- Mule in a Turf Club-IV
- A Communicator’s
experience - Licence Raj to Economic Reforms
This TVC just about sums up PEPSI story in the reforms saga!
By S.Narendra
(Former
Information Adviser to PM, Principal Information Officer
and
Government Spokesperson)
Continuing the series ‘Mule
in a Turn Club’ on challenges faced by communication machinery during the
transition from License Raj to Reforms and how one dealt with stubborn
officials and politicians when some sections feared that FDI would mean direct
threat to homemade Bhujia...
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If
we want to eat bhujia with our meals as a side dish or mix it with ‘Bhelpuri’ or just munch, we go to a corner
‘Halwai’ shop or a ‘Kirana’ shop, tear
off a packet with the salty stuff dangling from
a string of air-tight packets. Often the packet bears the familiar names
like Haldiram, Bikanerwala or MTR. No one in India had imagined in 1990s that some Indian city specific ‘Halwais’ would become
international brands with a huge range of packed ready-to-eat food stuff
successfully competing with MNCs like PEPSI. It may sound strange when I recall
that in 1992, our Parliament was discussing a dire threat to the Indian Bhujia coming
from FDI .
Another East India Company?:
India seems to have begun her economic development journey with a deep
suspicion of foreign firms, especially MNCs. This was somewhat
natural because the nation was fighting off its memories of an exploitative
East India Company that had morphed into a colonial empire that had
systematically underdeveloped its colonies. Mrs Indira Gandhi had launched an
all out fight against transnational or multi-national corporations painting
them as predators. PEPSI that had
entered Punjab in 1988-89 as a joint
venture with Indian firms such as Voltas
and RPG group ,with promises of 2,50,000 jobs in militancy –hit Punjab itself
and an equal number outside, but reneged on its
promises. The political system reacted adversely when P.V.Narasimha Rao
government liberlaised the FDI guidelines and FIPB was discussing the PEPSI
proposal to up its investment to $100 million and diversify its operations from selling sweet bottled water to food
processing,
On
the one side, the government was desperately trying to attract foreign
investment by mounting road shows for foreign investors, and simultaneously assuring the domestic political and public opinion that it would allow only
such foreign investment that does not hurt Indian businesses. Ironically, the
sections that were bitterly opposed to FDI were twitting the government that it
had nothing to show as FDI one year after liberalizing the economy. The
government was looking upon this as an ‘anchor’ investment in the sense that
once a transnational corporate like PEPSI show confidence in India, the move
could encourage other biggies to follow suit.
The Opposition parties along with some business houses had picked PEPSI’s plans
to introduce Bjujia as the ordinary person was familiar with it and, therefore,
his (or her) ire could be aroused .
PEPSI Public Affairs in Play:
As per a study by a management school alumni, there were 20 Parliament debates
spread over half a decade, and
monumental PR campaign, including a rare concession by a powerful PEPSI to alter
its brand name to Lehar PEPSI. India was not yet allowing foreign brand names. The
company’s ‘public affairs’ was working overtime to win its sub-continental game. This strategic public affairs campaign was
moving on three fronts but had
kept the rich and large ‘contract farmers’,
as its core ( Indian land ceiling
law was a hindrance to
food processing companies like PEPSI
that wanted to partner with and
procure from single or few farm producers. This was overcome by
‘contract farming’. It had engaged the
contract farmers through agricultural extension work including provision of
seeds and farm technology for growing imropved varieties of Tamatoes, chillies,
potatoes and other farm produce needed for its pizza hut and other eateries. PEPSI
also claimed that it was offering remunerative prices to contract farmers. By initially
making the Punjab government’s Agro –Industries Corporation as partner, it had
co-opted the state government, with the approval of the centre. P.M. Sinha as
CEO of its Indian arm was keeping the government in good humour. At the
other end, through aggressive market research, PEPSI had reached out to the
young consumers as well as a long supply chain of service providers,
transporters, small and big retail outlets). The MNC had organised regular
visits by MPs, MLAs and media to contract farms in Punjab. In its own business
interest PEPSI had effectively implemented a very successful CSR (of sorts).
PEPSI Tomatoes in Parliament: Of the
dozens of debates on PEPSI controversy that took place in Parliament, the one
in 1992 was remarkable for the turnaround in the political fortunes of PEPSI. When members from the left and BJP were
attacking the government for allowing PEPSI to enlarge its operations, the Parliament
members from Punjab rose in unison to counter the criticism. Some of them even
produced in the House the new varieties
of Tomatoes, chillies they were growing
with assistance from PEPSI to support their argument that PEPSI FDI was in the long term interest of farmers. Suddenly, the debate
was no longer between the opposition and
the government but was between the members of the House. In a moment, the
technological benefits accruing to a backward traditional sector like
agriculture from FDI got showcased. And, all the other sins of commission and
omission from the PEPSI venture thus far were forgotten. When PEPSI enters a
territory you can expect Coca Cola and its McDonalds to follow. And,20 years down the
line, its tag line ‘Dil Mange More’ has become
a common expression. its present
international CEO Indra Nooyi presents PEPSI
India as one of the most profitable arms, with sizable export earnings.
