We carry here the second part of an interview which N. Vaghul gave to S. Choodamani, our Chennai correspondent. In this part, the eminent banker, who is chairman of the Industrial Credit and Investment Corporation of India, talks of the attitudes of Indian businesses, and more.

domain-B: Do you think there is some kind of a disillusionment in Indian industry today?
No, I wouldn't go to the extent of saying that. You see, there are three groups of people. One group is those who have fought against the odds and have still survived and grown.

Take Reliance for example, in fact, I have known Reliance as a company right from its very small beginnings, and I know the number of attacks it has had to endure. But still they grew. They fought against odds, cases, biases, prejudices. I am not speaking for Reliance but when you talk of internationally competitive companies, Reliance is one. It has established itself as a very strong competitor. So there are groups of people who fight odds and think in terms of creating wealth not only for the country but also for themselves and for the shareholders.
And there is a second group, which accepts realities and makes the most of it. Most of the south Indian groups belong to this category. They may not have the same degree of enterprise or risk-taking as Reliance, but they have certainly not done so badly, I think.
Then there is the third group of people who are culturally unsuited for enterprise. They want everything on a platter. That will not happen in a country like India.
So I am not very pessimistic as to say there is disillusionment. There is a lot of frustration arising out of the fact that we could have been far better than what we are today had it not been for the bottlenecks.

domain-B: Talking of attitudes in the context of global competition, do you think Indian attitudes will change in the next three or four years to enable Indian companies to become globally competitive?
Attitudes change because of conviction. Sometimes attitudes change because of fear.

Take a specific case - an example. We have been saying that for Indian industry to be competitive, it has to have size. We can't have forty small players contributing to a minimal small volume of production.

Just as size is important, technology is important.

Thirdly, concentration on core competence of the business is important. We also need greater professionalism. Business should be managed by people who are qualified to manage a business.

These are integral elements of a competitive structure. Now if you test Indian industry against these things, most Indian businesses are family-owned. They are reluctant to give up any line of business in order to concentrate on their core areas.

Secondly, there is not much of professionalism. Sons and daughters, immediately after graduation, join as directors and not at lower levels. Since succession is very clearly established, there is not much motivation for professionals who are serving the organisation. So our industry lacks competence.

As a financial institution, we have been talking to many of these industries to bring about change. Attitudes will ultimately change. But whether you are going to do it by compulsion of circumstances or by conviction has to be decided.

We would have been a different nation today had we continued on the same track as when we had started out in 1985. My conviction all the time has been that this is the only road open to us whether the BJP comes to power or the Congress or the Communists. So the sooner attitudes change and change by conviction, the better.

domain-B:Can you tell us something about your style of management. What is the philosophy underlying your management style? We often also hear you quoting from the Gita in this regard.
As a chief executive, my style has always been pick the right man for the right job and give him full discretion to do his job without interference. And if you find him unequal to the task, change him and bring somebody else.The Gita is a different aspect altogether though not inconsistent with the current context.
I believe in the Gita because I am born in this context. But I believe in everything which is spiritualistic in nature and I believe that the human origin has a particular purpose and so your search for knowledge will have to lead to the satisfaction of that particular purpose. The path has been laid by the Gita. If you want to achieve the ultimate purpose of union with the divine or union with the reality, you have to know how to control the mind.

Controlling you mind relies on two factors - one is the way in which you control your desires, and second, the way in which you control your negative feelings. That can come about only as a result of detachment. Detachment does not mean indifference. You could still be meticulous and particular about the efficiency of administration but at the same time be detached from personal rewards.

So detachment does not mean detaching yourself from the results of your efforts but detaching yourself from the rewards of your efforts. Focus your mind on the job whether it is giving an interview or talking to a child. For this the mind has to be trained and not let loose. Once you are focussed on the job, do it well. And if you make a mistake, learn from your mistake and start doing it well once again.

In fact this philosophy is so simple that people unnecessarily make it complicated. Once you follow this path, you will achieve a high level of personal satisfaction.

To read the first part of the interview, click here.

To read the third part of the interview, click here.