While Maruti was created to manufacture a 100,000 cars a year, nobody ever believed that would happen. There was no national policy. There was no national goal that we have to make cars available to the common people or that the car industry in India should grow or that it should become one of the major industrial activities here that it should export cars. No question of all of that. What do you think was uh how Maruti came into being? What was its purpose? Was it only the Maruti the company or there was a national agenda on this?
The only thing we had in our mind was we were required to produce a car before the end of 1983. It was to be a Maruti car because Sanjay's company was called Maruti. That had to be done. There was no other agenda at that time. With time and experience, people can make improvement. Nobody's better than us. It's real arrogance. What you study in the university is meaningless. Don't use it one bit in your later life. Most of us. True. It's the attitudes which you have developed which I talked about the inquisitive Greek spirit, the integrity, but particularly ESOPS. ESOPs and large amount of ESOPs are top management. Mr. Musk has an Esau. He'll get a trillion dollars if the market cap exceeds a certain figure.
Why? So why we still follow the American way rather than what we have learned from the East?
You know our socioeconomic conditions in India are very different. Indian environment social economic politics they're not working in a vac. They're not working in the west. They're working in India. what environment you are working in that's very important in this environment it is thing actually is true in most environments integrity ethical conduct has no substitute has to be there
morning bhagavan morning
uh this is the 10th episode of uh quality renaissance in India since 1980s. So this history we started to record at the request of many people and Dr. V. Krishnamorti was the first one telling me 15 years ago because if you don't record it all that you've done or what has happened in India not many people know about it since you've been involved it's better to write a book. So I had no inclination to write a book. Then professor Kou, professor and everybody kept telling me. So then my son once told me look what's the point writing a book nobody reads it these days. [laughter] So he said if you can share your experiences in short episodes 1 minute 2 minute and post it on LinkedIn probably more people will read it. So while I started doing it as I'm sharing my experience and what I have experienced to others as a second hand. So the best thing is to listen to the people who actually shaped and influenced the history of quality movement in India over the last 40 years 45 years. So in that context then I decided let's do a podcast with people and listen from their perspective what happened then it'll be a much wider you know approach which people could listen to and learn from historically what happened in India and how can we use that learning for the future. So that's the context in which I started these podcasts. So this is the 10th episode. Okay.
And obviously when we do talk about quality anywhere in the country, first thing that comes to mind is the initial stages of liberalization that started in early 80s. I think when Rajiv Gandhi was our first tentative steps though the major things came in early 90s and Maruti's advent at about the same time. So when we talk about quality movement, Maruti invariably comes out as a first initiator of such movement in India and influence the way India looks as quality since then in a liberalized economy. So in that context I was very keen to record from those who have actually participated in this uh movement and since you were involved right from the beginning and involved for so many years now it's virtually 45 years so I thought it would be very useful for people in India to learn from you in first person how you shaped inadvertently planned manner or whatever it is sometimes Start with one thing in mind, we end up with doing something else as we go along. We modify and improve and how you personally and through Maruti as a vehicle influence the quality movement in India. That's the intent. Okay.
So let me introduce uh Mr. Bhagav to the audience who going to be listening to this. Journey is unusual. He started as a uh is officer. He topped in early 50s. Joined the Indian administrative service having done an excellent work there. Then he moved to [clears throat] Marauti which was coming up as a public sector and shaped the Maruti's way of doing things. So you would like to listen from him the early years of how he studied he was influenced then in the administrative services and subsequently in Maruti and its renaissance over a period of 45 years making it as one of the bestrun companies in India which in a way influenced so many organization in India in their movement towards quality. Welcome Miss Bhaga. Thank you.
We look forward to your uh listening to you and having a conversation with you and I hope people listening to this podcast will be influenced, inspired and [clears throat] help the country to move forward.
Thank you very much Janak. So you would like to start with your early years and uh school, college and then first work.
I grew up in Dehradun. My father was a paper and cellulose technologist who headed a division at the Forest Research Institute. We had a comfortable but frugal life. He invested everything in our education. I went to the Doon School from 1945 to 1950, where I learned values like the inquisitive Greek spirit, punctuality, discipline, and social service. I was young for my age and passed intermediate before 16. I couldn't get into St. Stephen's due to an age limit, so I went to Allahabad University, studied BSc with physics, chemistry, mathematics, topped the university, then did an MSc in mathematics. In those days, the primary objective was to get a job. I prepared for the civil services, spent a year studying history and another doing MA English, then passed the exam and joined the IAS. My early postings were in the secretariat. I was selected to study development economics at Williams College in the US, which broadened my horizons. After returning, I had various postings, including a stint in Kashmir as Agricultural Production Commissioner, which was a huge learning experience. Then I came to Delhi, worked in the Home Ministry, then as special assistant to the Minister for Water and Power, then Joint Secretary in the Ministry of Power. I was involved in creating NTPC, NHPC, and super thermal power stations. During the emergency, I worked in the cabinet secretariat, where I saw how difficult it was to make changes in government due to the need for consensus among ministries. After five years in Delhi, I wanted to go back to normal work. Dr. Krishnamurti, who had been asking me to join BHEL, finally convinced me. I joined BHEL as Commercial Director for two years. After that, the post was abolished, and I was at a loose end. Just then, Maruti was created, and Krishnamurti became its MD. He asked me to join him. I didn't know much about Maruti but agreed. After a year, the government said my deputation was over and I had to choose between returning to IAS or staying in Maruti. Most friends advised me to return, but I considered that this was Mrs. Gandhi's project and I didn't want to leave it. Also, I thought about my long-term career and family. I decided to take the risk, retire from IAS, and get absorbed in Maruti. It turned out to be an excellent decision.
