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‘Make millionaires more than just cash-rich’
Earlier this month, the private sector IDFC Bank and Shriram group’s holding firm Shriram Capital agreed to explore a merger that will create one of the country’s largest retail banks, which could be valued at over Rs 65,000 crore.
The brain behind this mega deal, Ajay Piramal, Chairman - Piramal Group and Shriram Group, who was in the city, spoke about the role of Indians in the global workforce and protectionism at large.
At the sidelines of the Great Lakes Institute of Management’s annual convocation, the business mogul spoke about how the new world economy, especially in the Indian context is seeing agricultural and manufacturing jobs disappear, while service sector jobs are on the rise, with 60 per cent of the workforce employed in the sector. Excerpts from an interview:
Increase focus on the service sector
Manufacturing jobs are certainly disappearing. There are lots of opportunities coming into the service sector. Today, the segment accounts for close to 60 per cent of the GDP, while manufacturing and agriculture are taking a backseat. How do you get more and more people into this sector? Changes are on the horizon, thanks to technological leaps. Take the idea of driverless cars. In the US, it poses a threat, given that the largest number of workers are employed as truck drivers. On the other hand, this tech will take a long time to come to India. Today, if you spend Rs 5,000 cr to set up a steel plant, how many jobs can you possibly create? As a nation that is capital starved, it pays to focus on services, which offer the maximum return on investment.
Note ban, GST and pain points
Demonetisation and GST are not the factors affecting employment. People need to pay taxes. Do you know why traders were organising strikes when indirect taxes (of a marginal 1 or 2 per cent) were introduced for gold jewellery and textiles? Traders didn’t want their books to get accounted for. They were unwilling to come into the tax net. You also cannot have a society where some people never pay taxes. Look at the frugal number of people in India who even pay direct taxes.
Protectionism in Trump’s time
I believe that the number of Indians working abroad in the future will increase. If you see globally, Indians are respected for their contribution to various economies in different levels. I see experts coming from India, that will be employed internationally. Even a country like the US would not be where it is today, if it wasn’t for its immigrant population. It’s the strength of immigration and you see it happening in the developed world in countries in Europe. Also, society is aging in the developed countries. How do you make progress in the absence of young workers? To some extent, thanks to the peaceful demeanour of Indians, their cultured background and high qualifications, they have been able to make a mark globally. This is unlike the immigrants that the US has been receiving from other countries where they have issues of another kind.
Driving social responsibility
We focus on this NGO called Pratham which I chair. We develop skills among workers, and we have associated programmes for farmers and workers based in small towns. It’s a challenge to provide relevant employment to millions of young citizens. Under our Gandhi Piramal Scholarship, we take graduates and post graduates and they work with us to improve the standard of education in government schools. After they finish the two-year fellowship, they are guided to become millionaires, but of a different kind. Their objective – touch a million lives – through their social initiatives. We are working in eight states and over six lakh children benefit from the initiative every day.
Meet the tycoon
Ajay Piramal heads the diversified Piramal Group, a conglomerate present across 100 cities.
Under his command, the Group evolved from a textile centric business to a $7.5 bn company with interests across pharmaceuticals, packaging, financial services and real estate.
In 2014, Piramal spent Rs 2,014 crore to buy a 20 pc stake in Shriram Capital Ltd, an arm of the Chennai-based Shriram Group.
This was in addition to a Rs 1,636 crore investment in Shriram Transport Finance Co Ltd, for a 9.9 pc stake.
Piramal was also appointed to the Board of Tata Sons, as a Non-Executive Director.
In 2017, Forbes, estimated Ajay Piramal’s net worth to be $5.6 billion