Call of the Nation
Inducting businessmen into governance is an experiment that has gone awry twice in the past. But that hasn’t deterred Prime Minister Manmohan Singh
Most Indians have heard of T.T. Krishnamachari, who founded Chennai-based TTK Group way back in 1928. He was one among three key businessmen — the other two being R.K. Shanmukham Chetty and John Mathai — that Prime Minister Jawaharlal Nehru relied on. All of them occupied important positions in his Cabinet and all of them were graduates of the Madras Christian College (MCC). Enough reason for talk in government circles of how MCC alumni had a stranglehold on important economic portfolios.
TTK was minister for industry and later finance between 1952 and 1965. He built three steel plants, set up IDBI, ICICI and UTI, and crafted the Family Pension Scheme as an instrument of social security. In hindsight, he is considered one of the founding fathers of modern India. Back then though, he went out in ignominy when questions were raised in Parliament about LIC’s investments in convicted scamster Haridas Mundhra’s sinking companies.
Controversy claimed another key member of Nehru’s Cabinet – Shanmukham Chetty. A member of the Tamil Vannia Chetty business family, he presented independent India’s first budget. At the end of year one, he too had to go. Some say he was asked to resign by Nehru due to a minor dereliction of duty by a subordinate official. Yet another account in The Hindu talked about a cloud around Chetty’s unusual interest in a tax case involving mill owners in Tamil Nadu with whom he was close to.
Then there was Mathai, a former director on Tata Sons’ board who served as Nehru’s finance minister and presented two Budgets. But he too walked out in a huff protesting the increasing power of the Planning Commission and its influential member P.C. Mahalanobis.
The trio’s controversial exits remain a significant chapter in contemporary Indian history. They provided the first clues of why the political system wasn’t prepared for businessmen being inducted directly into government. If any hope existed, Indira Gandhi snuffed it out after she came to power in 1967. Her brand of socialism ensured businessmen were viewed suspiciously and income tax raids against business families became common, except in the case of the favored ones.
Things started to change when Rajiv Gandhi came into power in 1984. He started by dismantling of the Licence Raj, modernised telecommunications and education, expanded science and technology initiatives and improved relations with the United States.
Rajiv’s primary advisors, Arun Nehru and Arun Singh, came from a different world. Nehru was one of the youngest presidents at Jenson & Nicholson while Arun Singh was marketing strategist at consumer products company Reckitt and Colman. The youthful Rajiv raised visions of John F. Kennedy, who had similarly symbolized youth and the hope of a generation of Americans.
Sam Pitroda, a successful technologist in the US whom Indira Gandhi had invited to India to start up C-DoT, became Rajiv’s technology advisor. Pitroda’s work at C-DoT, an autonomous telecom R&D unit, laid the foundation for India’s telecom revolution. In a recent interview with Forbes India, Pitroda spoke of those momentous times. He told us, building a nation is far more complex than building a business. And that it takes both humility and arrogance to be effective in government. More importantly, that you need inner strength to cope with an unsaid risk – that of a witch hunt.
Shortly after Rajiv’s government was voted out in 1989, Pitroda had to face a CAG audit. He went back to his entrepreneurial roots; Arun Singh retired to the hills; and Arun Nehru switched loyalties just before the debacle and signed on with V.P. Singh.
Clearly, much has changed since then. Political stability is no longer an issue in Manmohan Singh’s second term. His agenda now needs fresh ideas and better implementation skills. He also knows the government is handicapped by a lack of expertise to drive change. That is why many reckon Singh’s plan to induct senior business leaders into his government is well-timed.
To that extent, the die has been cast. By all accounts, there are outstanding people in the corporate sector ready for public service. But before Manmohan Singh can find meaty roles for them, he needs to make the new experiment work and show concrete results with his first crop of corporate babus.
It isn’t easy giving up the comforts of a corporate life for government service. But some have and they know failure is not an option. We chronicle their journey so far.
Read : Corporate Leader's New Turf-The Government
(This story appears in the 19 February, 2010 issue of Forbes India. To visit our Archives, click here.)
