Managing Director | 27 Aug 2010
I come from the world of doing things, I come from the world of trying to build companies out. And I think at this stage of the game it is too early for people to believe that India has lost. The flipside of the coin is that India has to work much harder to bridge this gap which has opened up. A huge gap has opened up, we can't deny that. China is four times India's size Having said that the institutional strength of India is extremely strong as well, the entrepreneurial strength of India is extremely strong as well. Where India lacks and virtually languishes frankly, is in the ability of Indian state to become entrepreneurial and take risks.
Raghav Bahl is the Managing Director of the Network 18 Group. He began his career as a management consultant with A.F. Ferguson & Co. His second corporate job was with American Express Bank, before he turned to his first love, media.
Winner of the Sanskriti Award for Journalism in 1994, Bahl has over 23 years of experience in television and journalism. He started his career in media in 1985 as a Correspondent and Anchorperson for Doordarshan. He was the Anchorperson and Production Consultant for India's first monthly video newsmagazine - Newstrack, produced by the India Today Group. From 1991 to 1993, he was Executive Director of Business India Television and produced the Business India Show and Business A.M. on Doordarshan. Bahl is also a member of the World Economic Forum (WEF). He did his Graduation in Economics from St. Stephen's College, and then did his Masters in Business Administration from the University of Delhi. He attended a doctoral programme at the Graduate School of Business, Columbia University, New York.
On eve of the launch of his first book titled 'Superpower?: The Amazing Race between China's Hare and India's Tortoise', the disarmingly simple and straight-talking Raghav Bahl gets candid and shares invaluable insights and more, in conversation with exchange4media Group's Editorial Director, Amit Agnihotri and correspondent, Shikha. Excerpts.
Q. Why this theme for your book, you could have written about the fantastic journey youï¿½ve had over the past 15 years in the world of media...
I think the media journey has still a long way to go. And I consciously chose not to write about Network 18. The recession happened in 2007-2008 and one got really very busy in coping with that. From the standpoint of our network, the recession came at a very bad time we were at the peak of making investments on lot of our properties such as Colors, In.com, Homeshop 18 and Infomedia. So a lot of energy went into dealing with that.
However, early last year we successfully put all problems behind us. India was beginning to recover and recover very sharply. But it was equally clear that crisis has a way of having a long tail before things come back to what they were before the crisis began. It was certain that it will at least take a year or year-and-a-half, and hence in that period of about 12 to 18 months, one needed to be quite patient and sort of stay in the trenches and not do anything adventurous in terms of entrepreneurship.
So I knew I had the time to write a book now than in the past few years. And someone told me that it was a good way to get back into the world of content, which is where I come from. So the book could not have been autobiographical, it had to be mainstream journalistic content. I toyed with the idea that maybe I should do a television series on this subject but also I realised that maybe I could try and do something entirely untested and entirely new. And you always have these little personal milestones human beings have and I always have that niggling doubt in my mind --- do I have it in me to really sit down and write a book? Because book writing as of now, I can say I have gone through it for a year and it is a different exercise, you require to go completely deep into a subject and come up with an argument which can sustain 250-odd pages. So to find out if I have it in me or not, there wasn't any better way to find that out than doing it by myself. That's how it all started.
As far as why this theme of China, I have been absolutely fascinated both as an entrepreneur and as a business journalist about the Chinese growth story and I didn't know much about it. On one hand it was fascination for what they have done, on the other hand I don't know much about it. Also, India is at the cusp of an opportunity which comes once in a lifetime for a country and are there lessons or contrasts that we can draw with the experience of China a country that has done a fascinating job keeping economic expansion at a high level. Combining these three to four things factored in the favour of writing a book on mainstream journalistic content, and I believe that India is at the cusp of something truly extraordinary. India and China are natural competing countries, they are neighbours, they have had a history, they are the largest countries in the world, they are fastest growing countries in the world' so there are too many parallels between the two countries. I thought it would make for a fascinating subject and frankly, once I dived into it I realised that it was.
