“I have always looked for ideas that are tough, relevant for the society and can make a name for India” — Dr AV Rama Rao

Dr AV Rama Rao is the pioneer of outsourced medical research as a business venture in India

If outsourced research is the buzzword, Dr AV Rama Rao ought to be its icon. He runs India’s only scientific research lab as a business venture. His company Avra Laboratories provides technical services, process technologies and synthesis of new chemical entities for the world’s leading drug companies like GD Searle, Pfizer and Bristol-Myers Squibb. From extremely humble origins in rural Andhra Pradesh, Dr Rama Rao became an innovative scientist with the National Chemical Laboratory in Pune and later turned the Indian Institute of Chemical Technology into a centre of excellence. His outstanding research work has led to 30 patents, 50 drug technologies for the industry and 109 PhDs. While his outspoken and straightforward nature has upset a few mediocre people, Dr Rama Rao has had a long friendship with Dr YK Hamied of Cipla, while synthesising the anti-AIDS drug that fetched global fame for Cipla and Dr Hamied

ML: Can you tell us a little about your background and your childhood?

I have seen your other interviews where everybody seems to be a topper. Let me be very frank. I was never a topper in school. My father was a state government employee who got transferred frequently. I was the first child and used to move around with my parents. Usually, by the time I finished half a year, my father was transferred and I often didn’t go to school in the second half at all. I was happy spending most of my time playing. Then, I scraped through the sixth standard and got into the high school.

Since my father used to get transferred frequently, I often stayed with my grandparents at Guntur. But when I was in my fourth standard, I had a friend who played cards. Now, in Andhra Pradesh, everybody has three ‘virtues’ -- playing cards, drinking and womanising. We used to bunk school in the afternoon and play cards behind a temple. I somehow got through the exams because I had a terrific memory.

ML: When did you get serious about studies?

The year I was supposed to appear for my SSC, I realised what I was doing. By then, I was sent to live with my aunt who was very poor. My father used to send Rs40 every month for my upkeep and they managed the house with that money. It made me realise, for the first time, that if I did not have proper education, I have had it. We used to have just one meal and leftovers in the evening.  

ML: How did this realisation change you?

I used to dominate everything that I did. I was not a great football player, but I was the team leader. I also realised, for the first time during my SSC exams, that scoring marks is not difficult and I topped my school. At that time, my father used to say that he would get me a clerk’s job when I pass my SSC.

Because I didn’t study regularly, I had become weak in mathematics and I opted for biology, physics and chemistry at the intermediate level but didn’t know that students with biology went on to do medicine. I casually applied to a medical college in Guntur where only 13 of the 50 seats were for merit students. I ranked 14th or 15th. My father could not afford to send me outside Guntur. So, although Vishakapatnam (medical college) had more seats, I could not go. I didn’t feel bad. I had, by then, started liking chemistry, so I joined AC College in Guntur for my BSc. Getting a first class was a big thing those days and I was a topper. I was also the college student leader. Our principal believed that student leaders are rogues and don’t study. So whenever he got complaints from the faculty, he always called for my marks. I used to get away with a warning, since I was a topper. One had to go out of the state for a Master’s degree those days and most people went to the Benaras Hindu University. Since we were nine siblings, there was no money for me to go. My father had asked me to apply for the post of a clerk and I got the job, but I was reluctant to join.

ML: What did you want to do?

I wanted to study more. But I knew the family situation, so I decided to join AC College as a chemistry demonstrator for one or two years. Those days, post-graduates applied for the demonstrator’s job, but sometimes they took graduates too. The evening before the interview, I went to meet the Head of the Department (HOD) hoping he would put in a good word for me. He did the opposite. He said, “You are a student leader and don’t deserve to be a teacher”. Anyway, I got the job. A year later, I was selected as a chemist in the Agricultural College at Bapatla. It is there that I realised that a BSc was not enough and told my father that I wanted to study further. I saw an advertisement of the University Department of Chemical Technology, Bombay. I applied and got through. I landed in Bombay on a rainy day like Sharma (Prof MM Sharma, see interview in MoneyLIFE 7th December issue). I didn’t know the city and someone on the train asked me to get off at Dadar. I took a taxi, which took me to VJTI and dumped me there. I then walked in the rain to the hostel. That is how I started.

