Who is responsible for India's mess - Rahul Bajaj Speaks

Have you heard this idiom "elephant in the room"? In English language, this is a metaphor for a situation where everyone knows the obvious truth but no one talks about it. Indian corporates are generally known for keeping mum in matters concerning the role of government in the functioning of the industry.

But finally, one bold gentleman has decided to point the elephant. The man is none other than the outspoken industrialist Rahul Bajaj. Speaking at the World Economic Forum, he set off a full-blown attack on the government. He stated that the reason for Bajaj Auto's success was the fact that it did not deal with the government at all. In fact, he went on to say that the corporate group had decided decades ago that they would not enter any business that would require dealing with the government. Evidently, both the group companies-Bajaj Auto and Bajaj FinServ Ltd - are into motorcycles and financial services respectively. Neither of these companies manufactures or buys anything for the government, nor do they have to go through any bidding process.

His jibe at the government didn't end there. He stated yet another harsh reality that appears to be at the heart of India's economic problems. Mr Bajaj said that his company had "piles of cash" on its balance sheet. Despite this, it had no plans to invest in power plants, coal mines and infrastructure development projects. Why so? The reason was to avoid frequent contact with government officials. This one sentence speaks volumes - "I want to sleep well at night."

This episode raises several questions. What is the real reason that is hindering investments in India-availability of funds or investor confidence? Why do investors shy away from investing in companies or industries where government intervention or proximity to the government is high? Why do public sector stocks typically trade at a significant discount to their private counterparts? All questions seem to point to one answer- a highly corrupt and inefficient government.

The above is from the mail I receive from Equitymaster.

This is the other Rahul not Rahul Gandhi, who is a useless person just depending upon his lineage to gain power.

When Rahul Bajaj speaks, everyone sits up to listen.

He has achieved all that could be expected of a visionary.

He has divided the Bajaj empire amicably between his brothers unlike some of the other industrialists who made an acrimonious break-up which left permanent ill-will in the family.

Be it the Birlas, Modis, Mafatlals or the Ambanis and many others, they all had disputes which tarred their reputations in the market.

He has also passed on the baton to his son Rajiv who is carrying on from where Rahul Bajaj left off.

It speaks of his vision that while he built his empire during the era of controls in India, he has been able to adjust post the reforms ushered in the 1990s and taken on the might of Honda.

I still remember the time when the different Bajaj models like "Chetak" used to command a premium and a delivery time of over 6 months. In contrast Hindustan Motors, Premier and Standard Motors could not adjust and have been wiped out.