With the threat of reservations looming over the private sector, is Indian industry doing enough to help the weaker sections? And can it convince the government that affirmative action is the right way of tackling the problem? Those are the critical issues that Karan Thapar raises in an exclusive interview with the Vice President of CII, Airtel’s Sunil Bharti Mittal.
Karan Thapar: Mr.Mittal, lets start with what the PM said last month at the CII conference, “ I urge industry to seriously consider enhancing the educational and employment opportunities for weaker sections in an affirmative manner”. And then he also said, “Commit yourself voluntarily to making your employee profile more broad based and representative.” Do you interpret that as a call for voluntary quotas or affirmative action?
Sunil Bharti Mittal: I would say it is not a quota. There was never a
mention about slice and dice your company into quotas, but yes, he came out very clearly that the industry needs to do something.
Karan Thapar: So, newspaper interpretation as for instance those of The Times of India, which claim that the Prime Minister is asking for voluntary quotas, do you think they are mistaken?
Sunil Bharti Mittal: It’s really how you put it. Voluntary quota is an oxymoron. You cannot have a ‘voluntary’ and a ‘quota’. I think every body picked up the message that the Prime Minister wants to do something, there has been political pressure of quota, so I think it got synced into it.
Karan Thapar: Prime Minister also used the phrase “weaker sections”.
Does that in your interpretation include OBCs or is it restricted to Scheduled Castes and Scheduled Tribes?
Sunil Bharti Mittal: This is debate which rages on. From our point of view, weaker sections are all those that are economically backward. I would take them as all those people who are underprivileged today.
Karan Thapar: That includes then the OBCs ?
Sunil Bharti Mittal: Yes, everybody.
Karan Thapar: The UPA’s Common Minimum Programme says, “The UPA government is very sensitive to the issue of affirmative action including reservations in the Private sector.” Do you believe the government might change the constitution to bring in reservations or do you think it is unlikely?
Sunil Bharti Mittal: It’s my belief that its unlikely that there will be major legislation around this. Industry needs to strengthen the government’s hands, it needs to show some action, needs to do something. I think government will fall short of going through legislation.
Karan Thapar: So, your belief is that the government may talk about reservations, but it won’t actually go around amending the constitution to implement them?
Sunil Bharti Mittal: I believe so. I would tend to believe that the government has the good of the nation at heart and there is not much good that is going to come out of a legislation.
Karan Thapar: If the government were to surprise you and actually implement reservations, how would CII react?
Sunil Bharti Mittal: I think it would be wrong for me, at this forum, to take a position on behalf of CII, but I would say if there is a law then it needs to be followed.
Karan Thapar: But would you consider going to the court like Rahul Bajaj, who has twice been the president of CII in the past, said should be the case?
Sunil Bharti Mittal: I would say that anything that is going to hurt the industry’s competitiveness will have to be fought. At what forum, which place, courts or outside courts or politically, needs to be dealt with. Until the time that will not be turned away or reversed I think we will have to follow the orders.
Karan Thapar: So, your stress is that anything that is bad for the industry has to be fought.
Sunil Bharti Mittal: Yes, absolutely.
Karan Thapar: That is how you view the government’s position. Let us now turn to the industry’s position itself. In a recent lecture at the Cornell University, Ratan Tata said, “Industry has a responsibility to the 60 per cent of India’s population that is not industrialised and is living in rural areas. He added, “Industry cannot create wealth without making an effort to spread the wealth.” Do you agree with it?
Sunil Bharti Mittal: Absolutely. I’m a strong believer that if India has to get its complete benefit of its large population, big market, if you will not carry those weaker sections of the society, if you will not aggregate the eastern part of India into the mainstream, India will never get its glory, never its due weight in the world party.
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Karan Thapar: So, this a duty and a moral commitment that the industry has.
Sunil Bharti Mittal: I believe so. It must have. Whether all of us have it is hard for me to say. But I believe that this is something that the industry must have right in front of their agenda.
Karan Thapar: Ratan Tata, in his lecture also said that if young Indians cannot find a place in the sun, if they can’t aspire to the dreams that they see on the television, India could see the makings of a revolution” In other words he said it wasn’t just the question of social justice, it had to do with the future and the integrity of India. Do you accept that?