I wanted to do pure chemistry and not engineering. Those days, Prof K Venkataraman was the best in organic chemistry. He was at the National Chemical Laboratories (NCL), Pune. I applied to do my PhD under him, even though many students took 8-10 years to complete their PhD with him. I was also getting job offers from companies like Glaxo and Pfizer. Nobody other than me went for research from my batch.

ML: Did you know Prof Venkataraman earlier?

No, I didn’t; but he was a former faculty member of UDCT and had a soft spot for UDCT students. For the first three months, when there was no fellowship, I had to plead with my father for support and he sent me Rs100 a month for expenses. I completed my PhD in a record time of three and a half years and Prof Venkataraman asked me to stay on for post-doctoral work. After a year, I wanted to leave NCL for further studies. He insisted that I stay back. I told him that he should at least give me a regular position. I became a ‘Scientist B’ at NCL in 1965. Until then, everyone was appointed to this post only on returning from abroad after higher studies. I was already married and had a child. A permanent government job seemed like a God-given gift. For the next 10 years, I was focused on chemistry of natural products and isolated 100 new compounds from plants and insects, which led to 70 publications in top international journals.

ML: During 1965-1975, you also worked closely with industry, shifting from your desire to do only fundamental research.

I had the notion that fundamental research was the pure thing and industrial research was mediocre. But NCL was changing at that time. Director Dr BD Tilak insisted that fundamental research had no relevance and the organic chemistry division had to find ways to serve industry. My first brush with industrial research was the case of Poona Synthetics in 1970. The owner, Maharaj Singh, was the son-in-law of LK Jha (then Reserve Bank Governor). Jha had requested Venkataraman to help the company solve a problem. But Venkataraman didn’t know anything about it so he asked me to help. The company was making OTS-amide, a key intermediate for saccharine, and in the process it threw away a by-product called PTS-amide. Saccharine prices went down and Poona Synthetics was making heavy losses. I felt that the only way to revive the company was to add value to PTS-amide by converting it into an intermediate called urethane, for an anti-diabetic drug. Hoechst India was a possible buyer. But Singh felt that Hoechst would never accept a local product. He was right.

ML: That was very surprising. Arrogance of MNCs?

Right. Hoechst simply threw out the managers of Poona Synthetics. I bought a ticket to Bombay on my own and went to Hoechst. I didn’t even have a business card and wrote ‘from NCL’ on a piece of paper. The Hoechst manager was also a former student of Venkataraman and called me in. He knew my name and agreed to give me only one trial. He gave us an order for Rs two lakh immediately. But the company had no money to execute it. So, I approached State Bank of India which asked me for a technical guarantee. The manager said: “I will give money only on your word”. I took an NCL letterhead, wrote that the product would work and signed it. Later, I came to know that we are not supposed to do such things. I used to do some daring things but only with good intentions.

ML: You were involved in supervising the production too.

: I had to design the plant needed to produce urethane and I was also spending Saturdays and Sundays supervising the product batches in the factory 20km away from Pune. Within one year, the company was out of the red. In fact, I found another application for PTS-amide -- fluorescent pigments which were being imported.

ML: After that, you got involved with the drug industry.

Around 1972, I was keen to start a programme on synthetic drugs. Indian patent laws had been changed to allow Indian versions of foreign drugs and pesticides. I selected the product diazepam but Regional Research Laboratory (RRL), Hyderabad, was already doing it for Ranbaxy. I told Dr Tilak that my approach would be different and it would work out much cheaper. But we had problems getting the raw materials, which were imported. In early 1972, I went to meet a trader in Bombay. He took me to Dr YK Hamied, then the director of R&D at Cipla. He was trying to set up a bulk drug unit. He enquired about my work and I explained my approach to synthesising a particular product. He wanted to buy the know-how. A few days later, he came to NCL and paid a one-time fee of Rs30,000 to buy the process. We were amazed. Later, we completed the synthesis of diazepam which was given to Centaur Chemicals.

ML: What was your next career move?