so in hindsight would do you think that was a good decision or how do you see that
well obviously it's turned out to be an excellent decision it couldn't have been better I think I did the things the right way and um I believe that there's a god somewhere who guides you in all these things and uh I was guided to take what would be the best decisions uh in my interest and my family's interest. I think your inner voice prevailed over the advice you got from everybody else. See, people couldn't believe why I would not want to become the cabinet secretary and have all the prestige and power of heading the civil service of India. Why would I give up the opportunity of at least becoming a secretary to government? Because there's a lot of status and prestige attached to these. But in my case, I had never attached too much uh importance to status and prestige and all that because uh very early in my life I had seen that um all the difference and respect which was paid to senior officers was only to the chair which that person was occupying. It's not to the person. Sure. And this is all very transient. The moment you left the chair, the guys who thought you were the best thing which ever happened to the world suddenly forgot about you. So I was not much enamored of all the status and stuff. I know it was not lasting. I I always had a tendency to look beyond the present and look at the future.
I think let's move to your next chapter in your life. Uh when you [clears throat] you're already working with Marauti, what do you think was uh how Maruti came into being? What was its purpose? Was it only the Maruti as a company or there was a national agenda on this and manufacturing? What you had in mind when you [clears throat] were working with Maruti in the early years?
You know the background of how Maruti was created. If Sanjay Gandhi had uh lived, he would have continued with the small car project because unfortunately he did not live. Mrs. Gandhi wanted that his dream project should continue against all the policies of the government. A public sector company was formed to manufacture private passenger cars. I mean it was as contrary to policy as one could get. The general attitude and policies of government regarding passenger cars did not change. Cars were still considered to be send products. They were still very heavily taxed. There's no priority to cause anywhere except in the case of Maruti. There's always somebody to listen to us because people also knew others also knew in government that this was Mrs. Gandhi's project and uh that is why Maruti was created to manufacture a 100,000 cars a year. Nobody ever believed that would happen. There was no national policy. There was no national goal that we have to make cars available to the common people or that the car industry in India should grow or that it should become one of the major industrial activities here that it should export cars. No question of all of that. The only thing we had in our mind was that we were required to produce a car before the end of 1983. It was to be a Maruti car because Sanjay's company was called Maruti. That had to be done. There was no other agenda at that time. So all what we are saying Jan was just not there. We were all just focused how to get this done in the very short period of time which is real. That's it.
So how this evolution happened over a period of time?
Even before the company was formed, the government had selected Renault to make a big 1800 cc car. When we came in 1981, we studied and found that car would be too expensive and unprofitable. We thought a small car was needed, which fit with Sanjay's idea of a people's car. We looked for a Japanese partner because they made the best cars. After some efforts, we ended up with Suzuki, a small company with ambitions. Suzuki was keen for the project to succeed. Mr. Suzuki told us that if we listened to him, he would help us achieve the same quality as in Japan. Mr. Krishnamurti agreed. So we learned from Suzuki the basic principles: how to get the highest quality at the lowest cost. Key learnings included total teamwork, not having divisions between workers and management. In Indian industry, there was often conflict. Suzuki emphasized that quality cannot be achieved by inspection alone; it comes from people understanding its importance and being part of a team. We also learned to follow processes and systems, and to involve vendors as partners. We set up a vendor development system, treating vendors as partners, helping them with technology, management, and even financial aid. We paid them in 15 days, which was unprecedented. This created loyalty and ensured quality. We also learned about continuous improvement (kaizen), where everyone is encouraged to innovate and mistakes are tolerated as long as they are genuine attempts to improve. We implemented punctuality with time clocks for everyone, including the MD. We eliminated leave reserves and ensured 95% attendance. We did preventive maintenance to avoid breakdowns. All these practices helped us achieve high quality and low cost.