Sunil Bharti Mittal: To a large measure, yes. There are now 630 million people in the working edge. All of them don’t have equal opportunities. Over 55 per cent of India is below 25 years of age. This India is growing up. They are watching, as Mr Tata said Televisions. They are seeing items of conspicuous consumption, they have dreams and aspirations and if these aspirations will not be met, if there will not be a revolution, I think it will be generally creating a tension in the society, which will not be good for India.
Karan Thapar: So this is a question, which has to do with the future and integrity of India and is certainly not a minor matter?
Sunil Bharati Mittal: It is not, indeed not.
Karan Thapar:It’s quite clear from what you are saying that industry has a commitment and duty. The question arises - to what extent has industry already fulfilled its commitment and to what extent does it needs to take specific measures hereafter to do so. Companies like Ashok Leyland, Hindustan Lever claim that already 55 per cent of their workforce is OBC, SC and ST. Do you those companies as unique or may there be many, many more companies just like them?
Sunil Bharti Mittal: First of all, these examples that you have given, clearly demonstrate that there is no active discrimination. People are not going and actively discriminating in the market place. The fact is there are certain areas in the country, for example the northeast, or if you go to the eastern part of India, you will clearly see that large number of people from the backward sections of the society and underprivileged are being hired. And that’s not because you actively go and look for them, but because the supply is much larger. You come to places like Delhi, Mumbai it’s much lower; service industry, white collar - much lower; go to deep manufacturing- much higher. Companies like Levers, Bajaj and many others actually have very high percentages of people from SC, ST and even OBC.
Karan Thapar: And you are also suggesting that the companies like Bajaj, Lever and Ashok Leyland are in fact not unique, but there are many companies like them that perhaps have 50-55 per cent of their workforce from these three castes?
Sunil Bharti Mittal: I believe so. If the industry were to take a roll call, I think everybody will be surprised. The question is - should we take that roll call? We believe that it should not be taken.
Karan Thapar: Alright. That’s on a matter of principle, but were the roll call to be taken in practice, everyone would be surprised.
Sunil Bharti Mittal: I believe so.
Karan Thapar:Your president, Mr Seshasayee said speaking to the Financial Express, and the whole thing has been reproduced on the CII website on 24th of April says that in manufacturing industry, perhaps up to 35 per cent of the work force comes from the backward classes. He added that in the services industry the percentage would be considerably greater. Does that mean that industry is already doing a lot to fulfill its commitment?
Sunil Bharti Mittal: What I can confirm is, that the acquisition by some segments, that the industry actively discriminates does not hold ground at all. There is no question when you are hire anybody, you ask where you come from and therefore you don’t hire people who are from that segment of the society. The issue is - people coming from their segment of the society are not skillful, they do not have the skill sets or the wherewithal to have the full opportunity available to them.
Karan Thapar: Your first answer was that the industry doesn’t discriminate. Does that mean that the industry is the victim of a false impression?
Sunil Bharti Mittal: I would say, to a large extent - yes. If you look at the total organised labour in this country, even I was surprised – it is only 8.1 million people, that it! And that is all in an organised way, rest is all through contract labour, temporary work force.
Karan Thapar: So when people say that industry discriminates against SCs/STs and OBCs, that in a sense is in fact prejudice?
Sunil Bharti Mittal: I think it criticism which is ill founded. Certainly.
Karan Thapar: Now, in fact, the government owned NSSO figures - the latest of which came out in 1999 - show that the share in employment of SCs/STs and OBCs is almost exactly proportionate to their share of the population. Do you think this corroborates your point?
Sunil Bharti Mittal: I’m not aware of this data, but assuming that it is correct, it just corroborates that there is no active discrimination.
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Karan Thapar: Surjit Bhalla writing in Business Standard just about 15 days ago on the 15 of April, quoting from and developing upon the same NSSO figure, showed that even if you look at individual jobs, the share of OBCs in those jobs, whether they are managerial at one end or clerical and agricultural at the other, is again proportionate to the share of the population. Much the same was true of SCs and STs, except at the very top managerial and sales levels. So again, do you think that all these government figures show that the industry is doing enough, and that there is no need for prejudice about it?
Sunil Bharti Mittal: I think what’s coming out very clearly from all these data is the points that you have mentioned - the industry is doing enough in terms of the people it is employing. But it is reaching out beyond what they are doing.
Karan Thapar: Is ‘reaching out’ a question of making the point understood by people, or is it that you need to do more? Is it presentation or action?