I felt the need to spend one or two years at one of the best organic labs. In 1975, I landed up at Harvard working with EJ Corey (a Nobel Laureate). Somebody had initially recommended my name to Har Gobind Khorana, who was at MIT. But Khorana was working more on biological chemistry rather than pure organic. So I opted for Harvard. After two years, I was very keen to come back because I was well established here and wanted to continue my fundamental and industrial research.

ML: What did you do after you returned from Harvard in 1977?

When I returned, I was very ambitious and wanted to work on tough molecules, especially relating to cancer. Dr Tilak told me: “Don’t think you alone have come from Harvard with an ambition. I too have worked with Dr Woodward at Harvard. Forget all your ambitions and goals and go back and work on natural products”. But I was adamant. He said: “In that case, you should get outside funds”. Then, I met Dr Hamied. He knew I had really good potential. He offered me a job. He said he would build an R&D lab in Bangalore. He gave a blank cheque to sign for my salary. I said: “No, I did not go to Harvard for nothing; I wanted to be in research”. He said: “I will give you 10 research fellows to work with you”. I said: “Once one enters the industry, research becomes secondary. For me, research is a primary commitment”. He suggested that I become a consultant. I have been a consultant to every major pharma company -- Ranbaxy, Cipla, Lupin -- at some or time or the other. But Dr Hamied was a regular. He used to sponsor all kinds of projects, so money was never a problem later.

ML: Around that time, you made a major breakthrough in cancer treatment.

While I was looking for outside sources of money, somebody told me very casually that the Maharashtra Government has a small grant in what they called a Science & Technology Cell and that they may provide funds for one of my projects. The head of the Cell was one Dr Malshe. Unknown to me at that time, he was suffering from cancer and was reading a lot on anti-cancer research and medicine. He wanted to work on anti-cancer medication and had probably read about my work on vinblastine and vincristine at the Corey group (at Harvard). In the 1960s, Eli Lilly came to India and did research on some Indian plants based on the ayurvedic system as part of the collaboration with NCL for plant extraction.

They had picked up this plant -- the Vinca rosea -- which is traditionally known to have medicinal properties. The plant grows anywhere. It doesn't need watering and strangely no animal touches the plant. Even plant virus doesn’t affect it. The reason, as we now know, is that it contains powerful alkaloids, which give out a pungent smell. Do you know that women do not offer this flower to God? Nobody knows why, but nobody plucks this flower, although it grows in the wild. The Malayalis make a decoction by boiling dried leaves in water and drink it. They believe it cures diabetes. On that basis, they were looking for an anti-diabetic medicine, but it was not responding in animal tests.

ML: How was it identified as a cure for cancer?

Vinca rosea affected the bone marrow and the white blood corpuscles reduced. That indicated that an anti-cancer drug was a possibility. So vinblastine and vincristine, the two dimeric alkaloids widely used as anti-cancer agents were isolated and even today are the only means of cure for leukaemia among children.
India was the only source of dried vinca leaves.

Traders were procuring it from tribals in Maharashtra and exporting them to Eli Lilly, USA. But people became greedy and started adulterating the leaves. When Eli Lilly realised this, it started cultivating the plant in the US
and Africa.

In response, the Ministry of Social Welfare began to buy leaves from the tribals to support them. When exports dried up, huge stocks had piled up. They then approached the Science & Technology Cell to see if anything could be done with the leaves. That is how Dr Malshe wanted to work with this plant. He wanted Pune or Bombay University to isolate vinblastine and vincristine, but neither of them came forward.

When I met him, I began to talk about the plant and gave him more and more details. He soon realised that I knew more about it than he did. He asked me “how do you know so much about this plant”? I told him I was working on anti-cancer drugs. I told him about wanting to isolate vinblastine and vincristine. He asked me how much money I would need. I said Rs two lakh. He sanctioned it in 24 hours. Since NCL had told me there was no money for fundamental research, I went to the Osmania University to look for research students. I started work in 1979 to process 10 to 20kg of Vinca rosea leaves to get a 0.001 extract of vinblastine. I got drums, bought a tap with my own money and welded it to the drum. I packed 30kg of leaves in the drum; I bought solvent and that is how the entire technology was developed, using a very simple process without chromatography.

ML: This is really a fascinating story.

