1. Manufacturing has to happen with quality, competitive price: Maruti Suzuki’s RC Bhargava

Manufacturing has to happen with quality, competitive price: Maruti Suzuki’s RC Bhargava

The 81-year old chairman of Maruti Suzuki, RC Bhargava, shares his views on generation of employment and how to ensure better employer-employee relationships in an exclusive interview with Surya Sarathi Ray of FE.

By: | Updated: May 31, 2016 7:57 AM
"As the Prime Minister has repeatedly said, the biggest requirement for India today is creating more and more employment, which has to largely come from the manufacturing sector." (PTI) “As the Prime Minister has repeatedly said, the biggest requirement for India today is creating more and more employment, which has to largely come from the manufacturing sector.” (PTI)

The 81-year old chairman of Maruti Suzuki, RC Bhargava, shares his views on generation of employment and how to ensure better employer-employee relationships in an exclusive interview with Surya Sarathi Ray of FE. Excerpts:

How do you see the employment situation in India and how it can be improved upon?

As the Prime Minister has repeatedly said, the biggest requirement for India today is creating more and more employment, which has to largely come from the manufacturing sector. Most people don’t understand the fact that growth of the manufacturing sector leads to employment growth in the downstream sectors. It also leads to the growth of the services sector. Unless you produce a product, you can’t service it, maintain it, distribute it, finance it and insure it. If you produce a car, it also ensures jobs for drivers and cleaners. Lots of economists only talk about employment in the manufacturing activity, but they don’t look at the creation of employment consequent to the manufacturing. A lot is being done to ensure ease of manufacturing. But, manufacturing has to happen with quality and at a competitive price. The government is trying to do exactly that with “Make in India” initiative. That is absolutely the right thing. Maruti is a good example that shows that despite all the difficulties in India—inspector raj, labour laws and (lack of) infrastructure – you can still manufacture competitively. Despite irritants of other kind in India, you can still produce at competitive costs, if people are motivated to produce competitive products. The management has to motivate workers.

What are the motivational factors for the workers?

Workers must feel and experience their participation in the company. They have to understand that quality improves profitability of the company and this will lead to some part of the benefits coming to them.

Do you think that wages and other incentives also have role?

Workers want to be treated with respect. The management has to recognise the need of workers and their thinking. The management can’t take 99% of the benefit and leave just 1% for them.

What should the manufacturing sector follow?

India has followed the management practice of the western countries in which relation between the management and the workers are traditionally been that of adversaries. ILO and the labour laws are there on the premise that workers have to be protected from the employers. Historically, employers did exploit workers. However, the situation today is very different. With global competition coming from all quarters, in a country like ours with our political and social fabric, you can’t sustain as adversaries and still hope to be competitive. You have to work together, it’s a partnership.

What would be your advice to the Indian manufacturing sector?

What I can say from my experience is that Indian labourers can perform near miracles. They are so good. You have to find ways to motivate them.

Are you happy with the proposed changes in labour laws?

I think they are in the right direction. However, I also think that within the existing labour laws, we can still manage. I would still say that there is a need to change the laws. It is time for the industry to think what could be the right way to motivate workers.

What is needed to bring down people’s dependence on the agriculture sector?

The agriculture sector can’t provide employment to the rising number of job seekers. Agriculture can’t increase the per capita income of the people much. People in the agriculture sector never get the kind of income that they will require. They will have to move to manufacturing. And to do that, they have to educate, make their lives in the manufacturing sectors.

What’s your view on trade unionism in the industry?

We have only a single union for the past 30 years in Maruti. There are no office bearers form outside, no affiliation to any political party despite some governments in Haryana wanting to establish their political unions. The workers were convinced (by the management) that these were not certainly in their interests. The realization should come from the workers – they themselves have to understand what is good and what is bad. Having said that, I feel there is a need for a trade union in the company.

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