The base that Nehru built

Nehru built a strong base for India by investing in heavy industry and infrastructure so that our industrial development could take off right?

You know what happens to people who develop a strong base right? They find it difficult to get off their base. That’s what seems to have happened.

Putting Nehru, Tata to shame

Lakshmi Mittal did not become No.1 by taking advantage of all that India had to offer, such as cheap iron ore, subsidised finance and protection against imports.

On the contrary, he succeeded because Nehruvian socialism forced him to go abroad, where he had to compete with the best in the world. His family started with a mini-mill in Indonesia producing 65,000 tonnes of wire rods. Next came a management contract, with the option to buy a bankrupt government steel plant in Trinidad. The Mittals turned it round instantly.

How? For starters, by replacing European managers with Indians. This saved $2 million in wages, and brought in superior skills too.

4 thoughts on “The base that Nehru built

  1. Beautiful piece from S. A. Aiyar. But why blame Nehru for the ills of the Tatas? Moreover the Tatas had only just finished a restructuring and started seeing good returns. So I won’t blame them too much for being overcautious.

    Another question to ponder on is what did Lakshmi Mittal’s excellent skills contribute to India’s industrialization? It certainly helped Indonesia and Trinidad. But again, I wouldn’t blame Mittal. His family agreed on dividing their father’s business into geographical spheres and also decided not to run any competing business in each other’s spheres. Mr Mittal got the international side of the business and made the best of it.

    Mittal is a truly excellent businessman. Nehru did what he had to in the 50s and 60s. Why blame Nehru for Tata’s decisions in 2001? Why blame Nehru for the indecisions of his successors when his policies had outlived their utilities? I certainly agree that India was well-poised to embark on large-scale reforms in the 80s itself.

  2. mittals certainly the best in the business of steel making.he is supposed to be a born leader.he doesn’t have a long way to go in order to be the number one in the world .its just a matter of time now .great going are the best that was ever born.
    rahul hemani,calcutta

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