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BUDGET 2016

Instead of whining about the budget, Indian businesses should help themselves

Vineet Nayar
By Vineet Nayar

India is a young country where aspirations are running high. People are coming out of our education system faster than we can absorb them in jobs. The young nation is in search for answers, and as I write today, I am worried. It almost appears as if we are a nation in waiting. Waiting for something to happen. Waiting for someone to do something. Waiting, now for the budget.

I believe there are three groups of leaders who should think beyond the budget and act with urgency, as this budget does not hold solutions to their challenges.

Traditional businesses

First, our traditional business houses that are struggling to transform themselves into global giants.

They have the resources, the capability and the management bandwidth to explore new shores and compete globally. Their growth is not restricted by the constraints India may have put on them—the world is their market, so why wait for India to become easy to do business in, why not do business where it is easier?

What would it take to increase aspirations and ambitions of these iconic brands to expand far beyond the shores of India? What would it take to transform these businesses into true global multinationals? I have watched with fascination how LEGO came back from the brink of bankruptcy over the last decade when it decided to make a generational shift in its management and its aspiration.

Similarly, traditional Indian business houses have to rethink their founder’s vision, reboot their strategy, restructure their management teams, leverage global talent and cutting edge management practices and get out of this trap of incremental change that is making them dull and boring. Now is the time to take charge and reboot and not wait for the budget to make things easier.

Technology and pharma firms

The second set of leaders is our new-age companies, especially in technology and pharma, that are learning to cope with slowing global economy and a global regulatory regime that protects domestic industry.

Over the last decade, these companies have really been the torchbearers of India’s growth and job creation story. They have some of our brightest minds and brilliant entrepreneurs who crafted India’s globalisation strategy creating a $100 billion export business and over three million jobs from virtually no existing base.

However, I wonder what is preventing them now from a breakaway acquisition, a bold investment in a new idea, a new structure to capture the value of fast emerging innovations?

With so much change in the world, both technology and pharma are very exciting sectors to be in. However what worked in the past would not work in the future. The slowing business growth rates, increasing issues around regulations and compliance, inability to attract and absorb global talent, slow progress in developing products and IP are real issues that threaten our long-term competitiveness in these sectors.

Growth companies are exciting places as their aspirations far exceed their performance. Thus, they are hungry for more—more experiments, more ideas, more people, more business.

Once again, there is nothing the budget can do to get the engines revving again in these companies.

Startups

The third is the set of young startup leaders, six of whom have created billion plus valuations in a very short period of time. They are the toast of our nation today and their success is celebrated and reported at every corner. These are our new heroes.

However, with success comes responsibility. Responsibility to build companies to last and not just to sell. Responsibility to build unique organisation cultures that foster innovation based on freedom and not fears. Responsibility to build businesses that create long-term sustainable value based on a unique offering.

Every business starts with a premise of first getting a foot in the door and there is nothing wrong with this discount-led customer acquisition strategy. The first $100 million in most IT companies was also built out of low-cost body shopping, however, the over-arching vision of the leaders took them far beyond the trap of low-hanging fruits of body shopping. We need to see similar insight, foresight and business acumen from these young startup leaders.

Thus, our new-generation leaders owe our nation a responsibility to transform their businesses and I believe the budget holds very little for them to wait about.

Needless to say that finance minister Arun Jaitley can do a few things that can ease our country’s business environment, which is currently ranked at 130.

However, I do not believe he holds the key to our future. We do.

We welcome your comments at ideas.india@qz.com

Read all our stories on Budget 2016 here.