Jan 7, 2007

Rahul Bajaj on the Indian Economy

It was a pleasure to hear Rahul Bajaj (Chairman of Bajaj, and Member of Congress) speak at the Great Lakes fest yesterday. Madhur Bajaj and he were in Chennai in connection with the marriage of Madhur's daughter and they took out an hour to address us all there.

Some points he touched upon were:

  1. Reforms need to be speeded up to bring prosperity to Indians.
  2. We need to focus on intrastrcuture, health and education.
  3. CSR is good for companies' shareholder value.
  4. Good corporate governance is going to be a law whether businesses like it or not.
  5. There are still discretionary areas with the government which gives rise to corruption.
  6. "I am for the underprivileged and the Dalits" he said, "But I voted against the reservation bill in Parliament because what they need is high quality primary education to compete on merit"
  7. I asked him if he sees a role for a the private sector in primary education, and he replied that primary education should be free until the age of 14-16 and should be given by the government. "Even in the capitalist world of the US, the world of the primary education is socialist" he said. He said that private public partnership could be looked at as a way to go forward, however.
  8. He was sceptical of a one lakh car project by the Tatas and said by the time it reaches the consumer it could probably be one and a half lakh rupees.
  9. He dismissed the suggestion that it could be a threat to the two wheeler market.
  10. He said that Bajaj would enter the four wheeler segment in the LCV segment by 2008.
  11. He also asked the students to work so that not only India is the second or third largest economy in the world but also focus on metrics like per capital income and reduce the 30% population who live on less than a dollar a day to negligible.
  12. He was categorical that not everyone needs to do a masters degree to add to the mass of over educated and underemployed people, but that people who get second and third class in bachelor's degrees should get into vocational training and add employable skills.
  13. He regretted that the Left held back the most committed economic reformers in the world like Manmohan Singh, Montek Ahluwalia, P Chidambaram and Kamal Nath.
  14. He also stressed that the Tatas were the only Indian company competing against foreign firms in the sector. However in the two wheeler sector Indian firms like Bajaj and TVS rules because the foreign firms' understanding of the market is very low.
  15. Speaking about the two wheeler motorcycle market he said that Bajaj had the value segment and the high end segment, but Hero Honda had Splendor in the massive mid-segment and they were unlikely to launch a frontal attack against Splendor.
Swati, the journalist from Business Line who was there reports on Bajaj's speech:

In a persuasive speech delivered extempore, Mr Bajaj spoke of the urgent need to bridge the gap between the haves and the have-nots. "The elite have a big responsibility," he thundered, pausing to let his thought sink in among the assembled bright youngsters who held the promise of joining the ranks of tomorrow's elite. "Wherever you are, remember that you are batting for your country," urged Mr Bajaj, and everyone listened in rapt attention.