmart: it’s the world’s largest company and they must defend their own turf. They haven’t done much of PR activity of the goodness that they do. I went to Bentonville. I’ve not seen a more evolved company. A $ 350 billion dollar company but their offices are as basic as it can get. I went to different Walmart stores, I didn’t see an angry or grumpy face. At the entrances elderly 60-65 year olds, green-jacketed, willing to talk to you, they’re so helpful. The only company of that size which works six days a week. At 8:30-9 everybody goes to sleep in Bentonville. By 5:45-6 they’re in their offices. Seventh day is left for family. Yes, they employ some Hispanics at $ 8 an hour — but they’re smiling, they love it because they’re getting an opportunity. Then there’s a customer side. When everbody saves a few dollars more, they bless Walmart. So I just saw happiness all around. Yes, but when you are a large company, you’re the first point of attack. During the Katrina crisis, their trucks were the first to reach. Because they realise being a large company you have to do something more, and they’re doing that. I tell you for India, they’ll bring the same values that they have for America, every day low cost, every day low price.

BANI PATNAIK: Recently we’ve seen a lot of bloodshed in Nandigram for the SEZ there. Are you, as an industrialist upset with this? Secondly, had you been in policy making, what would you have done to avoid such situations?

You need to balance both. In this country you cannot afford a Chinese model. You want a road to be built and you bulldoze everything in the way. You cant afford to do this here. You cannot build anything on land where there’s been great struggles and agitation. You have to have them on board. If it means paying them handsome returns then it must be done. The problem with West Bengal is peculiar. There’s hardly any land which is not fertile so you must compensate heavily, fiscal, relocation. The government is recognizing this; and suggests that the people who are being displaced need to be taken care of.