By Sameer Kochhar
While large businesses in other countries are often seen as national assets and supported accordingly, in India, the legacy of historical economic policies, association with political scandals, and opposition narratives have created a more contentious relationship between big business and public perception. However, Indian businesses have nonetheless played a crucial role in the country’s economic growth, technological advancement, and integration into the global economy.
Recognising their contributions without overlooking the need for transparency and fair competition remains challenging for India’s ever evolving economic landscape.
“We are not in the business of short-term profit and hoarding wealth,” says Mukesh Ambani. Reliance Industries is the most valuable company in India and one of the biggest wealth creators for investors globally.
Only a handful of elite traders used to run the country’s premier stock exchange, the Bombay Stock Exchange, until Dhirubhai Ambani, founder of Reliance Group, went public through the initial public offering (IPO) of Reliance Industries in 1977. RIL’s 2.8 million equity shares of Rs 10 each were issued in its 1977 IPO. The issue was oversubscribed seven times, and the company’s shareholder base grew to lakhs. Dhirubhai Ambani’s move is credited for engaging small investors in the stock market and equity shareholding.
Rs 1,000 invested in Reliance IPO in 1977 is today worth around Rs 17 lakh. The number of shareholders of RIL is close to 35 lakh. There are also indirect investments by common people through financial instruments like Mutual Funds, Pensions and Insurance Schemes. As Mukesh Ambani and his family control the majority 50.33% stake in the company, they are the biggest beneficiaries of this massive wealth creation.
By definition, businesses are there to make a profit. Naturally, the person leading a successful business will see an increase in his/her wealth. If that wealth is used to accelerate the country’s growth and, in the process, create more wealth, that’s a huge service to society and the nation. Mukesh Ambani’s assertion that RIL is not in the business of “hoarding wealth” has significant meaning and message to society, especially the political class.
It has become fashionable to attack and criticise businesses for everything. In several cases, businesses are criticised even if they are not directly related to the issue. The businessmen who have been bearing the maximum brunt of consistent political attacks in the past are the Ambanis and the Adanis.
Gautam Adani, who leads Adani group conglomerate, frequently comes under political attacks. Adani Enterprises, then known as Adani Exports, launched its IPO in September 1994, around 17 years after the Reliance IPO. In the past three decades, Adani has made tremendous contributions to the country’s infrastructure development. Be it airports, ports, or renewable energy, Adani is at the forefront. Adani operates mostly in capital-intensive sectors, which are critical for the country’s growth and development.
This criticism and attack on companies and business leaders are not new. Tatas and Birlas dominated the Indian businesses in the 20th century, especially in the post-independence period. They were often accused of crony capitalism, benefiting from their close connections with politicians and bureaucrats.
Both these groups have evolved and continue to make immense contributions to the economy, not just by creating wealth and jobs but also through philanthropy. Mahindra is another prominent business house that has evolved and flourished post-independence. These business houses have created some of the best educational institutions and healthcare infrastructure.
In 1981, I stepped out of the grand Taj Mahal Hotel with tears streaming down my face. I had just been turned away for a job as a bellboy. I was only seventeen. At that moment, I felt the crushing weight of “garibi, berozgari, bhukhmari aur mehangai” — poverty, unemployment, hunger, and inflation. These were not just words; they were my reality and that of millions of others like me, making up the bottom 90% of the population. Half the country lived below the poverty line, struggling to meet even the most basic needs. In my frustration and despair, I found myself cursing names like Tata and Birla, feeling they were part of the reason my future seemed so bleak.
The early 1980s were tough times in India. The economy was bogged down by shortages, inefficiencies, and sluggish growth. For many, industrialists like the Tata and Birla families symbolised the vast divide between the rich and the poor. They were seen as wielding too much power, and their businesses were blamed for the concentration of wealth and the stranglehold on economic opportunities. Voices of dissent echoed the blame, from leaders like Jayaprakash Narayan to leftist parties and reports from the Monopolies and Restrictive Trade Practices Commission. The phrase “Tata-Birla ki Sarkar!” was not just a slogan; it was a cry of anger and frustration from those who felt left behind.
But life is full of twists. About a month after my rejection, the Taj Group began hiring for the new Taj Palace, a fresh venture of the Tata Group. To my surprise, I was called back and offered a job. Suddenly, I found myself in the company of hundreds of other young men and women from backgrounds just like mine. We were now dressed in suits and ties, ready to serve in one of the swankiest hotels in the country. For a moment, it felt like the gates of opportunity had finally opened, and I stepped through, leaving the bitterness and blame behind; I would have kissed Mr. Tata’s feet had I met him.
My first encounter with a computer was at the Taj Palace. A WANG was running the first fully computerised hotel in India. We were all trained on the novelty. We were taught French and even given psychological training. All the time, I have been thinking, why is Mr. Tata investing so much money in anybody like me?
I finally saw him the day Prime Minister Indira Gandhi died. I was now working for Pertech Computers Ltd, thanks to my skill upgrade at the Taj. I was sitting with Mrs Shastri, his secretary, waiting to show him an electronic typewriter when she got the news and ran in to inform him. I had missed my chance to thank him in person.
Dhirubhai Ambani pulled Mukesh Ambani out of Stanford to join his business in 1981. By 2003, Mukesh Bhai was a legend in his own right, having set up Reliance Communications Ltd. He never rested on his father’s laurels and was clearly preparing Reliance for India’s digital future. I was making a documentary film on the dematerialisation of stock markets in India, which was then a huge reform.
