Business, EUROMONEY, Featured Work, India - Tue October 9, 2012

India’s identity crisis

India’s business leaders are increasingly concerned about the will of its political elite to drive economic growth. They see a country trapped between its past and its present, and a financial system that is quickly losing its reputed potential to be a leading global market. What can stop the rot?

Arun Lohia is a hard man to see. Not simply because he is busy. He’s also weary: ground down by bureaucrats; exhausted by hostile trades unions. In the fading summer sun, he almost seeks to disappear into his grey office wallpaper – India’s own bleak version of Philip Larkin’s Mr Bleaney, existing only in a surreal form of corporate half-life.

“There’s this word in Hindi: ‘Gherao’,” Lohia says, spreading his hands almost meditatively. “It means encirclement, confinement. Workers come in and surround you so you can’t leave your office until you meet their demands. It happened to me a year ago when three-dozen workers came in and just pressed against me heavily. They wouldn’t leave until I threw out all the new weaving machines we’d just bought. In the end I agreed. I had no choice. I really needed the toilet.”

If it’s hard to believe that such a thing can happen in modern India, with its software giants, leading universities and global corporate titans, it’s doubly difficult to credit that Lohia is no institutional small potato – a union representative, say, or a low-ranking civil servant – but the managing director and de facto CEO of Alliance Mills, India’s largest processor of jute (a natural fibre used to make textiles) that dragged in $1.4 billion in sales in 2011.

Yet this is the paradox of modern India, a country torn between the past and the future, unsure of its identity. Progressives (notably city-dwellers) see India’s manifest destiny as an industrial superpower, tilting toward the rest of Asia and the west and boasting double-digit growth rates.

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