: Yes. I informed Dr Malshe that we were able to get vinblastine. He was very excited and asked me about my other basic project for anthracyclines. I asked him if he would be willing to give money for that. His mandate was to fund state universities not central institutes, but he realised the importance of what we were doing. He said, “Dr Rama Rao, if you make vinblastine a success, then money is not a problem”. He later agreed to give us another Rs three lakh. His entire budget was Rs eight lakh and he had given more than half of it to us. I commercialised the vinblastine project and successfully completed the anthracycline programme.

ML: Why didn’t anybody else think about this procedure, a simple solvent extraction method?

There are 95 alkaloids in Vinca rosea of which you have to pick one. Scientists read the literature and make things complicated. They carry on with what was done before. Maybe today I will not be able to do what I did before. Those days, I didn’t have the right facilities. Pushed to a corner, you are determined to find a way out. Even on anthracycline, when I published papers, all the MNCs read my papers, because the methods were so simple. And I got invited by all the pharma companies to give lectures. All these projects were relevant to them.

I am one chemist who has probably lectured at all the pharma companies and made more money from my lectures than consultancy. I used to pay more income tax than my salary.

ML: Vinblastin was an astounding breakthrough that combined both fundamental and industrial research and surely made waves at that time?

In a coincidence, the very morning I gave the sample to Dr Malshe, he had met Chief Minister AR Antulay, who was under fire from the MLAs wanting the Science & Technology cell to be wound up. Antulay was supposed to reply in the Assembly. He asked Dr Malshe “Will you get any money from this research”? He said, “We will get royalty, but more than that, it is a product that will put India on the world map”.

Now, I had not discovered the drug. What I did was to discover a new technology to lower the price of making the key intermediate. But Antulay, being a politician, did not understand the difference and went ahead and announced that an Indian scientist had discovered an anti-cancer drug. It was reported on the front pages of all the newspapers the next day; but the text we had given him was accurate.

ML: What about the next steps -- establishing the efficacy and actual manufacturing of the drug?

Our process of isolating vinblastine and vincristine was superior to what Eli Lilly was doing. But who was going to exploit it in India? Hindustan Antibiotics was supposed to make the product. It insisted on using vials. The authorities wanted me to demonstrate the efficacy of the product. That is where Dr Hamied helped. He put me in touch with Tata Cancer Hospital. There was one Dr Shetty who was the chemotherapy head. I spent my own money visiting the Hospital. Hindustan Antibiotics had a machine which was unused. I cleaned it up and used it to make vials for tests. We used the drug on the Tata Hospital patients, along with the Eli Lilly products and Dr Shetty concluded that the results were identical to the Eli Lilly product. But HAL refused to make them. I went to Dr Hamied and asked him if he would manufacture the drug. He said, ‘No. Rama rao, you are a good scientist, but you have to learn business from me’.

I was surprised. I thought I had done something fantastic. He asked me what is the total sale of the drug in India? It was Rs25 lakh. He said, “My investment would be Rs two crore plus two years of interest which would then have amounted to Rs40 lakh”. It made no sense and I had no real answer for this.

ML: Was there an export possibility?

Those days, nobody thought about the world market. Cipla’s exports were only Rs1.5 crore. So I used to sit in the library, late into the night and wonder what is going wrong for this kind of innovation. Then, I suddenly discovered that the patent for the Eli Lilly product was due to expire in 1985. I called Dr Hamied the next morning and said, “It is a world market -- the patent is going to expire in 1985 and we are already in 1982.

We need two years to start production and you need regulatory permissions”. He said, “My God, Rama Rao, I didn’t realise this”. Cipla’s Bangalore facility was created. That was the beginning of exports by the Indian drug industry. That is how Cipla also moved very fast and I became well-known. Cipla signed the agreement for technology in 1983 and supplied the first 500 vials to three major cancer hospitals in December 1983. It sold each vial of vincristine sulphate at Rs25 compared to the imported price of Rs80.

Through the entire process I learnt not only technology and formulation but dealing with the doctors, clinical trials, dealing with FDA rules, good manufacturing practices (GMP) and exports. That’s why my own venture Avra Laboratories has the Vinca rosea (the Periwinkle flower) as its logo. The whole thing opened up my mind. Even today, no scientist knows all these aspects from fundamental research to commercialisation. You need extreme commitment to get solutions. Today, there are specialised people in industry to take care of different phases of the process; but at that time, there was no one.

