Steelman and former Chairman of the Steel Authority of India Limited (SAIL), SK Roongta explains his insights on Nation Building through Revival of Demand, Economy & Institution building.
Originally published 23rd July, 2021
A venerated veteran with time-tested experience in the public sector, SK Roongta, former SAIL Chairman, currently the Non-Executive Chairman of Bharat Aluminium Company Limited (BALCO) and Talwandi Sabo Power Limited (TSPL), explains his predictions and inputs on economic acceleration and nation building through institutional strengthening. Roongta who is also a fellow of All India Management Association (AIMA), spoke at the second episode of the BW Nation Builders series with Editor-in-chief Annurag Batra regarding broader leadership lessons and the way forward towards economic revival.
Effects Of The Pandemic
Building on the pandemic experience of change in operations, Roongta explains how broad room engagements have gotten livelier and the virtual medium has helped connect with trade bodies, industry associations. He remarks that the pandemic introduced more discipline into daily life, prompting changes in dietary habits, fostering connections with friends and family. He remarks, “And above all, I have been able to shut my fear of technology in my day-to-day operations.”
Building a good institution also calls upon consistent leadership traits. Roongta explains that a good leader would not display duality and earn the trust of their teammates. “The leader should have vision and passion to build a strong culture in the environment for realising the potential of the team. The right people in the right place adds to empowerment and enablement,” he explains.
He further probes, “Great organizations are built by the people and it is easier said than done. The question is, how do we really convert this in the real sense?” He explains that it is very important to make a professional assessment of one’s team and then put the right people in the right place so that every person is afforded a conducive environment and opportunity to exercise their potential. He believes a leader must shoulder the responsibility of locating people in the right places so that organisation’s goals are aligned with people’s aspirations and growth plans. Notably as a testament to his leadership prowess, during his tenure as the Chairman of Steel Authority of India Limited (SAIL) from August 2006 to May 2010, the ranking of SAIL among World Class Steel Makers moved up to the second position from the seventeenth position, as per World Steel Dynamics, USA.
Lessons on Nation Building
Institutions are an integral part of any nation’s progress. From government institutions, private sector, social institutes, NGOs and even private individuals, we have many types of institutions, thus establishing a very strong link between institutions and nation building. Roongta adds, “Infrastructure becomes important for Nation building. We need the steel. We need cement, we need so many other inputs for our infrastructure which need efficient institutions to provide that. We used to pride ourselves at SAIL, remarking that there is a little bit of SAIL in everybody’s life. We felt we were not producing steel but touching the lives of every Indian. So institutions are an integral part of the nation and only good institutions can really take forward the nation building process.”
Efficient project management that avoids the time and cost overruns can also play an important role in bringing growth back. Recollecting incidents from his time at SAIL, he adds that he was merely a catalyst who encouraged employees to be a techno-commercial while and the larger team effort and dynamics composed the strength of the success.
Economic acceleration and the Steel economy
Roongta adds that the Steel economy mirrors the Indian economy to an extent. Falling under the manufacturing sector, the steel economy is dependent on the investment focus in the country. With greater infrastructure investment and focus, the steel economy also rises much beyond GDP growth and vice-versa. Quoting the example of China, where the steel industry has grown much beyond their GDP growth indicates investment in their infrastructure.
In terms of economic acceleration, he adds that while the government is making many forward-facing policy decisions, the lacuna remains between what we pronounce and what we can execute. “I would say that instead of making more and more pronouncements, it is important for policymakers and us as a nation to focus on what we can execute and set targets accordingly. The government has done well in the current year and has set a target of more than 5.5 lakh crores for investment, which is I think about 30 to 35 per cent more than the last year. Now that we have the investment in place, we need to ensure that it doesn’t just remain on paper as such investments are big multipliers and investment in infrastructure will touch a lot of other areas and ancillary industries”
He also believes housing, and construction could also expand the economic activity. He notes that right now the climate for export is very conducive and if home-grown companies can stick to quality and commitments then Indian exports would reach across the globe to buyers who want to diversify their sources of supply. Exports can also change MSMEs and Roongta believes that we need sectoral intervention for MSMEs to heal. Gems and Jewellery and Agri-exports (considering the current stock of grain) are also viable export opportunities.
Roongta adds that the government could additionally ensure efficient project management and infrastructure investment into railroads, ports, road networks, etc. to keep up with the bustle of activity once the economy takes off so that shortages could be avoided with foresight. His observations come from his experience heading a panel of experts on the Reforms in the Central PSEs, constituted by the Planning Commission. Roongta has also been a Member of the Committee formed by the Ministry of Corporate Affairs, to formulate Policy Document on Corporate Governance. He is also associated with apex Chambers of Commerce, being a member of the National Executive Committee of Federation of Indian Chambers of Commerce and Industry (FICCI) among other distinctions.
Looking ahead at what seems like a definitive growth momentum for the country, Roongta remarks, “I am optimistic that 24 months from now, we will be firmly on the growth trajectory. Easily with 6-7 % annualised growth. That is my assessment.”
Banking on the various predictions in the immediate time, Roongta is optimistic that the business activity and economic growth will grow and growth in exports will be something to watch out for. He assesses that for the first time in this quarter, exports are 40 per cent higher compared to FY 19 and 20, indicating a higher base of comparison while we still have nine months to go in the current financial year.
He senses that as demand rises so will profitability and balance sheets leading to further investments. While demand remains a concern at the moment, he believes that once we leave corona behind, a domestic growth explosion will follow chiefly in areas like domestic tourism which will further set off a multiplier effect for economic activity.