Corporate India?s two decade old journey, post economic liberalisation in 1991, is a story of many parts. The sudden opening up of the economy to global influences, as a result of balance of payment crisis, initially stunned the hitherto insular industry into immobility, even denial. The Bombay Club, that famous protectionist group of leading Indian industrialists, with the indomitable Rahul Bajaj as its head, is now a business legend, symptomatic of the broader feeling of inadequacy amongst a large swathe of Indian businesses in early 1990s in taking on global competition that has started crowding our shores post-liberalisation.

Luckily, this tendency to hang on to the vestiges of the licence permit raj, where the market was assured once you build it (consumer goods, industrial machinery, chemicals, well just about everything), didn?t last long. Forced into the new business order, India Inc quickly learned to restructure its financial, people and process management to remain domestically competitive. Mid- to late-1990s was the period of great churn that defined new ways of tackling old businesses, whether it was technology emphasis on total quality management, six sigma et al, struggle with the concept of core competence that saw many businesses being put on block, or even professionalising management. Though still minuscule by global standards, patents awarded in the country to Indian inventors (mostly, companies), jumped almost 10-fold between 1991 and 2008, from 379 to 3,173. Even at the US patent office, patents filed by India have moved up from 51 in 1991 to 2,387 in 2007. Indian businesses were becoming leaner, meaner and globally more efficient, even as the tech meltdown of late 1990s and early 2000s has started chiselling away at the invincibility of many big global corporations. Slow economic growth in the western world started pushing global money into high-growth markets like India, Brazil, China and Southeast Asia, diversifying the source of finance for India Inc, hitherto just bank-centric. A deepening and widening of the capital markets brought with it certain global statutory and advisory best practices that enabled India Inc to adopt better governance, disclosure, risk and financial management practices. With public and foreign money becoming critical to businesses, ownership too became diversified.

Whilst in 1991, the count of listed companies on the BSE was under 1,200, currently it numbers over 3,200. FIIs own over 14% of the Rs 71 lakh-crore-odd market capitalisation on BSE, from nil back in 1991. Venture capital and private equity, just about absent in 1991, invested over $17 billion at its peak in 2007, and $8 billion so far this year. By the early 2000s, a decade of living and surviving in an open economy gave confidence to Indian businesses that they can compete with the best globally, and enabled them to plug more closely into the global business supply chains. Indian companies, big and small, in information technology, IT-enabled services, textiles, pharmaceutical and auto components went global with a vengeance, looking for new customers and suppliers. The concomitant ?revolution in telecommunication technology and business, both in India and globally, enabled Indian IT/ITeS companies to build global scale by delivering engineering services remotely. The changing structure of Indian economy into services threw up new players?in telecom, financial services, healthcare, retail, etc. Though the much-needed labour reforms that could have given an impetus to manufacturing didn?t materialise, and the biggest hope here in SEZs quickly soured due to issues of land acquisition and policy gaffes, manufacturing, in spite of all the Doubting Thomases, managed to keep its share intact in economic value added, from 14.9% in 1991 to 16.1% in 2009-10. And in many industries, like pharmaceutical and small cars, India did manage to become a significant global sourcing base, leveraging on its humongous domestic market to build scale. Even while local businesses like cement witnessed entry of global players such as Lafarge and Holcim, success at competing with the the global best in India gave ambition to many Indian businesses that started building a global footprint, largely through acquisitions?starting perhaps with Tata Tea?s acquisition of UK?s Tetley in 2000 to Bharti?s $10-billion Zain buy in Africa this year.

A 2009 study by BCG lists 20 Indian companies as the new global challengers for industry leadership, and the number of Fortune 500 companies from India stand at 8 compared to just one or two back in 1991. Such a huge change within just 20 years. Surely, the Bombay Club must have been a ?media imagination? as its ?alleged? key players now maintain.

?shailesh.dobhal@expressindia.com