India is a country of dynasties. They dominate politics at all levels. They are present in many top companies, and they even pervade Bollywood – and they are constantly in the news.
Within the past few days, Rahul Gandhi, heir apparent to the leadership of the powerful Nehru-Gandhi dynasty that runs the Congress Party, has suffered a serious personal setback in Uttar Pradesh (UP) assembly elections where Congress did badly.
A bitter dynastic row among politicians in the southern state of Tamil Nadu has led to the sudden resignation of Dyanidhi Maran, the country’s able communications minister.
Arguments in Bajaj, one of the best known business families, are leading to a split that is now being finalized by Rahul Bajaj, the family head. And only last month the media was swamped by the wedding of Abhishek Bachchan – film star son of one of India’s most famous stars – to Aishwarya Rai, a female film star.
The ups and downs of dynasties are not just the stuff of gossip and news headlines. They are so pervasive that they affect how India and business are run, and by whom – much more so than say in America, despite the presence there of political and business families like the Kennedys, Bushes, Fords and Rupert Murdoch.
Whether this is a good thing for India is highly questionable. Certainly political dynasties provide continuity and recognizable names and faces for the uneducated to support. Sometimes successful leaders emerge. Sonia Gandhi, current head of the Congress, has saved her party from political disaster and possible splits, and brought it back to power at the head of the current coalition government. But, more often, family members enter politics to protect (often illicitly) wealth accumulated by their fathers and other relations and to sustain the gravy train.
In companies, strong leaders also sometimes emerge. Ratan Tata has successfully built up Tata, one of the country’s two largest groups. Both Kumar Mangalam Birla and his late father, Aditya Birla, have done similarly with their businesses, and there are also successes in the younger generations of families such as Bajaj, Mahindra and Thapar.
But there are many failures as well – as has been demonstrated by the gradual decline of several other parts of the Birla family’s empire, which was once a dominant force. The business fortunes of other old families have also faded since the early 1990s when economic liberalization made them compete or decline.
Life in dynasties is never simple – human greed and ambition make sure of that. Maran had done a good job running the government’s telecommunications ministry but has become caught up in jealousies over dynastic political succession. He got the government job because Muthuvel Karunanidhi, Tamil Nadu chief minister and his grand uncle, nominated him following the death four years ago of his father, Murasoli Maran, who was industry minister.
But last week a Maran-owned tv station published an opinion survey suggesting that Karunanidhi’s younger son was ahead of an elder brother in political succession stakes. Infuriated, the elder brother organized a violent attack on the tv station’s offices, where three people were killed. These events deepened a family rift and Karunanidhi, whose DMK party is part of the Congress-led coalition government, forced Maran to resign.
The Bajaj story basically it comes down to what happens in many business families after two or three generations, when younger family members want to enjoy and run their own slices of the wealth.
Sometimes such splits are managed relatively quietly and well. The Birlas have been gradually separating their massive empire since the early 1980s with little publicity, but the Ambani-controlled Reliance group split in a very public second generation row two years ago. Now Rahul Bajaj is trying to resolve his sons’ and cousins’ ambitions without too much public rancor.
So yes, dynasties do rule, and it sometimes is ok. But they are often protected from some of the impact of market forces, both political and business, so are unduly resistant to change. They block the emergence of new leaders in political parties, and they demotivate top executives who have little chance of reaching the top.
It is for example inconceivable that anyone but a Birla (with one exception, now in the courts) or a Bajaj would head those families’ empires. The only notable exception is Ratan Tata who is believed to be considering whether it would be best if a non-family member succeeds him in a few years’ time.
It is also inconceivable that the Congress Party will for years to come have any leader other than a member of the Nehru-Gandhi dynasty, which has been in charge for most of the past 60 years. And Rahul Gandhi, Sonia Gandhi’s 36 year old son, will not lose his heir-apparent status because of his party’s drubbing in the UP elections, even though he led and dominated the Congress campaign.
Such dynastic longevity is of course good for the families involved, and for those who cluster sycophantly around them. But dynasties stymie development and, when they are as pervasive as they are in India, their impact overall is more negative than positive.