ML: You worked on other projects with Cipla and Lupin. What was the next big piece of your work?

: Another area where I think I made some contribution to the country is in HIV/AIDS. I have a knack for identifying the right products -- it is a God-given gift -- through mundane sources. There is another aspect -- in science, everybody becomes expert in one chosen field; they rarely change track and do something different. But every five years, I changed my area of work.

ML: Tell us about each of these phases.

When I returned from Harvard, I was into anti-cancer research. Then, in 1985, I decided I must change track and was looking for new areas. MG Ramachandran was the chief minister of Tamil Nadu and had undergone kidney transplant. One morning, while reading the newspaper, I noticed that the opposition parties were asking who had paid for it -- the party or the state government. He needed to take Cyclosporine A, which is a drug given to organ transplant patients and has to be taken lifelong. The cost was Rs50,000 per person per year. I wondered why does this drug cost so much and why can’t it be made here.

I rushed to the library and started looking up Cyclosporine A. I found it was an immunosuppressant.

I had never worked on this. So I went to the laboratory and wrote on the board - immunosuppressant. This is the project we are going to work on. My researchers were very reluctant because they knew nothing about it. I said, we will read and learn. To work in this area, we had to do asymmetric synthesis. This was done for the first time in India. Then there is a compound which is 100 times more powerful than Cyclosporine, which is given today to heart transplant patients. We did the total synthesis for the first time outside the US. We worked on this till 1990-91. From 1980 to 1995 was the period when I worked on my own and the way I wanted to. Since I had made a name in research, money was pouring in from industry and I utilised it for fundamental research.

I used to have a large number of student groups. I had supervised 109 PhDs over 15 years. I used to tell them to go and sit in the library and get me some new ideas. The ideas should be for something that is tough, relevant to society and get us name and fame. These were the three criteria. One day, I was looking at vancomycin which is used when all antibiotics fail. It is a very complex molecule. It is most fascinating structure-wise and activity-wise. I knew that if we could do something with it, we will be noticed. We worked on it from 1992-95. Guess who was our competitor? A Harvard professor. He had been working on it for 10 years. Everyone said he is working on it for a long time and couldn’t get anywhere, so why did we want to get into it.

ML: The product was already there. You wanted to make a new analogue for better results?

Yes. It is like, why did you climb the Everest? It is for the excitement. Here, there was not only excitement but the work has relevance. Industry takes your work, makes a variety of analogues. Even for vincomycin, there are hundreds of new analogues. It was a fermentation product made by Eli Lilly. We were the first to synthesise it. We aimed to extend its knowledge and efficacy. We made it in two halves. Then a problem arose. How to hook the two halves together. That was the problem the Harvard professor was struggling with. I go for morning walks and, at that time, I think about all my problems. One day, while walking, it suddenly occurred to me that this may not be the way Nature has built it. So I came back and said, let us reverse the sequence; we were the first to complete the synthesis.

ML: You have also worked on AIDS medicine.

In 1988-89, I read in a newspaper that a young man had come from the Gulf and died of AIDS because of blood transfusion. There was only one drug available for AIDS which had responded in animal testing. The USFDA had approved it without any clinical trials, bypassing all the rules. It was very expensive. I deeply felt that every Indian must have access to it. We came out with a new method of making the drug. I requested Dr Hamied to commercialise it in 1991. I said, “Please make at least a small amount for the Indian market, otherwise our people will be deprived”. He was reluctant but agreed. At that time, Burroughs Wellcome had introduced the drug in India and wanted to block our product. The Indian FDA wanted the drug tested on eight HIV patients, but there weren’t that many patients in Indian hospitals. This meant that it was impossible to meet the requirement. One year passed and it was not cleared. In 1992, Dr Hamied said, “I have done what you wanted; it is not in my hands, because this man is not moving the file”.

I then picked up the phone and called the officer. I knew the person because he was on various government committees that I headed. For the first time in my life, I threatened someone. I said, “If you don’t clear the drug within 24 hours, I will take up the issue with the prime minister, who is the president of CSIR”. It was cleared in 24 hours. Cipla manufactured about 10 million tablets of zidovudine, but there were no patients. Dr Hamied said he was willing to distribute it through the ICMR (Indian Council for Medical Research), but the director of ICMR said that was not his mandate. By 1995, however, AIDS had become widespread and the market for the drug just took off.

