All are not beyond redemption. All are not destined for doomsday to face. It’s not the question of characterising an enterprise as private or public. All that the country looks for is an efficient sector devoid of a bureaucracy-driven system and meddlesome politicians. That’s how the noted industrialist and the former president of the Federation of Indian Chambers of Commerce and Industries, Ajay Kumar Rungta would like to portray the Indian industry – its present and future. The chairman of the Rungta Group of Industries is in total disagreement with those who feel that the public sector is inefficient and all is honky-dory in the private sector. Opposed to the ‘ all good, all bad’ theory the former FICCI president strongly recommends a security net for the workers to instill a sense of appertaining among them.
A K Rungta, the former president of the Federation of Indian Chamber of Commerce and Industries (FICCI) and Honorary Consul General of South Africa in Calcutta, spoke to Chandra Sekhar Bhattacharjee  and Sonali Dutta of www.tendertimes.com in details regarding PSU privatisation, health of mining and engineering industry, workers motivation and some other subjects.

Question: What is the prospect of Indian economy?
Rungta: The future of Indian economy is bright. The GDP is growing at around 6% to 7%. Our Forex reserve is satisfactory. Our bottom-line is solid and the industry segment, along with the infrastructure sector, is witnessing a gradual turnaround for the last few years. Monsoon is behaving positively for about a decade. India is a country with huge potential. Though no other country can grow without inter dependence, India is one such country which has its own natural resources, vast human resources and also a huge market. India has hills, desert, jungles, sea and what not. I have visited at least 20 countries where I have collaborated or been for business purpose but I have not found the kind of talent that we have in India. Japanese are so well trained but do not have the kind of talent and intellect that an Indian has. We are only short of capital and technology. The only thing we require is true statesmanship and leadership. There is saturation of finance and technology in the developed world. People with capital and technology there do not know what to do. They are dying to sell out their expertise. India can become a superpower by utilising these opportunities. However, we have areas of concern as well. Take the example of the inefficient system. There are several reasons for this. The principle reasons being — a) technology, b) very low consumption level, c) inadequate flow of finances, etc. One can term the present situation as bleak, but I look forward to the future with a positive attitude.
Another factor is that most of the economic policies are guided not by economic but by political considerations. If economic decisions are prompted by political compulsion, then perhaps you won’t reach the right conclusion. Lastly, I think when we do something we think only in terms of today and not in terms decades ahead. Vast technological advancement taking place in the world today which is why we are always lagging behind. By the time we execute a plan it becomes obsolete. Thus we should think in terms of 20 years ahead.

Q: Should the government go in for en-bloc privatisation of PSUs, particularly those related to the mining industry, considering the present state of the national economy?
Rungta: Truly speaking, I don’t consider the government sector inefficient and I also don’t subscribe that only private sector is efficient. There are a lot of private sectors that are inefficient and a lot of government organisation, which are efficient. It is the people who matter, the system that matters. There are systems, which can deliver good results. We should be interested in those systems and may it be random or selective. But, again, the consideration should be economic and not political for taking these decisions.
The trade unions oppose such privatisation. My question to them is that why do they oppose it? If the PSUs are not doing well, the workers will make better gains by giving those sick or ailing units to efficient hands who will do justice to those units. The employees need to be there, because without them the company cannot run. Thus, why does a trade union need to object? Unless they mean that even in today’s world by having employed in PSU they feel that they are government employees and they will get their salaries irrespective of their contributions at the shop-floor level. The trade unions must realise that an inefficient unit will not be able to sustain for too long and one day has to pull their shutters down. Great Eastern Hotel is a live example. For last so many years we are not permitting this to be privatised, that is to entrust to a person who will run it efficiently and profitably. A French hotel-chain, called Accor Asia Pacific, was willing to buy it. I don’t see any logic behind Accor’s move, may be they would like to say that Accor has a Hotel in Calcutta too. But, the trade unions stood in between. Two of the guests from South Africa were put up in the dingy Great Eastern Hotel as because they were state government’s guests. And, they have carried back a bad impression about Calcutta. They go and talk filthily about Calcutta. So, by doing this, in effect we are promoting a negative image of our country by holding on wrong things. The GEH trade unions should understand that by privatising they are not going to lose. You will have to allow a beginning for things to forge ahead. It is a service-oriented industry where several things ought to be kept in mind. The government cannot run an industry like this.

Q: Don’t you think that our system should be de-bureaucratised for the faster growth of business?
Rungta: My theory is that if you have a system where you have a minister and a bureaucrat, to be more precise, bureaucrat is there when a minister is there, the bureaucrat tempts to establish his importance. Then the only option is to change the system. If you want a bureaucrat to be there and also expect a change due to globalisation, that would never happen. Develop a system where either there is no bureaucrat or limit the number of bureaucrats. In our case, major job of the bureaucrats is providing information but we have developed the system in such a manner that even for providing information, we make people wait in a queue for too long. The process of giving permissions should be made separately. Eliminate the bureaucrats or minimise their interference to speed up the process because you cannot have both at the same time.

