Opinion Sanjaya Baru writes: Why brand Adani is no ‘Hamara Bajaj’ or Dhirubhai Ambani’s ‘Only Vimal’

Given the scale of Adani’s investments and ambition, his name may well come to be identified with India at some future date, if he manages to recover the ground lost by the Hindenburg expose and the various regulatory enquiries underway, but he is not there yet and the journey has become tougher. For his company to be identified with his country, Adani would have to build a social base among investors and consumers that his infrastructure-focused and politically-connected business has not yet helped create.

Governments or consumers do act in favour of or against certain companies and brands as part of a larger geopolitical narrative. When George Fernandes, as Union industries minister in 1978, asked Coca-Cola and IBM to quit India, he was not just directing his aim against those companies, but at the US. Indian companies have also either benefitted or paid a price for being viewed as representatives of India, especially in our neighbourhood. The Tatas faced problems in Bangladesh, GMR in the Maldives, the Dabur group in Nepal and Adani in Sri Lanka.

Adani may have raced forward to catch up with Mukesh Ambani to become the richest man in Asia, using many of the stratagems that the senior and junior Ambani used, but with a significant difference. Dhirubhai Ambani built his business empire creating a massive shareholder base. No business leader was given the kind of farewell that the citizens of Mumbai gave him when he passed away in 2002, marching in their thousands, behind scores of political and business leaders from across the country, in the funeral procession.

Dhirubhai won widespread public support at home, especially among the vocal middle class, both by building an army of shareholders, sharing his prosperity with them, and selling branded products that they loved. “Only Vimal” became his calling card. Both Ambani and “Hamara Bajaj” had intimate links with powers that be in successive governments in New Delhi and across the country. They protected these links by building a wider support base among shareholders and consumers.

Gautam Adani tried to get onto the fast track of using political links to secure government contracts, invest in non-branded infrastructure and raise funds from big financiers, mainly based overseas. The social base of the Adani group was limited by both the nature of its business, mainly infrastructure, and the method of its financing, mainly institutional and unidentified overseas investors.

Given the nature of the business environment in India most, though not all, business leaders find it necessary and helpful to maintain political links. In my book, India’s Power Elite (Penguin, 2021), I have examined the historical evolution of the nexus between business and politics, noting that the phenomenon of crony capitalism, rooted in a “licence-permit-control Raj” of the past, is today defined by a “regulation and investigation Raj” where business fear is politically encashed.

One could argue that capitalism has always been defined by cronyism, entailing an interdependence between business and government, be it in a democracy or in an authoritarian system. Unhappy with the growth of what some have called “state capitalism” in the 1950s, the late JRD Tata funded the Swatantra Party, a political party that espoused the ideals of “free enterprise” and stated that “the business of the State is not business but government”.

While Jawaharlal Nehru told Tata that the Swatantra Party would not go very far, G D Birla told a meeting of the Indian Chamber of Commerce in Calcutta: “I can tell you from my political experience there is not the slightest chance for any Swatantra Party or any Jana Sangh or any other party to come to power to replace the Congress. You can break the Congress. You can weaken it, but it is not going to help. You will be replacing this government by a Communist government and they will be the first to cut your throat… Therefore, I say that with all its faults I support the Congress.”

Substitute “Swatantra and Jana Sangh” in that quote with Congress and Congress with BJP, you could then substitute Birla with Adani. It’s that belief that there is only one centre of political power that often makes business persons place all their eggs in one basket. There are hundreds and thousands of companies, big and small, that have grown on the strength of their entrepreneurship and professionalism. However, there is no denying that dozens of big business groups are where they are today because of political patronage.

Certainly, till now, Adani has been a beneficiary of his visible proximity to Prime Minister Narendra Modi. Now he pays a price for it, for few would believe that he became so wealthy so quickly merely on the strength of his enterprise and business acumen. While politicians need funds to win elections, business persons seek or need, or made to feel they need, political patronage to carry on with their business. This relationship of interdependence has grown with time despite changes in the political dispensation, in New Delhi and the states.

The writer is a policy analyst