Q. You have not given a final word about who wins this race?
I don't think it is possible to say that at this stage. I know a lot of people have made that determination and have said that China is so far ahead and that the race is over. Some very very respected and extremely talent commentators and economists have said that. I just disagree with that because I come from the world of doing things, I come from the world of trying to build companies out. And I think at this stage of the game it is too early for people to believe that India has lost. The flipside of the coin is that India has to work much harder to bridge this gap which has opened up. A huge gap has opened up, we can't deny that. China is four times India's size and even if we count some of the problems that exist in that economy and the imbalances and the stabilising factors which have emerged, the fact is they are still far ahead; the gap is just too much. Having said that the institutional strength of India is extremely strong as well, the entrepreneurial strength of India is extremely strong as well. Where India lacks and virtually languishes frankly, is in the ability of Indian state to become entrepreneurial and take risks and take bolder decisions of not thinking incrementally. That to me is the delta factor in this whole thing that the Indian state can begin to become much more ambitious, much more confident and much more risk-taking in its approach and much more energetic in the way that they do things in this country. Just like Indian entrepreneurs are building up companies and Indian farmers are facing all odds and continuing to produce huge amounts. Just as India's young population is full of aspirations today.
I think there is a civil society that is building up in India which is extremely ambitious, extremely confident and extremely aspirational. The state is lagging behind in all these attributes. So therefore my sense is that the state can reform itself and become much more confident and much more of a risk taker. If that happens, this gap can be bridged. And if that doesn't happen, then I'm afraid. China has taken up the lead and the state there with all its force is extremely focused and extremely determinant.
India has often pointed out that China is not a democracy, which I think is specious argument. The fact that they are not a democracy is a weakness, the fact that we are a democracy means we will do things much better and much more organically, carrying a much larger number of people with us.
Democracy is often used as a substitute for delays, a substitute for inability to take decisions. Democracy doesn't anywhere say that you shouldn't be taking decisions. It is becoming a convenient excuse for not doing that. The most prosperous countries of the world, the strongest countries of the world are all democracies. I think we should mix the indecisiveness and weakness of the Indian state with the system of governance. The system of governance in a democracy is strongest in the world. So what is sorted out India's weakness is actually India's strength but it is therefore crisis of leadership rather than a crisis of democracy.
Q. Where is the problem as far as the policy and the framework is concerned? Is it to do with the bureaucracy or is it to do with politicians?
It is the political leadership. Bureaucracy will do what bureaucracies ought to do. They are the executing arm of the government but it is the decision-making arm which has to take bolder decisions. Bureaucracy is like management carder of a company, the political leadership is the entrepreneur. Bureaucracy is a stumbling block but leadership is all about getting over the stumbling block. I think its leadership, you can look up at so many examples, there is no dearth of examples where you can see with more determined leadership you would have moved much faster. Land acquisition is a prime example of how we have not been able to reform our land acquisition laws for over a hundred years and all the agitations that are happening are a fallout of the fact that we don't have a modern fair law, it is not fair to the person who is parting with the capital asset which is the basis of his livelihood. So if you are asking him to give up his land and his livelihood, what are you giving him in return? You cannot base that transaction on a law which was written hundred years ago. It has to be a modern law. It has to take into account modern reality. It has to take into account the fact that if you are taking capital assets away from a man, what are you giving him in return? Are you giving him the means of livelihood? Are you giving him the means to create wealth? Are you giving him the means to empower his family to lead a productive life? All these things and there are several such examples. We haven't reformed the land acquisition bill, we haven't reformed our judicial reform bill, we haven't reformed our criminal procedure code. These are very well known things. I am not saying anything new here. It is just that the state has to bring much more focus in getting these things done.
Q. How does it happen? Is it the pressure which is built from the grassrootï¿½people on the street who will now bring about a change?
That is the hope. In a democracy clearly leadership responds to pressures from people. That is the hope but whether India's leadership will come up to the task, I don't know which is why in my assessment I am unable to come to a conclusion. Institutionally speaking, India has all the advantages but leadership is a very important thing. World over, leadership is that very indefinable thing which can make the difference in failure or success. Whether it is leadership at enterprise level or leadership at a country level. These things matter and matter one hell of a lot.
Leadership is that indefinable quality, which as I said, is very difficult to call. I am very hopeful that Indians, by the virtue of the fact that they are an intelligent race, and will throw up the required leadership for which the pressure will come from below.
