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MNCs are no less Indian

Dinesh Kumar

ARE MNCs any less Indian than Indian companies? This question may sound blasphemous and anti-Indian, but wait a moment before passing judgement on it. Let us, for instance, take two companies -- Cummins India and Kirloskar Oil Engines Ltd (KOEL). Both bu ild engines, cater to the same market, have similar applications and service an almost identical customer base. Both make profits and are located in Pune. After taxes, they hold something in reserve for future plans and distribute the rest to their share holders.

In KOEL, all the shareholders are Indians, and in Cummins, the majority reside outside India. But both the companies' shareholders took and continue to take similar financial risks. The employees of KOEL and Cummins, right from the chairperson to the sec urity guards, are Indians, and so is the consumer market. This being the case, is Cummins India less Indian than KOEL? If so, why?

Some may try and sidetrack the issue by talking of the colour of the money. Even this argument does not hold water, as the dollars are first converted into rupees by the RBI before Cummins India can enter into any transaction in India. For that matter, i s Philips India any less Indian than Videocon? The latter is reportedly setting up shop overseas. Is it alright to be an Indian MNC but not the other way around? What about Ingersoll Rand and Kirloskar Pneumatic?

Some may argue against dividend repatriation to non-Indian shareholders on an on-going basis. If their money was good enough to start a green-field project on which profits could not be made in the initial phases, what is wrong with dividend repatriation after taxes and out of the surplus funds generated? How many Indian companies would have been able to invest Rs 2,500 crore in a greenfield car project as Hyundai has done? Look at the value chain created in India by just one product and one company.

Let us take the case of HLL. No one sees it as a multinational because it has been around for years. The company's customer base is Indian, and the majority of its products are made by Indian companies, dedicated to HLL. These companies are sure they wil l continue to get orders without any marketing efforts, because HLL is an expanding entity. No other company in India has made rural marketing such a fine art, because of which people living in the villages have access to the same products as the urbanit es. The icing on the cake is that HLL earns dollars for the country through exports. What is wrong with this arrangement? To accept this requires a change of mindset.

Studies reveal that we need billions of dollars for infrastructure projects -- education, Defence, irrigation, health and education. Where is this money going to come from? How can we source the billions required to raise our per capita income from a mea gre $350 to a figure that compares favourably, at least with countries such as Malaysia and the Philippines?

My last line is for the Indian industrialists. Are Germans anti-German because they allow Toshiba into their country? Are Americans anti-American because Toyota establishes a factory in the US?