If I may supplement what you just stated [clears throat] because I worked in industry from 1963 till 1985 [clears throat] when Maroti started. You're absolutely right. Uh in an environment of shortages where is the need for quality because whatever you produce of whatever quality sells because there's a shortage. Sure. For example, Baj scooter is a waiting list of eight or 10 years. And I recall Mr. Rahul Bajaj once produced 100 maybe some 10,000 more cars than the last capacity. He was called by MRTPC. How dare you produce 10,000 more cars and [snorts] he said I learned I'm satisfying my customers. He said how dare you satisfy your customers. [laughter] It is against the law of this nature. He says I have not even invested more. I've improved efficiency. How can you improve efficiency and produce more? It's against the law of this country. So in that environment, no wonder there was a labor and management conflict. Each one wanted their pound of flesh. And what you also mentioned is very interesting. It's not only in India. Uh quality by inspection was the world standard till the Japanese changed it in early 60s. Everybody followed inspection. So acceptable quality level meant inspection. So that's the change from quality control to quality assurance. The Japanese did and fortunately not only you chose to have a Japanese partner, you're willing to listen as you rightly said another leadership team in the same environment may not have listened. So it's to the credit of the leadership of Maroti they selected the right partner and were willing to listen instead of dictating to them. I had and what also you mentioned not only division of management and layers division within departments they worked each department was a silo in itself
right and that also is something similar to what you mentioned about cabinet secretariat each ministry was a silo trying to optimize their operations correct that still continues in government [laughter] there is no national what you say policy which overrides everybody else somebody there to enforce national policy and uh the automobile sector is the best example of this you know the car policies we have the ministry of heavy industry which is the primary ministry for cars but the ministry of transport surface transport and roads has a huge amount to do with it because all the regulations relating to safety are done by them and that affects cost and everything. Environment ministry is concerned with pollution. The ministry of power is concerned with the cafe standards. The ministry of petroleum is concerned with the fuel policies relating to cars. Of course, the finance ministry is concerned with the taxes on cars. So, but all of this affects the growth of the car industry. Which way does it go? What happens to the car industry? Who is the single point in government who will decide that this is what we want? There is a thing.
So, this industry more than anything else falls between a number of stools
and then the tax structure
everything. I mean I'm saying there's so many [laughter] different ministries involved who to coordinate you can't go to the cabinet every time and if three ministries are differing the cabinet will tell you to go back and sort it out amongst yourselves.
Excellent. Thank you for sharing this experience. Very useful. So
From the Japanese we learned about cost and quality. The first thing Mr. Suzuki did was look at our manpower plan and question the leave reserve. He said he wanted 95% attendance and that people should actually work for 8 hours. He sent us time clocks from Japan, and everyone from MD down had to punch in. We also learned about preventive maintenance, avoiding breakdowns, and streamlining tool replacement. Suzuki would point out different ways to reduce cost every time he came. For example, we had a program to reduce one gram of weight from every component. These minute things made a big difference.
I even remember once when I was in Japan uh [clears throat] when they were doing very Well and the Japanese yen started strengning now they're already leading the world in automotive industry. How do we prepare for the future when we already the leaders so when Japanese yen was 100 y to a dollar they started keeping parallel accounts Japanese yen at 80 y to a dollar. So putting a pressure on them to reduce cost while maintaining the quality and what you said every gram matters. I think in that context I had recollect Mr. Rahul Bajad you always managed cost in decimals of a pesa not a pesa so even decimal of a pesa makes a difference and that's how Bajage automotive has excellent track record of quality also in terms of cost in spite of shortages in the market they never exploited it they maintain the cost very well so I think same philosophy has worked well
Another difference from Indian industry is the Japanese philosophy of continuous improvement, kaizen. In government and BHEL, we never talked about improvements; if something was established, it continued forever. But the Japanese believe everything can always be improved. Continuous improvement requires people to be innovative and try new things, and mistakes are tolerated as long as they are genuine. We had to create a culture where people are not afraid to make mistakes. We also learned that the people implementing the process are the ones who can improve it, so worker involvement is crucial. Quality circles only succeed if the group has a stake in the improvement. Maruti introduced a collective bonus based on the number of saleable cars produced, not individual incentives, which fosters teamwork.
actually another thing which I have noticed working in Indian industry and even today consulting with large number of industries very often people think process process orientation means the result or the effect is not achieved. So we'd rather focus on effect rather than the process and most organization the very senior leadership team believes standardization is equal to bureaucratization which will impact the result but if there's a good quality the result will always be good. Sure. So that transition has not yet happened in most of the companies in India. We still believe that standardization is equal to bureaucratization and hence makes so simple because we don't accept that if you put a process you should also keep looking to improve the process. We think if you put a process it's there forever. If that becomes so then I think the thinking that this is bureaucratization is valid. But if you put in a process and then look to how to improve the process so that leads to better productivity and better quality that's the right way to do it. So I recall you know invited professor Ishikawa to come to India in 1986 April first TC conference in India. So I had a fortunate good time uh fortunately I could spend two days with him besides the conference. So I asked him how frequently a procedure should be changed because I worked in mostly western companies in India. So he said you know if a process hasn't improved or hasn't changed for 6 months it's a sure sign of decay of an organization. And here we always thought our purchasing procedure is robust for 20 years it's operating like this and we thought that is robust and here this guy is saying he says 6 months is a long time for people to find a better way.
And that's what you're trying to say look how do we continue and it cannot be done by industrial engineers and quality engineers. That's even the people who run the process they improve.