Q: But, why can’t the government have global standards?
Rungta: The government is of the people, by the people and for the people. People are to decide those people who are going to be in the government. Then why can’t our management be world class? May be there is something wrong in the system. According to me, the government should get out of industries they cannot run profitably.

Q: It has been seen that sometimes government goes for ‘global tenders’ and sometimes ‘Invitation for Expression of Interests’ to divest the PSU shares. How transparent the process is?
Rungta: The process is not very transparent. But, with the emergence of Internet, things have started changing. Earlier this was started for the reason that if you allow and thousands of people qualify in one go; then the decision depends on the consideration of price only without paying any attention to the quality. But, now things have become computerised and one could judge all the pre-qualification norms through a number of software. Through pre-qualification process many avoidable problems can also be eliminated. But certainly the current process is not very transparent.

Q: What is required to make it more transparent?
Rungta: I personally feel that tenders should be global and all should be given equal opportunity.

Q: What is the state of mining industry today?
Rungta: Mining industry in India, according to me, is not doing well for several reasons. The most significant problem is transportation. A proper infrastructure is also absent which is one of the keys to the progress of the industry. In fact not much has happened in the last 5 years. To sum up, the growth in the mining sector has been very nominal.

Q: What about South African response to the mining industry in India?
Rungta: South Africa is very good in Mining, again South African concept of mining is very different. Those are very big, sizes of its mines are very big and it has integrated operations. In India the mines are very small and South Africa cannot perceive the kind of mining we have in India. In India mining was a highly restricted area. Our idea was wealth that is embedded in the earth is ours and nobody should touch it. I have always said regarding this concept that ‘neither you touch nor you allow to touch’; so what will happen to the wealth? With the changes in technology, what may be important today may not be important in the future. Like plastic has replaced so many other things in the market. So, South Africa by and large, cannot think of very small thing in general mining. It is the biggest in Diamond and other precious stones mining in the world like De Beers. You will be very surprised to know that, De Beers’ mining operation is very small part of the company’s business; it is only 15% of their total operations. Yet it is controlling 80% of the world diamond market which actually reflects their size. Thus they cannot even perceive in general mining. They are very much interested in diamond mining, which is a very precious stone. In mining you have to make massive investment to scout and locate the exact place, and even if 5% of the search is successful then that takes care of the 95% of the expenses. De Beers have been here for past 3 years and even after that they have not been able to start their ground level work due to one or other regulations. They are not accustomed to such problems and thus they are very frustrated. There are various types of permission that one has to acquire before starting work. They have been granted the license but their ground level work is held up due to usual bureaucratic problems.

Q: What is the future of the engineering industry in India, particularly in West Bengal?
Rungta: The engineering industry is actually decaying in West Bengal because of some basic factors. Firstly, the setup here is old, secondly the industries are over-employed. Most importantly, Maharastra has captured the market by virtue of its modernity. Maharastra is doing much better in the engineering sector because it has started late and with all modern machinery and thus requires less labour. The labour problem is also less there. Maharashtra also has the logistic advantage of having steel and coal plants nearby. On the other hand, West Bengal did have those industries, which were not doing well. Hence the possibilities of West Bengal thriving on these industries today are not very strong.

Q: Is any new engineering industry, specially allied to mining sector, being set up in West Bengal?
Rungta: Not to my knowledge.

Q: What is your opinion regarding the motivation of the labour force?
Rungta: First and foremost, the workers should be provided with a sense of security. Without the sense of security one cannot function in peace. Employees should be provided with social and job security. In India, there is no system of security. One can be dismissed any day. The system, which prevails in other countries, is absent here. One system that is very good is in China. There the government is the employer even for the private sectors. The government employs people and the companies are supposed to pay particular wage to the government. The government keeps certain amount of money and gives certain wage to the employees. As far as the companies are concerned they can discontinue the services of the employee(s) as and when required and for this time period the government keeps paying the employees. This builds a sense of security in the employees and thus they belong to the government and they really work hard. The government is the middleman and handles the responsibility of looking after the employees. Similarly we have to categorise things in such a system. Also we can create a system where there is security and sense of belonging. This way, the employees’ attachment will also grow and he will be sincere to the work he is doing. Over 90% of our labour force are uncovered by any system, of even by trade unions. Trade Union has become a means for political vote bank. A real trade union is one, which makes the industry grow, and takes share out of it. Here, terrorising does work and the trade unions operate by generating fear and awe in the minds of the workers. There is no real trade unionism because we have permitted outsiders to come who have no interest in the trade unions. They are politically so powerful that they do not allow any democracy to grow. That is why the entire labour force has remained bereft of any benefits. It requires an entire rethinking on the part of the employers, the employees and the government. They have to reduce the interference of the trade unions to the minimal.

Q: Is West Bengal really reeling under militant trade unionism?
Rungta: In this regard its best to quote, what the US ambassador said, ‘total perception in India and even abroad is that West Bengal workers are highly militant’. Then somebody in the Chamber meeting said that now things have changed and West Bengal workers are much better. But the fact remains that perception has not changed and perception is more important than reality. The perception continues to be that West Bengal workers are either militant or they do not work at all.