Someone suggested that I interview him for the film. I laughed; why would he care to speak with me? I was told of his deep interest in digitalisation and the role of NSDL in making Indian markets world-class. As luck would have it, my friend, Ashish Kumar Chauhan, now CEO of NSE, worked with him and could make it happen.
Sitting with him, our conversation even then revolved around how he sees a Digital Future for India and his belief in the country’s youth. He shared a vision that I had seen in reality only in the US until then. In May 2003, I visited the sprawling Reliance Corporate Park in Navi Mumbai. What I saw was thousands of people working on cutting-edge technologies surrounded by plentiful infrastructure and facilities. This was better than the US. This was the New India.
In 2015, I was in the same room as Gautam Adani—just the two of us. I was waiting to meet a Secretary at North Block. This very affable man was sitting besides me, smiling ever so politely. It was Gautam Adani, and I have not stopped kicking myself since for failing to recognise him and at least shake his hand for what he has achieved coming from such a humble background.
It was only last year that I had the opportunity to deep-dive into the Adani Group and Reliance Industries to understand their contributions to ESG and how they are working towards becoming India’s greenest companies and generating employment that is spatially dispersed, equitable, and sustainable—the inclusive growth that India needs while on its path to becoming a developed country.
As a reforms historian, I had a ringside view of post-reform India. I have documented policymakers, politicians, and institutions and what they have changed for India. I now desire to document the contributions of Indian Corporations to Socio-Economic development – Bhumiputras of Bharat.
Job creation is undoubtedly one of the biggest challenges facing the country. Of the country’s 140 crore people, just around 1.4 crore are involved in government jobs. As per the International Labour Organisation (ILO) 2024 report on employment in India, the country’s working-age population (15-64 years) stood at 97.2 crore in 2023, out of which only 58.6 crore were employed. The organised sector, private, and government put together employed 15.2 crore people.
An analysis of the ILO data shows that out of every 100 jobs, just 2 are in the government sector. Around three-fourths of the country’s population is still engaged in the unorganised sector, but most of the organised sector jobs have been created by the private sector.
The Economic Survey 2023-24, noted that employment generation is the private sector’s real bottom line.
“It is worth reiterating that job creation happens mainly in the private sector. Second, many (not all) of the issues that influence economic growth, job creation, productivity, and the actions to be taken therein are in the domain of state governments. So, in other words, India needs a tripartite compact, more than ever before, to deliver on the higher and rising aspirations of Indians and complete the journey to Viksit Bharat by 2047,” the Survey noted.
In 2021-22, factories employing less than 100 people constituted 79.2% of all factories while contributing only 22.1% of total persons employed and 20.9% of workers. This has improved over time as there is a visible trend towards a rise in larger factories.
Compared to a broadly constant number of smaller factories, the number of factories employing more than 100 workers saw 11.8% growth from FY18 to FY22. Thus, in terms of total persons engaged, employment has risen in bigger factories (employing more than 100 workers) than in smaller ones.
Addressing the recent AGM, Mukesh Ambani announced that RIL added over 1.7 lakh new jobs during the year 2023-24. “If we include both traditional and newer engagement models of employment, our headcount is nearly 6.5 lakh today. Among all of Reliance’s record achievements so far, this one will always hold a special place in my heart because employment creation for India’s talented youth has to be our top national priority,” Ambani said.
Adani’s core businesses are infrastructure, power and mining. Besides providing direct employment, these sectors play a crucial role in creating an enabling ecosystem where SMEs thrive.
Born into a middle-class family, Gautam Adani today runs a business empire worth over $200 billion. The Adani group, which consists of 10 publicly listed entities, is ranked among the top three industrial conglomerates in India. Adani’s net worth is over $100 billion, and Mukesh Ambani’s is also over $100 billion. Depending on stock market fluctuations, these two business titans have been among the top two richest Indians in recent years.
The rise in a competitor’s wealth may create envy. As a country, we should celebrate such wealth creation as long as it is used to further economic activities and create jobs.
India has made remarkable progress in the Ease of Doing Business under Prime Minister Narendra Modi-led government. In the World Bank’s Ease of Doing Business, India jumped 79 positions from 142nd in 2014 to 63rd in 2019. Higher rankings (a lower numerical value) in the Ease of Doing Business indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
These are undoubtedly important for promoting business. But what about the businesses that have already created thousands of jobs and wealth for millions and are more likely to scale significantly?
The answer lies in giving them respect for doing business. The road to success in any field is long and winding. It requires a lot of hard work, dedication and perseverance. The chances of failure in business are far higher than in other fields. Over 80% of start-ups don’t survive for 5 years. This is despite the government having developed several enabling policies to handhold and support start-ups. Their contribution to the economy, providing jobs, and creating wealth for millions of investors must be recognised and celebrated.
‘India Involved Interventions’ instituted by SKOCH Group recognises and celebrates the interventions made by corporates in the country’s socio-economic development. We have developed an index that measures India Inc.’s commitment to Developed India by 2047 vision. In our 2023 ranking, which assessed companies on 231 indicators, Reliance Industries topped, followed by Hindustan Unilever, Adani Group, Bank of India and Lupin.
Our six-month-long study conducted in 2023 showed that 40% of corporates are focused on Digital Transformation, followed by Environmental Excellence (24%), Corporate Excellence (19%), Social Excellence (14%), and Governance Excellence (2%).
We strive to make a similar study this year as well. The rankings and the study are based on comprehensive indicators, so active corporate participation is desirable. We invite corporates to nominate and share their innovative and impactful interventions.
"ESG BEYOND COFFEE TABLE"
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