Sunil Bharti Mittal: I think both. We are all awaiting very keenly for the JJ Irani report which will come in the next 5-7 weeks, which will bring the data points that will make the picture much more clearer to the country that the industry is doing enough.
Karan Thapar:In the meantime, referring to the CII figures – that your president Mr Seshasayee has been giving and that are there on your website - also referring to the NSSO figures that we just discussed, what then did the Prime Minister mean when he called upon industry to ensure that its “employee profile was more broad based and representative”? Do you get the feeling that he perhaps didn’t know the true picture?
Sunil Bharti Mittal: No. I would again confirm the same point; the Prime Minister has been urging the industry to do more- active, show more activism in this area and demonstrate that they have been doing enough.
Karan Thapar: Except for the fact that the Prime Minister didn’t acknowledge the point that Mr Seshasayee makes or that the NSSO figures make that the industry already is doing a lot. That acknowledgement was not there. He is calling for more without acknowledging what you have already done?
Sunil Bharti Mittal: No, I think we have to give the due to the Prime Minister. He made himself very clear that there is a large segment, which needs openings in the corporate sector, large amount of people out there who are not getting equal opportunities. My dear friends, the government can’t do it alone-that was his message. Please join me, strengthen my hands in doing this job.
Karan Thapar: You, as Vice President of CII and Chairman and Managing Director of Airtel, have no quarrel either with the content or with the manner in which the Prime Minister made his comment?
Sunil Bharti Mittal: Absolutely, not at all. Personally speaking, I would say that it’s a clarion call by the Prime Minister of a country, which has been taken in the very right spirit. Lots of people in the industry, who were generally very strongly opposed to any action from the government’s side, have been quite happy with the Prime Minister’s appeal. They all said - We need to do something.
Karan Thapar: So, even though the NSSO figures and your own president believes that the industry has done a lot, you believe there is still room to do more?
Sunil Bharti Mittal: I think so. May be not in the area of employing people, but in the area of making them employable- that’s the difference we are making.
Karan Thapar:Mr Mittal, CII produced last year a document called Strategy for Affirmative Action. The document says the industry would like to engage in a programme of affirmative action for the economically disadvantaged living in towns and rural areas. My question to you is what exactly does it means in concrete terms?
Sunil Bharti Mittal: Well, it means that the industry needs to reach out to the people at large, around the clusters where ever they are manufacturing or having operations. If you recall, in the last two years, the programme of adopting ITI came into play. Industry must adopt the ITIs which are languishing, which are not providing vocational training. And industry has started doing that.
Karan Thapar: So, my point is simple. Is this an indication of intention and goodwill or is it a determination to take meaningful concrete action. Which is it - goodwill or real action?
Sunil Bharti Mittal: I think everything starts with a goodwill. We have departure from a socialistic mindset where industry had to do its job and ...
Karan Thapar: But does it go into action after goodwill?
Sunil Bharti Mittal: Oh, absolutely. Goodwill is the first building block for action. And some of the actions have already started.
Karan Thapar: I accept you point that without goodwill, you can't have meaningful action. The problem is that sometimes goodwill remains goodwill and action doesn't follow. Let me tell you why many people are doubtful of CII. Your document says that this will be a voluntary code where the companies themselves set targets and milestones. The problem is, would a voluntary code be a meaningful code or would it just be clichés and would the targets that you set yourself be challenging or would they simply be convenient?
Sunil Bharti Mittal: I think it's going to be a mix of both. Some people will just give lip service. If you look at the CSR activities coming out of annual reports, some are really meaningful, chunky, solid stuff and some are just lip service. So, it will be a mix of both.
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Karan Thapar: You are being incredibly honest. Problem is what proportion would be just lip service.
Sunil Bharti Mittal: I think increasingly it's going to be more action.
Karan Thapar: Think or hope?
Sunil Bharti Mittal: I believe. Because today, that has a direct correlation with your market share, brand and with your market capitalisation. And those are tangible things.
Karan Thapar: Let me tell you why people are sceptical. Looking at the document that you produced last year, amongst the things that you said you would do -- you itemised giving scholarships, assisting schools, helping with midday meals, setting up mentor groups so that young people could be guided. The problem is all of that sound like NGO-style charity rather than concrete action.
