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In Conversation with Mr. R C Bhargava

October 9, 2018

Mr. R C Bhargava is currently chairman of Maruti Suzuki. A graduate of Allahabad University, he topped the 1956 batch of the IAS, and served in the Uttar Pradesh cadre. He later joined Maruti in its nascency as its third employee, and subsequently led the company to its position as the number one automobile company in India. He has been conferred with prestigious civilian awards by both the Indian and Japanese governments. He was invited as Chief Guest at the Convocation ‘18, where Watch Out had the honour of interviewing him. Here are some excerpts from the interview.

You were an IAS officer who later switched to Maruti in its formative years. This is an unconventional career path, people generally don’t do this.

Yes, at the time there weren’t many examples of people leaving the IAS and joining the Public Sector because rules had changed. You could only go for deputation for 2 years. After that, you had to either come back to the cadre or take absorption in the public sector. I was one of the first few who did this.

Any reasons why you chose to switch to the private sector?

It wasn’t private sector then. Initially, the Suzuki stake was only 26% so the company remained a public sector company. That was in 1982. In 1992, it became 50% Suzuki and 50% government. So legally it changed its character and did not remain a public sector company. But with 50% stake of the government, it almost worked like a PSU. The company got listed in 2003 which is when it became a private company.

Why do you think this career path is so uncommon (going from the civil services to a corporation). Is it because the skill set required is different?

I’m not sure but I think that one of the factors is that going from the Civil Services to an industry carries a certain element of risk. You are secure with Civil Services, your career path is known to you and your future is virtually mapped out, not much can change. At that time, Maruti was not considered as a normal public sector industry, it was looked upon as a highly political project. Also, not many people expected it to last too many years. So, it was somehow a little more risky than the others. But, I wasn’t particularly enamored by spending my 10 years with the government. I didn’t see any future after those 10 years either because those days are not like today. In 1982, there were very few job opportunities in the private sector as there was virtually no private sector. So there were no job opportunities after retirement. Looking at all of this, I thought to take a risk as it can’t get too much worse than it would be otherwise.

Were the UPSC examinations as competitive back then as they are now? Nowadays we hear of cases where people spending years and years of their lives trying to crack the Civil Services?

There weren’t as many tutorials and coaching centres at that time as there are now. The exam was in some way harder because for the IAS, one had to give the three lower papers (three subjects) and then if one wanted to be an IAS or the foreign services, he had to appear for two more papers of higher standards. Whereas, for the other Civil Services, it was just the three lower papers. That has certainly changed now. The exam has become easier but the number of people appearing for it is much larger now. The attraction of the services is still there but actually now the competition to the IAS is much larger from the private sector. Creating things and doing things yourself are much larger outside the government. The government still needs good administration but not beyond the actual areas of admin.

Maruti has become a household name just like IKEA in Sweden or Samsung in Korea. So your main flagship project throughout all these years must have been the Maruti 800? Do you think that the Maruti 800 started an era of car ownership in urban middle class homes?

800 is what we started with and it became an enormously popular car at that time. It was almost a status symbol in the first few years, because there was a scarcity and it wasn’t easily available. Later on with the advent of new models, everything became different.

And absolutely! It was the first time that people got a low cost modern car in terms of technology, which drove very well, which had all features that people had not looked at earlier, high degrees of reliability. All of that came for the first time in India. That is why it became so popular, because people were used to Ambassador, Fiat etc. and compared to that it was several levels above in technology. Cars in India had not changed technology since the 50’s. Till the 80’s, it was the same basic technology of cars. And the quality and reliability of cars had only gone down, it hadn’t improved. Then suddenly people got a car which could perform so much better, it had to become popular.

In the automobile industry nowadays, especially in the US, there is a lot of talk about the self-driving cars and followed by Tesla, even Ford and other big companies are making their own tests. So do you think this has any medium to long term scope in India?

Well, you have to consider two or three factors in India. First, there is a huge need for creating employment in India and every year several hundred thousand jobs for drivers are created. For every four or five cars sold, there is one driver. Think of the number of people who rely on driving as their source of employment. When will we be able to afford not having these jobs so that people find alternative employment is a big question mark. The second thing is that if you want to have driverless cars, then the software is based on a certain degree of predictability so as to what people might do in different situations. The behaviour of drivers in India is the most unpredictable. So, I am not quite sure how will we build a software system which could cater to the erratic and unpredictable behaviour of drivers in India. Cutting lanes, people randomly stopping their vehicles on the highways would only create chaos in the system.

You were involved a lot with Suzuki and Maruti, especially a lot in the formative years at the time when they acquired their stakes and all. So you have seen the automobile industry up close both here and in Japan. Any major differences you see now or you saw back then?

