Size Does Matter

For small or mid-sized companies in India, especially manufacturers, it’s impossible to avoid government interference. Whether it’s the town and country department, or the electricity board, or the state industry ministry, or the central ministry which is in charge, everyone will demand some sort of cut or speed money or the other. It is a chronic pain in the corporate arse.

On the other hand, as Sainath keeps pointing out, if you’re a huge company like Reliance, then the government bends over backwards to please you for fear that you won’t invest and generate employment. It gives you free land, builds a road to your factory or airport, gives you excise holidays and suchlike.

The implication is that at some specific turnover between 100 crore rupees and 5000 crore rupees, the government stops harassing you and you start harassing the government. The exact figure is something that needs to be researched, but for obvious reasons, I think it should be called the Yakov Smirnoff turnover.

One Response to “Size Does Matter”

  1. Kiran Says:

    It’s something on the lines of (I read this somewhere) – If you owe the Bank Rs. 10000, you should fear the Bank. If you owe the Bank Rs. 1000 cr, the Bank should fear you.

    On your blogpost, two points –

    1) You can’t become big unless you were small at some point of time. So, Reliance and other big companies have indeed become experts at handling govt. harassment.

    2) The big companies have perfected the art of greasing palms. There is no such thing as free lunch. Unfortunately, in emerging economies, it’s a necessary evil for smaller companies.


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