Star Over Telco

Mr Tatas other reported assertion, that breakups take place when MNC partners want to expand the capital of the joint venture four to five times, is more relevant here. Mercedes Benz India needs large funds both to foot losses and also to have its own factory and marketing setup, as desired by the Germans. The extremely slow sales of the Mercedes cars in India has led to a lot of soul searching and some mutual recrimination. Some say that the Mercedes models launched in India have not succeeded because they are not state of the art and have been phased out in Germany. Anybody spending Rs 25 lakh for a car would want it to be the best available. The Germans, on the other hand, have argued that the models launched here are the best suited for Indian conditions. They also cannot have been happy with the marketing of the car by Telco. The end of that arrangement has preceded the lowering of the Tata stake with fresh capital injection by the Germans.

 

Mr Tata has spoken of the shallow pockets of Indian joint venture partners but that cannot be the case with Telco which has just turned in a highly successful year, climbing to the top of the private sector league table. Also, significantly, Telco is to lower its stake to 24 per cent, thus giving up even a semblance of control over the company. With 76 per cent equity, Daimler Benz will be able to carry through even special resolutions on its own. So this is a clear parting of ways because of incompatability.

MNCs certainly cannot expect to be popular if they want to ditch a partner once he has eased their entry. But it is also true that no partnership can last for long unless both partners continue to bring in value over time. Mr Tata is right that MNCs which do not act in good faith will see their images suffer. But the Indian investor can also see through the game of many Indian businessmen who have neither technology nor capital but are only adept at playing, in league with the politicians, the somewhat dubious role of doorkeeper. But none of this applies to the present case. Neither Telco nor Daimler Benz is non-serious or shortsighted. If the partnership had worked it would have benefited both the companies.

Catch them old

For the last three decades, India has been struggling with what seems to have become an insurmountable problem: how to make civil servants more efficient and effective. Towards this end, a number of administrative reforms commissions have submitted their recommendations. So have others, like the LK Jha committee in the mid-1980s and the two pay commissions since then. Little has been done to implement these recommendations, which is why it is hard to take very seriously the suggestions put forth by the standing committee of Parliament attached to the home ministry. This committee has made a number of suggestions which are well known and sensible. However, whether the government will act on them is another matter altogether, though it must be hoped in the national interest that it will, sooner rather than later.

Thus, the idea that civil servants be made to take a mid career examination to judge whether they are fit for further promotion is a very good one. The Indian bureaucracy must be the only management instrument in the world which does not have to undergo fitness tests periodically. Currently, once a civil servant is selected at the age of 24-28 via a single examination, he (or she) doesnt have to prove himself for the rest of his career. Promotions come by seniority and good postings depend on how useful he makes himself to the politicians. Is it any wonder, then, that the civil service has become a major obstacle to dynamic progress?

However, taking periodic fitness tests, as they make you do in the armed forces, is only the beginning of the solution. It is equally important that the tests be designed properly so that what emerges is a genuine result and not a make-believe one aimed at meeting formal criteria for promotion. It is worth recalling, in this context, the tests which officers not knowing the local language were made to take after the first two years in the district. Many of them used to simply order the deputy collector or the tehsildar to write the exam, who would take care that the sahib didnt score suspiciously high marks. This sort of short-circuiting of the system must be made impossible. Actually, it could well be that it is also necessary to recast even the recruitment examinations so that it is aptitude and not just the capacity for mugged up notes which is tested. At present, engineers take exams in constitutional history, doctors in international law and economists in British history. What is more, they get in not

because of how much they know but because they know the barest minimum. The selection criteria are thus skewed in favour of smatterings of knowledge, the sine qua non for a general administrator, rather than depth, which a specialist would have. But times have changed and general administrators while being worth their weight in gold in some limited functions are now a clear liability in most occupations. So apart from mid-career fitness tests, the government also needs to tackle this problem.