Not only in the automobile industry, Japan also became a highly competitive nation. It is the most competitive country in the world in terms of its manufacturing industry. Japan has no natural resources (energy, raw materials) and still their products are competitive in the global market. They can ship their products to the US or Europe and they can still beat the local ones. They are able to overcome the cost barrier of import, export, transport etc. Japanese industries manage to do this through human resources working as a single team.The Japanese industry is based totally on team work. Not only with the employees in the company, or labour or management,be it anybody; other associates such as vendors, dealers; industry and the government; industry and the political parties, they all work as one team to promote Japanese industry. None of them believe that the industry is a thief which wants to take out their money, as it happens in India. This is because the industrialists in Japan live a much low-key lifestyle. Their salaries are less, they don’t accumulate wealth as people do in India. They have realised that you can’t take your money with you when you go; it stays behind. And if at all it stays behind, we should think what good can that money do to our children. They have worked these things out very well. The Japanese industry stands very different from the world because of the constant need to be meticulous.

Do you think it is down to their ethos as a culture or as people to some extent?

It has become a culture because the people felt the need to become competitive since Japan was totally ruined after the war. Japanese people have a great amount of self-respect. They are very patriotic. They commit ‘harakiri’ which is a ritual in which they kill themselves if they seem to lose faith. After the war, the Japanese actually lost faith and had no other way to regain it. The only way to become competitive again was through economic activities. They decided that if they become the most powerful economy, then they could regain faith which is actually what happened. Japan is a highly respected country not because of their military might, but their economic might. If India wants to grow faster, we’ve got to stop distrusting each other and start to work as a team.

Research in Indian institutes, including the IITs, has been improving a lot in the last decade or so, but yet there remains this perception that research is this thing that academicians pursue in their ivory towers, you know, that it’s often unrelated to required real world or commercial applications. The idea of industry-oriented research, the way it happens in the US or in European countries is kind of lacking?

You want to do research because you want to develop new and better products and technologies, which give customers a better experience. If you do that, then you expect that your company will grow and become more profitable.

In India till 2014 conditions for Industries to grow and be competitive were really quite inadequate. You know if you study our system, industries are the lowest priority of the politicians. Input costs electricity for industry is priced higher than for any other activities. Industry pays the highest, yet gets the last priority.

Things are changing now in certain sectors, it has become competitive with Mr. Modi. The taboo of industry is growing and prospering as gone. He wants industry to grow. This is the first time somebody has said that they want the manufacturing sector to grow. The first time that there isn’t any rhetoric against the private sector

Do you think there is anyway, in which companies like lets say maruti could somehow collaborate with these institutes for research?

Certainly. Absolutely that’s it there has to be more interaction between the institute’s and companies and research has to be taken up.

Apart from the existing theoretical research there should also be more research which is industry oriented.

Here last night, we were discussing that you create patents in the IIT, professors do their research a lot and fight for patent, how many of those patents have become commercial? All the research you have done and caught something that you patent, but if it doesn’t get used by anybody, then what have you done useful resulted in wastage of your time. So that thinking has to change. Academics often don’t think highly of commercial business , instead pursuing knowledge for the sake of knowledge itself. There’s nothing wrong with that, but it can’t be the only thing which you push. There has to be some kind of a mix between the knowledge creation and commercialization of knowledge

What do you think is the most stark difference between India now and India in the eighties?

Those were the days of control, and the license raj.

So that time you couldn’t do anything without government permission. Imports were not allowed. Today you can import what you want. Those days everything had to be cleared by what is known as director general of technical development. Foreign exchange a huge constraint. And the private sector and money making and becoming rich and all those things were absolutely frowned upon.

Technology of course has made a lot of difference to India that you know things like this.

Everything was in short supply. If you wanted a phone connection you had to wait for years to get a phone. Wanted to buy a car you had to be in for years to buy a car.

When I got to Delhi in 1973, I was in UP and then – mobile for five years, even to buy milk you had to get a permit to get your milk supply. Everything was in short supply. Railway wagons were not available. Telephone calls could not be put through: you had to book a call and wait for your turn before you were connected from Delhi to Kanpur.

These changes are almost unbelievable. One now wonders, how did one manage In those days. This whole computer business didn’t exist, internet didn’t exist.

On a closing note, any general advice you would have for students here, especially the graduating students who you will be addressing?

I think you people here are the elite of India’s intelligentsia. by you people I mean in the IITs, and IIMs. You can’t leave the task of India’s development only to the government. Over many years people in India have built up this attitude. That ye kaam to sarkaar hai. Even if it’s something to be cleaned ~ Sarkar karegi, if there is something not working ~ Sarkar mein kharaabi hai.

It can’t work that way. If you want this country to become a better country for yourself- and you guys have got 70 years to go- Who will do it for you?

Believe me, the political system won’t. You don’t expect things from the government. You have to do it yourself. You have to get involved.

Don’t distance yourself.

That is when things will happen.