Political brew

Print edition : September 08, 2006

N.R. NARAYANA MURTHY, founder of Infosys. - K. MURALI KUMAR

THE overt involvement of big business in politics, and even more so in governance, is a post-1990 phenomenon in Karnataka. Prior to this, business was viewed primarily as a source of funds to political parties and individuals, particularly during elections. These large cash flows were obviously not disinterested contributions but were rather investments, the returns for which came in the form of business-friendly policies and favours. But politics was an area that was left to the governments of the day and to professional politicians: it was rare to see leading business figures intervene directly in governance or even offer their opinion on governance and the practice of politics.

The wall separating these two segments is fast coming down. Today the voice of big business is heeded in the corridors of power in the State in ways that never happened earlier. The economic reform agenda in the State was driven by an extraordinarily successful class of Information Technology entrepreneurs who introduced a new idiom of corporate activism into politics and governance. These wealthy capitalists of self-created wealth, who come from middle-class and high education backgrounds, have demanded, with a considerable measure of success, a role in policy planning and implementation, particularly in planning for infrastructure. The Infosys and Wipro business groups exemplify this corporate culture, and the founder of the Infosys group N.R. Narayana Murthy, its business and political philosophy.

There are over 1,500 software companies in Bangalore, which together employ 26,000 professionals in IT and IT-enabled services. It generates export earnings worth Rs.22,000 crores. It is from this hugely successful stratum that the demand for better infrastructure and public financial accountability is being heard increasingly. IT-driven corporate activism is imbued with the fundamental disdain of democratic practice and the elected representatives who work the system. Its practice and philosophy is best exemplified by the Bangalore Agenda Task Force (BATF), which was set up in 1999 during the tenure of the Congress government under S.M. Krishna. The BATF was the first example of a `public-private partnership' represented by senior bureaucrats and representatives of large corporate groups. The BATF, in its crusade against corruption (which was seen as a natural fallout of a democratic system that did not demand public accountability), pressed for a model of corporate governance.

Although the BATF was wound up by the N. Dharam Singh-led coalition which succeeded Krishna's Ministry, it has left its impact on governance and urban policy planning. Indeed, all State governments from the early 1990s have nurtured the IT industry in the State with a substantial range of concessions in taxes and land acquisition which contributed to the sector's growth. Thus, the ties between business and politics have strengthened with economic liberalisation in Karnataka although in new and less conventional ways.

The case of Vijay Mallya, chairman of the United Breweries (U.B.) group, Rajya Sabha member and national working president of the Janata Party, is representative of a more traditional interface between business and politics. Mallya took over the reins of the company after the death of his father Vittal Mallya in 1983. By the time of his death, Vittal Mallya had diversified the U.B. empire into a range of allied businesses and was even able to acquire a host of breweries under the prohibition regime of the Janata Party under Morarji Desai. Today the group is a conglomerate of over 60 companies. It is the third largest spirits marketer in the world and in beer commands a domestic market share of over 50 per cent. It has a presence in the pharmaceutical industry, holds shares in Asian Age Holding Ltd. (which owns the newspaper Asian Age), owns an agrochemicals industry, is involved in infrastructure development projects, and most recently launched Kingfisher Airlines.

Mallya became a non-resident Indian in 1988. He was one of a string of industrialists who contested the elections to the Rajya Sabha in March 2002. He contested with the backing of the parties of the Janata Parivar. In an interview to Business Line after filing his nomination, he made his reasons for entering politics clear. If elected, he said, he would take up with State governments problems confronting the alcoholic beverages industry, which he felt was plagued by high taxations and trade restrictions. As an M.P. he has argued against World Trade Organisation-imposed trade protocols directed at lowering domestic taxes imposed on imported liquor brands. Mallya has called for raising tariff and non-tariff barriers against such imports.

Mallya had the backing of former Chief Minister Ramakrishna Hegde in his effort to bring together the various factions of the Janata Parivar in Karnataka. Unsuccessful in this effort, and after brief stints in at least two Janata Parivar factions, he finally joined the Janata Party in April 2003, taking over from Subramaniam Swamy as its national working president. But for the presence of its flamboyant and wealthy president in the Rajya Sabha, the Janata Party is a virtual non-entity in the State.

Vijay Mallya's approach to politics is a study in contrast to that of his business associates in the IT corporate sector. Although clear about using his position to advance the business interests of the liquor industry, he entered politics through the traditional channels, getting his hands dirty in the rough and tumble of politics and even making the gharibi hatao rhetoric his own. He has taken sides on key political issues of the day, like communalism. In fact, his maiden speech in Parliament was an indictment of the rule of the Bharatiya Janata Party in Gujarat and its sponsorship of anti-Muslim killings.

On the other side of the corporate spectrum is Narayana Murthy, who has just retired from his executive post as Chairman of Infosys. Although he has on many occasions expressed his disinclination to join politics, speculation on his entry into formal politics has been rife for some years, and indeed should he decide to contest for the Rajya Sabha elections, there will be support for him from across the political spectrum. Murthy, as representative of a new, meritocracy-based and elitist corporate culture, will influence politics in ways far deeper than before.

Parvathi Menon

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