Q. The fact that India has got such handful number of political parties, probably two or three or four of them...
I think democracy will give you problems and will give you solutions. I don't think fragmentation of a quality necessarily comes in the way of ability to take decisions. Whoever thought that the conservative party and the liberal democrats would form a coalition in the UK it was never thought of, it has happened today and not only has it happened but within three months of it happening they have come out with a radical budget which no one expected them to come up with. You know, not for nothing it is said that politics is the art of the possible but any number of problems can be put on the table. Yes, it is too fragmented coalition but that is the job of leadership to triumph over all of these. And democracy allows you to do it because democracy as a system is full of checks and balances, and therefore it ensures that you keep on making excesses in one particular direction but what democracy can't do is substitute for bold leadership.
Q. Talking about economy and post Lehman brothers the fact that India could rebound at a much faster pace than rest of the worldï¿½ is it a secular trend in your view and in your assessment that India is now a much robust economy in times to come?
No question about that because institutionally speaking the kind of economic structure that exists in India, is a classical economic structure. So actually there is no question that India will be a robust economy, that again is not in doubt because we are doing all the things which classically all the good economies should be doing. But that is as far as economic growth rates are concerned but the problems in India are much more in the area of social infrastructure, much more in the area of agriculture which is a shrinking part of the economy if it doesn't show up in the GDP as much but that is where a lot of your problems will come and a lot of your problems will show your potential. When we make these comparisons we make them at an absolute level that we have done well, of course we have done well, we have done very well but the word 'well' has to be juxtaposed against two other parameters. Have we performed to potential and could we have done better and have we performed to the required potential? I think those two are much more important questions. Unfortunately in our country, debate stops at have we done well? Yes we have done well. All of us are in this great moment of self-congratulation that we have done well. Of course, we have done well and we can't deny that India has done well. The next question is - have we met our potential. Have we met what is the need of this economy? There I think the jury is out. I don't think we have. There are number of people who are not going to schools, are not educated, are not literate enough, the ability of the economy to give them jobs, the ability of the economy to create food surpluses as consumption goes up, affluence levels go up and as population goes up... The ability of this economy to create security environment for itself, the ability of this country to weigh on international forums, create a voice for India which can commensurate with India's weight in the world... I don't think enough has been done. China is doing it across all of that and we need to be concerned about that. So I just believe that while we have done very well, the question is - could we have done much better and are we doing what is needed to be done which is in keeping with the requirement of our economy.
Q. So have you sought time with the government to be able to explain to them one-on-one?
The issue in India is that and it is one of the great strengths by virtue of the fact that we are an open democracy. All these things are known. By virtue of the quality of our people in government, the problems are very well documented the solutions are known, it is the question of action and political will, so you don't need to go to the government and say we need a land acquisition bill, the government knows it, you don't need to go to the government and say - listen you need to liberalise your insurance sector because otherwise how will you get the resources that are needed for such a hugely underinsured country? The government knows all of it is the question of the will, the same government is able to cobble together the necessary will and coalition to pass the Nuclear liability bill two months before president Obama is to come to India. So they overcome all obstacles and get that done as there is a discernable deadline. But since the impending crisis is not a discernable deadline it can be postponed. Since the food scarcity and energy scarcity is not a problem which is upon us tomorrow, it probably takes 10-15 years. We have the luxury of thinking you can postpone it. You don't need to go to the government, they know it. What you need to do is, I come back to it - you need leadership.
Q. How do you view the trend of eminent corporate people like Nandan Nilekani joining the government and assuming a public office?
These are the personal decisions of people. Nandan of course has gone into an enormous challenge because that is one of the transformational things that could be done and someone like him who understands the technology. So he has gone into a vertical which he is an expert at. Therefore he has chosen to take on the responsibility of delivering that vertical to the government and India at large. So I am sure that people who want to make that transition will be able to, it is a question of how much can be assimilated within the space. Again I come back to the same thing that it is not a question of dearth of people, I think there are sufficient number of IAS officers in this country who are brimming with ideas, who are brimming with solutions. It is the ability of the space to say that yes, let's take you on; let us build it up.
Q. Is entrepreneurship one of the big advantages in possession of India?
Absolutely. If you look at China, most of their big companies are state owned, most of the banks are state owned or they are owned by the communist party's top level hierarchy. So that genuine entrepreneurship which is organic is building up in China. It is not black and white that since the top hundred companies are all state owned there is no entrepreneurship in China.
