Click to play videoScions of the Reliance Group, Mukesh Ambani and Anil Ambani are the richest businessmen in the world, says Forbes magazine. The brothers' combined worth is $91 billion – that’s a tenth of India's Gross Domestic Product.
From telecom to retail, name it and Reliance is there. It’s their ability to manage power that is legendary in the business circles.
Reliance has perhaps forced a notoriously anti-business establishment like India's to push the envelope to force successive Indian governments to accept that generating wealth is not evil.
It's been a journey of sorts for the Ambanis from a non-descript existence in Yemen to becoming the richest family in the world, but has this long journey raised them to icons of growth for the new age entrepreneur?
Are the Ambanis a role model for India? This was the topic of debate on CNN-IBN show Face The Nation.
In the panel of experts to discuss the issue were Managing Editor of The Smart Manager magazine Gita Piramal, economist and renowned author Gurcharan Das and founder partner of Perfect Relations Dilip Cherian.
Ambanis – the wealth creators
What does the success of Ambani brothers imply – is it the maturing of Indian business or is it that Indian business has come of age in the world stage, or is it simply a stock market bubble?
“It’s definitely something more substantial. It is really the affirmation of the reforms and as for the Ambanis, I think that they will become role models now because becoming number one gives responsibility and people are going to watch how they spend money,” Das said.
The economist then explained that the Ambanis have shown how one can earn money but they are yet to show how one can spend money judiciously as he feels “spending money is more difficult than making money.”
“The first thing I would suggest to Mukesh is to give up the project of building a palace for his residence and convert it into a museum or a hospital or university. And that’s how he will become a role model, “ Das said.
Talking about the Ambani brothers and their establishment, Piramal said, “As a business historian I think this is the most extraordinary time in Indian history right now. We have more than half a million companies being formed a year and that really shows entrepreneurship is rising at the grass root level, which is phenomenal for the economy.”
Indian entrepreneurs
What makes a modern Indian entrepreneur? Is generating of wealth or managing the political constituency the main feature of the top Indian entrepreneur or is it corporate governance and social responsibility that forms an institutional role in public affairs?
“Entrepreneurship is really a passion. It’s a passion for someone who wants to create a product or a service and find the customer who is willing to buy that product or service. Things like corporate governance or creating wealth are secondary,” Piramal said.
But the convention in Indian businesses or family businesses is that once the family splits or when the patriarch is no more, the business weakens. In the case of the Ambanis opposite has happened. Even though the family has split, the brothers have done very well for themselves.
Taking a cue from the argument, Cherian said that the key explanation for what the Ambanis have achieved today is the fact that they are ambitious and they happened to be private entrepreneurs in an economy, which is growing at a blazing pace.
“So you have the right combination. They are willing to dream big and this is the economy, which is just about to start ballooning up to its appropriate size. To think is one thing and to have the ability to deliver under cost within the budget, and then be able to service a huge range of interest is another thing. From telecom to shipping to hospitals – I am almost certain there isn’t one area that they haven’t thought of entering at some stage or the other,” Cherian said.
Role of business in Indian economy
One of the major achievements of the Ambanis’ is that they have not forced governments to accept the role of business to push the envelope.
As Founder of the Reliance Group Dhirubhai Ambani once said, “We can’t change the rulers who rule us but we can change the way they rule us.”
Reflecting upon the late business tycoon’s sayings, Das said, “I think they are role models in the sense of performance. Mukesh Ambani is one of the greatest managers of our times and so a lot of youngsters today look up to that performance and they cannot help but admire him. One wishes for more managers like that. However, now that they are number one there is a responsibility and they should shed their manipulative image that they carry and should build institutions.”
While Cherian said, “This is the group that grew out of a certain level of controlled economy. The father ran the empire and then they had a situation where the next big break happened when they split. And now they have reached the number one position in global status. I think both Mukesh and Anil are today at the stage where they really need to focus on growing their business.”
The future of Reliance Retail
One of the failures of the group has been Reliance Retail. A columnist recently wrote that it’s very well to be able to create a political constituency at the top level but if you cannot manage the people’s movements then one is bound to face this kind of an opposition. Is retail one area in which Reliance is on the backfoot?
Disagreeing Piramal said, “I don’t think so for the simple reason that when you pioneer something there is going to be trouble. It has come at a time when elections are expected so such things are expected.”
“The same thing was said for Reliance when it went into mobile telephony. The same thing stated when they started Jamnagar (refinery and petrochemicals complex),” Piramal reasoned.
Perhaps, the greatest achievement for the Ambanis is that they have changed the attitude towards business enterprises and wealth generation in India, but this is just the beginning and the brothers have miles to go before they are compared to great leaders of the society like many American entrepreneurs.
Final results of the SMS poll: are the Ambanis a role model for India?
Yes - 33 per cent
No - 67 per cent
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