Chronicling 2 decades of radical change

Two decades may not be a long time in Independent India's history.

But the last two mark a critical turning point — a radical shift even — from Nehruvian socialism to Manmohanomics, from mixed economy to market economy, triggering unprecedented changes in nearly every aspect of life.

This newspaper, born and brought up in this era, has tried to capture the change in all its diversity and make sense of its complexity, as accurately and objectively as possible.

First edition

When the first edition of Business Line hit the news stands on this day 19 years ago, a gram of gold cost just Rs 468. Today, you will have to fork out nearly Rs 3,080. If you wanted to travel abroad, you had to shell out only Rs 31.88 to buy a dollar; today, it will set you back by Rs 54.

The National Stock Exchange, which would soon rival the Bombay Stock Exchange, was still being set up. If you wanted to buy or sell shares, you had to route trade through brokers, who would shout in the BSE’s trading ring to be heard above the din of compatriots, to execute your order. It took more than a week for the share certificates to change hands.

Today, as Business Line steps gingerly out of its teens and enters young adulthood, all these and more have changed.

Physical to online

The open outcry system sounds antediluvian. You no longer need to hold shares in the physical form. They are credited or debited to your account electronically. You can buy and sell shares online, sitting in the comfort of your home. The BSE is no longer the pre-eminent stock exchange that it was. You can track share prices on television screens or on your computer monitor.

On January 28, 1994, Business Line ’s Market Flash column on the front page said the Sensex closed the previous day at 4,069.39. Besides the Sensex, the column also carried MSE (Madras Stock Exchange) and DSE (Delhi Stock Exchange) indices.

Business Line had also its own barometer of the market— the BL 250 index. This was “…a portfolio of 250 stocks that… designed comprehensively to capture and disseminate the underlying spirit of the Indian economy…”

The Sensex, after several violent fluctuations, is now nearly more than four times where it was in January 1994; many would have made their millions in the market but some, unfortunately, would have lost their fortunes. Business Line has captured all these and more, accurately as they happened, day after day.

Outward looking India

The indices are now more prone to external influences — either from foreign institutional investors or the sentiment in global exchanges — and react to developments overseas, proving yet again that India is no longer an insular economy that it was two decades back.

Business Line ’s front page no longer provides information about either the MSE or the DSE; very little trade takes place in the regional exchanges. The National Stock Exchange came into being and is a worthy competitor to the BSE.

When Business Line entered a fiercely competitive market, there were already three well-established financial dailies. Today, there are a couple more, not to mention the nearly half a dozen business news channels in English, which track the business and economic developments live.

Business Line noted in its first editorial, “On a new line”: “The Hindu Business Line makes its debut today. This is a time when India and the rest of the world are very much on the move forward. Icons and entities once believed to be sacrosanct and permanent have disappeared; notions such as inviolability and immunity of domestic policies from outside scrutiny and influence are being reinterpreted...”

Govt and reforms

It is the era of coalition governments. Manmohan Singh, who, as Finance Minister in the Narasimha Rao government, set off a wave of economic reforms, now heads a coalition government.

Coalition governments are also why reforms have happened in fits and starts. Politicians explain this away as due to coalition compulsions, but it leaves companies and investors confused. Things move, but not as quickly as one would like them to. Most sectors are now open to foreign investment. Despite coalition compulsions, the Government has sold its stake in some of its companies.

In the early 1990s, it was the Bombay Club that grabbed headlines as far as Corporate India was concerned. Made up of some of the big names in the corporate world at that time, it was derisively dismissed as a group that stood for protectionism. The Club itself asserted that it was only asking for a level-playing field, at a time when the economy was being thrown open to foreign competition. No one believed it then. Now, no one talks of the Bombay Club.

Even as the private sector has marched ahead, the public sector units too are not lagging behind. In spite of the constraints they face, the public sector giants have proved they are second to none when it comes to performance.