Sunil Bharti Mittal:Well, you know, thankfully NGOs are also becoming concrete. Now, young people are getting into NGO as a career. MBAs are coming in, M techs are coming in. There is a big change. So, NGOs are no more the old fluffy stuff, where you put in a few dollars and hope for something to happen. Concrete work is going on.
Karan Thapar: But you are talking about NGOs as places to create a career. I am talking about the nature of advice that NGOs give people. Here, I am suggesting that what you are proposing to do in a way of affirmative action, sounds like charity rather than concrete action.
Sunil Bharti Mittal: I would say, Karan, there is always a thin line between these two. We announced our plans yesterday. We put in Rs 200 crore for opening hundreds of schools.
Karan Thapar: This is Airtel itself, you personal company.
Sunil Bharti Mittal: This is not Airtel, this is the Mittal family. And Airtel will contribute a small little piece out of that. And this is open hundreds of schools around the country. Hopefully, thousands eventually. Is this philanthropy? You can say, tick mark that it is philanthropy. I think it's an affirmative action. It is really responding to the Prime Minister's call. Thousands of young children, who can never get to education, especially girl children, migrant labours' children will be educated.
Karan Thapar: I would acknowledge readily and immediately that what the Mittal Foundation is doing is not just admirable, but it's perhaps even incredible. The problem is - to what extent will CII and the Indian industry respond with the same large heartedness. Let me tell you why I make this doubtful query. Of the 11 proposals last year that CII tabled, in this particular document, we are talking about, the most concrete was your commitment to set up training centres. But what you didn't go on to talk about was guaranteeing jobs thereafter? There was no mention of that whatsoever. What people want is not training, what they want is jobs. But there you were silent.
Sunil Bharti Mittal: Let me give you an example there. If you train people, if you educate people, I think you need less to guarantee jobs. Because if the economy is not kicking in, you will not be able to give jobs. Bharti School in IIT, set up with a grant of Rs 20 crore from Bharti Foundation, is now churning out dozens of students -- going up to 200 students. We were hoping that we will be the last resort for the employment when most of them will come here. And we had given a solemn pledge, you get educated, we will employ you. Not one is coming to Bharti, they are going to Ericsson, they are going to Nokia, they are going to IBM. They are becoming employable.
Karan Thapar: So you are training people for your competitors in the States. And that's a valuable thing to do. I agree with you, the more you train people, the better their chances for jobs. The problem is -- you also know this -- in India, there is a wall of prejudice that is very difficult to break down. A fully qualified SC/ST student has a much more difficult time finding a job than a Brahmin or Kshatriya student with the same qualifications. And quite often, even in industry, contacts, kinship network, biradari ensure jobs for people who aren't as well qualified, and SC/STs and OBCs simply don't have those biradari and kinship network to help them.
Sunil Bharti Mittal: I have to disagree on this one.
Karan Thapar: You sound very reluctant in disagreeing.
Sunil Bharti Mittal: No, I am absolutely in disagreement. Because if you go to any one of our canteens around the country, you will not even know who's who.
Karan Thapar:How often do you take them beyond the canteen level into management?
Sunil Bharti Mittal: There are many of them. There should be many of them.
Karan Thapar: Enough of them?
Sunil Bharti Mittal: I would say there should be many of them.
Karan Thapar: Should be?
Sunil Bharti Mittal: Because I don't take a roll call, I don't even know.
Karan Thapar: If you were to, what do you think the answer would be?
Sunil Bharti Mittal: I think, the answer would be pretty good.
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Karan Thapar: I will tell why at the end of the day people are sceptical about the voluntary code that CII so far has been talking about. Because it is simply voluntary. Not only is it insubstantial in the way that we have discussed, but it's voluntary nature means that you can't guarantee every CII member will implement it. Some may, some may not. It's all dependant on trust.
Sunil Bharti Mittal: Yeah. But I would say that's the way forward. Otherwise, you are talking about legislation. I mean there is nothing in between. It's either voluntary through having role models, through doing some stuff and others following it. Let JJ Irani report come through, two things will happen there. One, they will tell you what the industry is doing.
Karan Thapar: And second?
Sunil Bharti Mittal: Two, what industry will do. That will be an action plan, which will come out that committee.
Karan Thapar: Let me suggest to you a model that has been practiced extremely effectively in South Africa, which could in fact be a way out of the problem in India. South Africa has what's called an Employment Equity Act, which requires all companies that employ more than 50 people by law and under legal sanction, to implement a series of affirmative action measures. Not quotas, but affirmative action. Could you agree to that?