In
the first wave of liberalisation, the government was careful to assure that FDI
would be allowed only in limited number of sectors and certain sectors
including defence were designated as “strategic’ and no FDI was permitted and
yet the government faced fierce
opposition. FDI in media was an anathema then. Contrast this with 2014, when
NDA government announced FDI in defence and Railways,. there was not even a murmur
of protest.
A Budget Surprise: Outside the
government there is an incorrect
impression that the prime minster and the cabinet would be privy to all
major budget annoucnements. The reality is that the cabinet, sometimes even PM ,come
to know of the key budget proposals an hour or two before the presentation of the budget in Parliament. Mrs Gandhi as PM did
not know that her finance minister, Morarji Desai, would propose to bring
agriculture under the wealth tax in his 1967 budget. As Morarji Desai was concluding
his budget presentation, she passed on a chit to him to withdraw it. In 1992, budget
of Dr.Manmohan Singh, there was an announcement
to cut subsidies to DAP (nutrient) fertilisers and reduction in the price of
Urea by 10%.The PM was taken unawares. That evening, the then agriculture
minister. Balram Jhakkar, threatened to
quit.
At this time around, the farm sector was on
the decline decline. The opposition, particularly BJP, had initiated a grapevine
campaign that If India enters the World Trade Organisation, farmers would not
be able grow their own seeds. Widespread
disquiet was spreading against Rao’s steps to reorient the economy to come to terms
with market forces. The small cut in fertiliser subsidy , was both untimely
and impolitic as this played into the hands of opponents of reforms
who were already proclaiming the government to be pro-business and anti-farmers and anti-poor.
This situation required some deft handling at
the political level by the prime minister. He cleverly set
up a committee under an MP belonging to the left parties to review the fertiliser
subsidy and bought time. This also bailed out the finance minister who was in a
hurry to cut all subsidies for reducing the budget deficit, as required under
the IMF/World bank terms. In the meanwhile, on the communication front, as head
of DAVP and concurrently being the government Spokesperson, I had
to equivocate a lot for a while. I delayed publication of any print material on
the subject until the concerned department gave me clear answers to a list of
key questions that I had submitted. The Parliament committee report on
fertiliser subsidy that came months later led diluted the Budget proposals and a
larger political consensus on the subsidy issue.
Narasimha Rao was first one in PMO to have faced the political dilemmas
of an economic reformer in a transitional society and an economy with people at several economic levels. He was under pressure
from his own finance minister who was pressing for faster market orientation of
the economy with its greater integration
with the global scenario. While offering
full political backing to Dr. Singh,
and commerce minister
P.Chidmabaram, the prime minister chose to cede the title of ‘reformers’ to these gentlemen, while he set out to address
the larger constituency of the poor and the disadvantaged who were likely to
bear immediate costs of economic
changes. As he explained to me, this was not due to electoral compulsions alone
but a genuine concern for large sections of fellow citizens who could be left
behind by market forces. In his own
words, reforms must be ‘calibrated’ to suit each politico-economic
situation in order to make them sustainable.
As mentioned in the previous article, he used
the AICC session held at Tirupati in April,1992 for propounding his view that
the government will take on a new role on behalf of people who are outside the
market forces. He accepted my suggestion to use Gandhiji’s description of the
disadvantaged as Daridranarayan who would become the government’s main concern.
Reforms with a Human face: Giving a briefing to me and his junior
minister for Rural Development, Rameshwar Thakur, for ‘publicity’, the prime
minister told us that our job was to convince the rural India and the poor that the government was not
about to abandon them. He said that he wanted to create a ‘social safety net’
that was to be the main focus of our publicity. Rao also gave the title to this
campaign as Reforms with a Human Face. That message was to be woven into all
his public speeches.
Following such instructions, I travelled
to states frequently to get a firsthand account
of the progress of pro-poor schemes and
arrange for human interest stories that could be used in TVCs and advertising
campaigns. There were more than 60 odd
schemes spread over several ministries with low disposition to officiai information. It was also a fact that
very often they did not possess the latest information and were unfamiliar with
the requirements of a
sustained campaign. We began to compile
a monthly report of progress of
schemes and sent out our own teams for gathering human interest stories which
could be used in media. My orgationisation, PIB, had earmarked
funds for arranging group or individual
media persons field visits. My advantage was that the PM was not put off by
media reports of misuse of government schemes and he took them as vital feedback.
However, his worry was that the states were using the central schemes for
deriving political benefit but the blame of ineffective implementation of
programmes was laid at his door. This was a political problem that had to be
dealt through political communication whi h was failing. In order to make the
village Panchayats aware of the funds available for various schemes in their
jurisdiction, we tried to use village walls as media but it needed local
cooperation.
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All in all, the communication attempted for
the human face of reforms left us with mixed results. Writing about my
experiences now in 2015, make me wonder about the political fortunes of
Chandrababu Naidu, the new AP CM, who is
re-enacting a Narasimha Rao act; and, so also that of the present Prime
Minister Narendra Modi who is projecting pro-poor stance, shedding his label as
a pro-business CEO of Gujarat.
(www.https//Spokesperson.blogspot)