The Y2K bug

India Inc has gone global. Large groups such as the Tatas and the Birlas have bought companies overseas. The information technology sector helped establish India’s brand image overseas, thanks to its expertise in solving the Y2K bug around the turn of the century. Companies such as TCS, Infosys and Wipro are as much global names as they are Indian companies.

The automobile market has undergone a complete transformation. Cars and motorcycles are no longer a luxury. Maruti, the market leader, has become a subsidiary of Suzuki of Japan and is now a listed company. Maruti Suzuki continues to be the market leader, but it can no longer afford to take its leadership for granted. A number of companies are snipping at its heels. India has become a hub for small-car manufacture and a major exporter of hatchbacks. You name the manufacturer, it is in India.

India Inc story

Ratan Tata, who took over as Chairman of the diversified Tata group at the beginning of the 1990s, stepped down at the end of 2012, after an eventful tenure and after transforming the group into a global player.

Mahindra & Mahindra, a manufacturer of utility vehicles and tractors, is yet another company that has gone through a complete makeover. From being a utility vehicle and tractor manufacturer, it is now a diversified group.

Reliance Industries saw a whole lot of upheavals, after its founding chairman Dhirubhai Ambani died in 2002. His two sons — Mukesh and Anil — divided the empire after an acrimonious parting of ways.

Tech revolution

The early 1990s was still a pager market, a gadget that none in the younger generation will even know, what with the weaning on the latest smartphones and tablets. It is now a mobile telephone market, with leading global players such as Vodafone and home grown market leader Airtel and others battling it out.

With aspirations, air travel soared. Barring the government-owned Air India and the private sector Jet Airways, none of the other private airlines of the 1990s operates now. A handful folded up, but new ones have taken off making air travel competitive for the commuter.

Infrastructure is no longer the preserve of the State. As the government realised that it will not have the funds to meet the growing demand for roads, airports, ports, power plants and highways, it has encouraged the private sector to provide most of these facilities. That, of course, comes at a price and is not without hitches.

Downsides

The two decades have not been without problems. As public resources were being given to the private sector, it has given rise to scams – in allocating spectrum for telephony and in granting coal mining rights. If it was the Harshad Mehta stock market scam in 1992, the 2G spectrum scam and irregularities in coal block allocation dominated the headlines towards the end of the second decade. The country is on a higher growth trajectory. Criticism that the growth is inequitable and widens the gap between the poor and the rich continues, not without reason.

Emerging entrepreneurs

Family businesses have split, some amicably, some acrimoniously. Some family owned companies have brought in professional managers to run the show, while they continue to be shareholders.

As technology reduces the role of the government, more and more youngsters are using technology to become entrepreneurs. A growing number passing out of some of the elite technical and management institutions prefer to have their own businesses, rather than carry the business card of a multinational company with their name imprinted on it. That is the confident India, which too Business Line has chronicled. The economic changes have resulted in a rapid growth in the services sector. Graduates are no longer dependent on government-owned banks and companies for jobs. The private sector, especially the IT and BPO industry, visits campuses in Tier 2 and 3 towns to recruit graduates. Women employees now work late hours in the IT sector, something that is still not possible in the industry.

Growth of electronic media

State-owned Doordarshan’s monopoly over the air waves has ended. Hundreds of private television channels catering to every possible genre beam their programmes over satellites, the signals of which are received through set-top boxes in the metros. Films have gone digital. So too have cinemas. Multiplexes lure movie buffs with the latest of sound effects and viewing experience. Private FM radio stations play programmes round the clock.

In the early 1990s, India Inc was still taking baby steps into the global market. It now struts around with confidence, buying companies abroad or establishing facilities across the world or getting into partnerships with foreign companies, some in which they are majority owners and some others where they are in a minority. Over the next 12 months, Business Line will capture the dramatic changes that have happened in the last two decades, coinciding with the newspaper’s own growth in the world of financial journalism.