In India it is the way we have been, we have had the highest incidents of private property and ownership. It is just that our state has begun to control trade and investments and industries so much in the seventies and eighties'then we saw flourishing entrepreneurship in India. So entrepreneurship is organic to India. The quality of companies that the private sector is building up, we are not seeing that today in China. You are seeing much more of state driven capitalism. But having said that, China is very good at identifying its weaknesses and then moving very fast to plug that gap. I will not be surprised if we start seeing much greater entrepreneurial ability in China. But the fact that it will yet be dominated by the state is a given, which is a weakness for China. In India, we only have legacy public sector undertakings, no new public sector undertakings have been launched in this country; everything that is happening in this country is in the private sector. There are statistics which show that the proportion of share of private sector in India's industrial activity is up from some 35 per cent before reforms to over 70 per cent. And the public sector is shrinking. This is a conscious decision as the government of India is not launching any more public sector undertakings. So entrepreneurship is the decisive advantage that India has and if we let our entrepreneurs a bit more free, I am sure this decisive advantage can be one of the critical factors in bridging this gap.
Q. How do you see India progressing over the next two decades? Where do we go from here, is it gonna be a super poor India?
Well that is the fear if we do not energetically address and try and expand the economy in a bold manner. We will be a successful economy; no doubt about that. But can we be a truly transformational economy? Can we truly transform the lives of millions of our people? I come back to it that jury is out on that. It is easy and romantic to say yes, but the jury is out on that because we haven't yet seen the level of leadership that is required for that. You need a transformational leader. In my book I ask who is going to be India's Teddy Roosevelt? Teddy Roosevelt transformed America from a promising country to a one which got itself to become a world leader. India has the potential but India has yet not thrown up a leader of that stature and a leader who thinks transformational. I am hopeful that will happen. If that happens then I have no doubt, if it doesn't happen we will be a strong economy, we will probably be somewhat like Brazil, be in the top three-four economies of the world, be strong and yet not transformational, still have large pools of poverty within the country, still have large pools of areas in the country where there is deprivation, infrastructure is lacking...We will be good, but not great.
Q. And the key determinant will be quality of leadership...
There is no question about it because everything else is in place. If you study India in any which way you look at it, the quality of leadership is something we miss. I mean why is it that our police is so ill-equipped? Why is it that they go into the battle without being fully trained? India doesn't lack in resources in giving them boots and rifles and bullet-proof vests but why is it that they don't have it? These are questions of governance and leadership, nothing else. Unless we do that we won't make a transformation from being a good and strong economy to a great economy, and you know in India we get apologetic about these things and say, why do we have to think in these terms? Of course we have to think in these terms. Why can't a normal Indian aspire to be the best in the world? Why should we tell him that these dreams are unrealistic and you should not have it? Why? I can tell you the youngsters that are coming out are going to demand these answers. Why are you condemning me to number two? It is nice and lofty and philosophical and big of you guys who are in your 50's 60's and 70's to say, oh yes, we should not be thinking in these terms. Of course we should be thinking in these terms because why should this country not aspire to be at the top end of the league, why should we be happy playing the second fiddle, what is wrong to be aspiring to be at the top? And that is where the civil society in India is throbbing with that aspiration. Look at young India. And the last thing which I haven't quite addressed in the book may be a thing to be explored at a later date. Isn't it a dichotomy that the youngest country in the world has the oldest leadership? It is a true dichotomy.
Q. Talking about Network 18 group, how are you placed now? Is the phase on consolidation over?
Yes, the last 18 months or so were tough. Not just for us, but for industry in general too. The economic slowdown hit us when we are right at the peak of our investments in many part of our business. But we have not just survived the phase but have consolidated our position and the operations. I believe that we are now very well poised to play our second innings.
Q. And how will this innings be different from the first?
I think there is a lot more we can do now. We have the size and the scale. Our management team is absolutely top class. Many of our properties like Colors, Homeshop 18 and In.com are doing well. Our news operations are stable. So we are sitting on a vantage point now. Our second innings will thus be built on a much bigger base and I am very optimistic about where we can go from here.