Throwing the Baby with the Bathwater

The Indian School of Business has been ranked 20th in a list of top 100 B-schools around the world. While this is a proud celebration moment for alumni of the school located at Hyderabad, it merely reinforces the conviction of its founders who, ten years ago, set out to create an Indian B-school to rival the likes of Wharton and LSE. This news brought back memories of my student days in 1998, when it was announced that ISB would be established in Bombay. After weeks of front-page tamasha, the school decided to skip India's commercial capital in favor of relatively unknown Hyderabad. As a proud Bombayite, (despite what Raj chooses to believe) this bhaiyya was quite upset that some upstart school rebuffed his favorite city.

A decade later, having abandoned the mayanagri myself, I realise that this incident, perhaps, marked the turning point of a deeper malaise affecting India's crown jewel. The Indian growth story has bypassed Bombay, leaving it a mere shadow of its glory days--- much like those dilapidated beautiful bungalows that dot Bandra, silently recounting an era of opulence and prestige, now lost among the skyscrapers of Powai.

Found this article from the Indian Express, dated September 10 1998.

You may be forgiven for mistaking it as production notes from Sarkar Raj. I was more shocked at how latter half of the article could be from a 2008 newspaper, despite the change in government! Maharashtra's Nero continues to dog the hardworking "manoos" with distracting, unproductive dogma, while the means of production continue to dodge the state. Ten years later, more and more industries, entrepreneurs, schools and talent are being driven out of Bombay. New enterprises prefer to avoid a sleepy CM and the rebel without a cause, choosing to open shop in Gurgaon and Trivandrum instead.

The electorate may have judged Chandrababu Naidu harshly, but history is sure to be kinder to that man of vision. On the other hand, the curse of rhetoric replacing honest labour did not die with the sequel to Sarkar. Ironically, fiddling by modern day Neros may be responsible for India's most prosperous state turning into one they dread the most-- Bihar.


Now for the article itself, that provoked this post:

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Indian Express, dated Sep 10, 1998

Andhra Pradesh Chief Minister Chandrababu Naidu is getting all the prizes and it is not going down well in Maharashtra. Few things have brought home so acutely the fierce competition between states than the bidding for the Indian School of Business, India's answer to Wharton. It's not investment rupees or jobs created that counts here but the prestige of playing host to what is intended to be a world class institution.

Mumbai has been passed over and the school, promoted by a glittering array of big corporates, has gone to Hyderabad. Apparently incentives were not the paramount determinants of the choice of location. When Anil Ambani speaks of the ``vision and organisation'' of the Andhra Pradesh government and Anand Mahindra of the ``triumph of political wisdom over political expediency'', they are emphasising other important factors which influence business decisions. Politicians could pay closer attention to what young business leaders are saying.

For Maharashtra Chief Minister Manohar Joshi the unkindest cut of all came from Bal Thackeray who said Chandrababu Naidu ``moves like a typhoon''. Unkind because Thackeray's attempt to commandeer places in the school for Maharashtri-ans is what probably queered the pitch for Mumbai, the promoters' first choice when they put their ideas to Joshi and Thackeray on May 5. In that case the message in the rejection of Mumbai is that India's Wharton will take the best and the brightest and not politicians' candidates. It is a good advertisement for the school. The loss of the business school is symptomatic of a larger problem in Maharashtra today.

Shiv Sena and BJP politicians lacked experience to start with and have not grown into their jobs in government. They remain in many ways the parish pump politicians they always were. Apart from the Chief Minister himself there is little evidence of administrative abilities and even Joshi is hamstrung by his party boss. When the coalition came to power, Maharashtra was already being challenged by other states for new investment and projects and beginning to lose its position as destination number one.

The Enron affair exposed the amateurishness of the SS-BJP coalition and ought to have taught the new government some valuable lessons. Unfortunately, there has been little sign that the government is wiser for that experience. Politics and self-aggrandisement continue to come before pragmatism and common sense. Consequently, although Maharashtra's physical and human resources still make it a major business destination, many of the statistics show investment is not growing as rapidly as it is in other go-getting states. Gujarat, Tamil Nadu and Andhra Pradesh are pushing ahead faster on a wide front, Punjab, Haryana, Madhya Pradesh and perhaps even Uttar Pradesh in some areas. To Thackeray and Joshi these trends are mere grist for the political mill as they engage in a new quarrel about whether Maharashtra is first or fourth in the league. The fact that the government is thrashing about for ways of arresting the downslide in the state's finances is proof of Maharashtra's worsening condition.