Indian business today needs leaders like Keshub Mahindra

Keshub Mahindra was part of a glittering list of business leaders who witnessed and were crucial partners in building India post-Independence

Keshub Mahindra, the doyen of Mahindra and Mahindra group passed away on April 12 at the age of 99 years. Several people from the world of business and politics paid their obituaries to the tall leader. Over the last few years, India is losing its business leaders who not just shaped their businesses, but also contributed immensely to the growth of the Indian economy, and society.

Keshub Mahindra was part of a glittering list of business leaders who were born before/around Independence. These leaders witnessed and were crucial partners in building India post-Independence. Some of their fathers and uncles participated in the famed Bombay Plan where a group of business leaders prepared a plan for India’s development. They saw how India’s state after a promising start, became draconian for businesses.

India’s business environment saw a licence raj where one could not function without licences. This generation finally saw the 1991 reforms which prepared to undo this licence raj. Interestingly some of these leaders formed a ‘Bombay Club’ asking the government for a level playing field before the reforms. Finally, these leaders transformed their companies by realising the potential of reforms.

Education And Vision

Keshub Mahindra was born in 1923. In 1945, his father Kailash Chandra Mahindra and uncle Jagdish Chandra Mahindra formed a steel trading company with Ghulam Muhammad. The company was named Mahindra and Muhammad. After Muhammad decided to migrate to Pakistan and become Finance Minister, the company was renamed Mahindra and Mahindra (M&M).

One thing which stands out in the case of Mahindras is the importance of education and professional training. The Mahindra brothers were educated at Oxford and Cambridge. Keshub Mahindra was an alumna of Wharton School and Anand Mahindra, who now runs the company, studied at Harvard University. Dwijendra Tripathi, the distinguished Historian of Indian business, stressed that the Mahindra brothers were ‘a very small class of highly-trained professionals’ who chose to be industrial entrepreneurs.

In 1947, Keshub Mahindra joined M&M to prepare the Mahindra group’s tryst with destiny. The company started assembling Jeeps and formed a joint venture with a US-based company to manufacture tractors in India. The company also established the KC Mahindra Education Trust to provide scholarships to deserving students. In 1963, Keshub Mahindra took charge of the company after the demise of his father. In the next few decades, he exported Mahindra vehicles in West Asian, African, and South Asian nations. This was despite regressive State policies which did not encourage exports. In 1987, way before India’s information technology revolution, he entered a joint venture with British Telecom.

The Bombay Club

In 1991, the duo of P V Narasimha Rao and Manmohan Singh unleashed economic reforms. Some of India’s leading businesspersons were not keen with these reforms. The club welcomed competition but asked the government to take steps ‘to enable them to play their rightful role in the industrial development of the country’. Journalist Sucheta Dalal who first broke the story called it Bombay Club as a ‘shorthand way’. One also does not know all the members of this ‘club’. Rahul Bajaj was reportedly a leader of the club (sadly he passed away last year). Obituaries suggest that Keshub Mahindra was a member of the club.

The ‘Bombay Club’ is often criticised for promoting protectionist policies as the government was trying to liberalise the economy. In an ironic twist, some of the members of the ‘Bombay Club’ reformed their own companies whereas those who could not reform, faded away. In 2009, Rajiv Bajaj tweeted that 'Bombay Club was a ‘figment of media’s imagination’'. Dalal disagreed with the tweet.

If the club outrightly opposed reforms, it was not a well-thought-out move. However, if they supported reforms but asked for a level playing field it was not bad thinking. The history of most developed countries shows that while promoting competition, policies also need to nurture and support local companies. It is also interesting to imagine that there were business leaders who could disagree with the government policy. The government also took the views of the older generation of business leaders seriously as they contributed immensely towards India’s development. Compare this to today’s times when business leaders hardly express themselves. So much so, when there were concerns and fears over criticising the government, it was Bajaj who questioned this attitude of the government.

Inspire And Lead

Keshub Mahindra soon realised the opportunities provided by the 1991 reforms. Many businesses died as they could not handle competition and several changes. But Mahindra became a major business group in India. It entered multiple sectors — automobiles, real estate, education, travel and tourism, etc. — and became a household name.

Keshub Mahindra’s demise adds to the list of exceptional business leaders who have left us. It is true that these business leaders belonged to a different era and saw many changes in politics, economics, and society. These circumstances shaped and toughened them. India’s licence raj and bureaucracy acted as a hindrance to their growth, and yet they managed. As India aspires to grow and become a developed country, it needs to find a crop of new business leaders who can inspire and lead the development. The history of developed countries is intertwined with inspirational business leadership.

(Amol Agrawal is an economist teaching at Ahmedabad University.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.