Burying the hatchet

According to statements released on Sunday evening,Mukesh Ambanis Reliance Industries Limited and Anil Ambanis ADAG have followed through on the instructions that they were handed by the Supreme Court recently,and have reworked their relationship. It is very good news that the long period of disagreement between the two groups of companies might be coming to an end. The brothers have essentially agreed that the various micro-level agreements that they had signed with each other,and which had continued to be the cause of much bad blood and continual legal disputes,would stand invalidated,and that henceforth there would be clean,healthy,open competition between their groups. The hope here is,of course,that this marks a genuine attempt on the part of the two Ambanis to bury the hatchet.

That is not only long overdue but very welcome. The two halves of Dhirubhai Ambanis Reliance group are such a significant part of the Indian economy that their squabble had real,and profoundly negative,effects. Remember,these are companies that,put together,produce probably between six and seven per cent of Indias GDP; they contribute more than twice that in terms of indirect tax revenue to the government; and they dominate sectors communications,petrochemicals that are crucial to Indias growth. Not only did their shareholders have a right to expect that they concentrate on their profit margins,but all those with a stake in Indias economy will be glad if they reorient their focus away from each other and towards creating value for themselves and for India.

Their long and bitter rivalry has been a disappointingly divisive element in Indias public life,poisoning politics and policymaking. Game-changing mergers have been delayed. Crucial infrastructure projects have been held up. This is not something that India could continue to afford over the long term; there is wisdom in accepting that an agreement must be arrived at. In the end,just as the break-up of Reliance enforced a level of financial transparency on the groups companies,this agreement will help the Ambanis,help their shareholders,and help Indias economy. And thats good for all of us. Lets move on.