After a couple of years' stint in teaching, I began my career in journalism in 1962. Through these 50 years, I have witnessed phenomenal changes in the growth of corporate entities. There has been innovative and special support by the governments at the Centre and the State level to promote enterprises and encourage entrepreneurship. Development institutions at the State level, like the Madras Industrial Investment Corporation (today, Tamil Nadu Industrial Investment Corporation), and Industrial Finance Corporation of India (IFCI), Industrial Development Bank of India (IDBI) and the Industrial Credit and Investment Corporation of India (ICICI) at the national level provided liberal term loans and equity support.

Days were also different with political leaders passionate about development and known for their integrity. Leaders like Rajaji, Kamaraj, C. Subramaniam and R. Venkataraman (RV) were imbibed with these qualities in a rich measure. RV, who handled important portfolios of industry, labour, power and transport, aided by stalwarts in administration like T.A. Verghese, could create a new generation of entrepreneurs, persuading them to set up industrial units. Initially the focus was on the traditional sectors like textiles, sugar and engineering. Soon, effectively utilising the licensing and permit regime, these sectors expanded to a range of new industries like aluminium, cement, chemicals, fertilisers, papers, viscose yarn, watches and even shipping.

I recall RV persuading M.A. Muthiah Chettiar to set up a cement plant in Karur offering the licence and support from State financial institutions. This was also enormously helped by the Union government, also administered by the Congress. Visionaries like T.T. Krishnamachari and civil servants like S. Ranganathan extended the necessary support and advice. Tamil Nadu was quickly and effectively set on the path of industrialisation.

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The experience of TVS is an interesting case. Prior to 1962, TVS was largely known for its efficient bus service in Madurai and adjoning districts, for its parcel service through Southern Roadways and for retreading and rubber parts through Sundaram Industries, as also for dealerships in vehicles and components, and for insurance and financing of vehicles.

T.S. Srinivasan, the fourth son of founder T.V. Sundaram Iyengar, acquired a large tract of land in Padi in the western part of Madras. From 1962, at quick intervals Wheels India, Sundaram Clayton, Brakes India and Lucas TVS were inaugurated. These were set up in collaboration with renowned British companies.

S.N. Ramasami (SNR), Advertising Manager of the group, was a Gandhian and freedom fighter, and had deep insights into the transport industry. Clad in khadi (a four cubit dhoti and kurta), SNR provided me with a flood of information and introductions.

I referred to the ease of setting up a company. Total investment involved in setting up Wheels India Ltd., for instance, was around Rs. 2 crore. Of this, Rs. 1.50 crore was accessed from the financial institutions. The promoters – the foreign and Indian counterparts – pitched in around Rs. 25 lakh each. There was no hassle and procedural issues like publicising a prospectus, incurring huge expenditure on promoting it to the public, getting numerous clearances, etc.

A similar process was involved in setting up any unit, be it related to textiles, sugar or other products. In several cases, if the Central FIs' funding was not sufficient, State corporations and banks pitched in.

Of course, those were different times from the present, with limited disclosures and information made available to the public. Most industrial units were closely held by the promoter families. Excepting the inauguration of a plant or such other important landmark event, there was little occasion to access information. Very few companies had public relations officers. Since the size of the media was small, for most press conferences addressed by business leaders, the number of reporters was just a handful.

I cite an instance. Tube Investments of India Ltd. was then active in the production of steel tubes, bicycles, bicycle components and metal sections. The company had appointed Markand Desai, who earlier lived in London, as its PRO. Desai liked to move around in his three-piece suit, sporting a pipe which he used to light for special effects!

In my publication, Mobile, I presented the production figures of TI Cycles and Standard Motor Products of India. Desai called me and asked for the source of my information. I assured him that I did not get the information from the company's top brass, but from a report of the Department of Industry of the State Government. The report furnished the information in a very simple format.

The next year, Desai promptly got in touch with me around June to know the production figures for the previous year! Clearly those were days not known for disclosures of such information. With limited competition, companies provided minimum information. Of course, for the media these have to be only positive!

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During the Janata Party Government (1977-79), George Fernandes, as Minister of Industry, decreed that the foreign equity holding in companies should be limited to 40 per cent of the total capital. After some initial resistance, foreign companies, with the exception of IBM and Coca Cola, fell in line. V. Krishnamurthy, Industries Secretary, who had headed BHEL earlier, introduced to the public sector the culture of greater information sharing.

Fernandes insisted that large companies mobilising capital should offer a portion to the public. Of course, the size of the offer was small, of just a few lakhs of rupees and could easily have been provided by the promoters.

In the South, Amalgamations Ltd., whose shares are almost fully owned by the promoter family, came out with a public issue for a small portion of equity for Amalgamations Repco Ltd. Of course, it was quickly oversubscribed.

Likewise, when the TVS group promoted Sundaram Abex Ltd. (now Sundaram Brake Linings Ltd), it was for a small issue. Chairman T.S. Srinivasan announced the offer at the Taj Coromandel to a small group of media persons. I sought information on the new technology that would come from yet another new collaboration (there were already two other large manufacturers of brake linings – Hindustan Ferrodo and Bramec Suri). S. Narayanan, heading Madras Auto Service and a grandson of T.V. Sundaram Iyengar, pulled me back. I heard some murmurs later that that was why they shouldn't go public!

Of course, the capital sought to be raised was too small for the group and could easily have been provided by the promoter companies.

Things changed after 1991 when the economy was liberalised, The protection offered through permits, licences and quotas was withdrawn. The Securities and Exchange Board of India (SEBI) was set up as the regulator. In quick time, SEBI formulated guidelines for corporate behaviour. Companies were directed to be more transparent and to disclose information over wider arena.

Today, several Indian corporates adopt the Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). The public is thus provided much vaster range of information than earlier. Surely, it is a Hanuman jump from the time the PRO of a company looked for production figures from a news magazine. – (Courtesy: Industrial Economist)