Sunil Bharti Mittal: I would say let's try. Give it two years for affirmative action by the industry on a voluntary basis.
Karan Thapar: And then this could happen?
Sunil Bharti Mittal: If we fail, then let the government start looking at these measures.
Karan Thapar: So you are saying, try us and test us voluntarily first. If we fail than convert to something that's legally enforced.
Sunil Bharti Mittal: I would say yes, give us a chance to prove that we mean business.
Karan Thapar: One of the things that makes the South African law so effective and substantial is that under the law, the phrase suitably qualified isn't just a simple question of formal qualification or work experience, it also includes the capacity to acquire within a reasonable time the ability do the job. In other words, employers have a duty to bring less qualified candidates because of their caste background up to scratch. Can you accept a similar duty and commitment in India?
Sunil Bharti Mittal: I not only accept gladly, we are doing it now.
Karan Thapar: You personally? But will other people accept it?
Sunil Bharti Mittal: I think again it's a matter of how do you want to serve your customers. Let me give an example, a very interesting one. I have got 10,000 people on rolls, that's organised people. I have got 10,000 people off-roll, that is through contract. These are the people who serve my customers. We have decided to bring them into the organised form.
Karan Thapar: And make them fully on-roll.
Sunil Bharti Mittal: They are already. Every month, 800 or 1,000 are coming in. They are all at the low end. And I can tell you, I can hazard a guess here, 50 per cent could be out of this category that we are talking about. Fifty per cent, because they are all at the low end, linesman, people who go and fix phones, because they need to be trained, they need to serve the people better.
Karan Thapar: But the thing is, you are probably an exceptional individual. What I am really questioning is will all the other thousands -- millions may be -- of entrepreneurs in India accept the same responsibility to find candidates from STs, SCs and OBCs and spend effort in training them to bring them up to scratch? You believe they will do that?
Sunil Bharti Mittal: I think there is no choice. Because if the customer wants service and if you want somebody from the contract level to serve them, you are going to lose market share.
Karan Thapar: In other words, this has to be done in the interest of the business rather than out of charity or goodwill.
Sunil Bharti Mittal: I think, today the good news is all sorts of CSR activities are also good business.
Karan Thapar: The South African law goes a little further. It also requires individual companies to prepare annual employment equity plans and to regularly report to the government on their fulfillment. Would you be prepared to go that far?
Sunil Bharti Mittal: That is only if you go beyond voluntary. The point is if the government says fine, do it voluntary, but report. That's one action, then you need to report as a part of your annual report as a part of your submission to the government. Other part is that things actually start getting better. Don't you believe, Karan, in the last two or three years, things have become better.
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Karan Thapar: The question is - have they become good enough and are they becoming better at a rate that is acceptable?
Sunil Bharti Mittal: I would say it takes a long time for these benefits to percolate down.
Karan Thapar: Except that do the poor in India, the disadvantaged have time on their side?
Sunil Bharti Mittal: I think they are getting impatient, they are young. They will not wait for too long.
Karan Thapar: In other words, industry must move even faster?
Sunil Bharti Mittal: I believe so.
Karan Thapar: So your answer to the government is give us two years to implement affirmative action voluntarily and giving a commitment that we will actually make serious efforts to train and bring people up to scratch so that SCs/SCs and OBCs are not excluded. But then, if we fail, impose the same affirmative action by means of legal sanction?
Sunil Bharti Mittal: Well, I won't say go and hit us with legal sanctions. I am saying try us out, we will deliver.
Karan Thapar:But then, if you have to do it, then do it two years later.
Sunil Bharti Mittal: Yeah, give us time to perform.
Karan Thapar: So at the moment, your plea to the government is - trust us, give us two years, we won't let you down.
Sunil Bharti Mittal: Absolutely.
Karan Thapar: And you are absolutely confident that when you say this, you are speaking for the majority of industrialists in India?
Sunil Bharti Mittal: I would say in the last 10-20 days of this debate, within CII at least, every and anybody that has been on the table for discussion supports this view.
Karan Thapar: So it's the voice of Indian industry, not just Sunil Mittal.
Sunil Bharti Mittal: I would tend to believe so.
Karan Thapar: Sunil Mittal, a pleasure talking to you on Devil's Advocate.
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