ML: Cipla has made such a global name by offering the drug at a much lower price than MNCs.

Yes. Clinton came and visited the Cipla factory -- the Clinton Foundation buys the drug even today.

Dr Hamied really encashed on the drug and even got the Padma Bhushan. All this was mainly because of my initial pressure and he acknowledges it wherever he talks about AIDS. We share a deep bond.

ML: You moved from NCL to IICT (Indian Institute of Chemical Technology) at Hyderabad in 1985 where you transformed that organisation.

We used to consider the Regional Research Laboratory (as IICT was earlier known) as a junk lab. The post of the director was vacant and Prof MM Sharma was chairman of the selection committee. He used his prerogative to invite me for the position. So, Dr S Vardarajan, who was the director general of CSIR, spoke to Dr LK Doraiswamy at NCL to release me. But I was making a lot of money for NCL. So Dr Doraiswamy wanted me to refuse the post. For the actual selection, however, Dr Vardarajan had recommended another candidate. The ultimate decision was that of the prime minister and I learn that Rajiv Gandhi decided in my favour on the recommendation of Shivraj Patil, who was the Science & technology minister. Mr Patil had occasion to see my work and spend some time with me earlier.

Initially, I was reluctant to go to Hyderabad, so was my wife. But I told her three things: one, it is an opportunity to turn the place around, while at NCL there were at least three people who were director material; two, we are from Andhra and it may be a better place to settle down after retirement; three, if I fail, I will be able do something on my own. I will not seek a job. I came to RRL, the junk lab, in 1985. By 1990, we were the number one, based on CSIR’s yardsticks. In 1988, they initiated the young scientist’s award. Over the next seven years, we won it six times. We won all the technology awards. In 1990, they initiated a business development cash award of Rs one lakh. Dr Mashelkar was heading NCL at that time, but they didn’t even apply because they felt we would get it. There was only one application -- from IICT.

ML: Why do people say that you are too outspoken?

That is because if someone is doing something wrong, others keep quiet. I don’t. Also, I fight for the right. None of my fights is for my personal benefit. When I came to IICT, there were unions and I had to remove the troublemakers, which meant fighting the politicians.

If you remove one person, it causes a controversy; I had removed 29 people from IICT. I used to get calls recommending promotions but I never listened to anybody in my entire career. I believe scientists should be appointed on merit. I religiously followed reservations for lower posts, but not for scientific officers. Naturally, that became a parliamentary question. What did I gain personally by fighting on this issue? But, because of it, even today, IICT is a wonderful institution.

I was the only director who did not use the staff car for personal work. My wife didn’t touch the official car and if I did use it for sight seeing, I always paid for it. Once a director even told me that that by paying, I was suggesting that everybody else who didn't, was corrupt. As I said, my income tax payment was more than my salary because of earnings from my lectures. Because of my attitude, many people used to say, ‘when he retires, he will have to come to us for grants’. Everybody wants to be called a ‘distinguished scientist’, but once you retire, in our country, distinguished becomes extinguished. Once a person loses his chair, he loses all his power. So I decided to go on my own.

ML: There was a CBI inquiry against you as well.

That was instigated by a minister who I did not listen to. Once I retired, they told the CBI that I was living beyond my means and had me raided. I wasn’t perturbed. They took my passport and my wife's gold. I demanded it back by showing them all my earnings and papers. I got it back on the third day. The officers told me, “we know you, but we were helpless”. It was the first time I realised to what extent politicians would go and how weak the CBI is. It was too much. All our earnings were reported; but they chose to attack me after retirement. This is happening to Mashelkar now, but not to the extent it happened to me.  

ML: Tell us about AVRA Labs, India's first independent scientific research lab as a business venture.

Most scientists work as consultants and we think we know everything on earth. Then why beg the government for a post-retirement fellowship? It lasts only for five years, and although your successor treats you well initially, you soon begin to be treated very badly. I have personally seen it happen to several of my seniors.

I was also offered these assignments. I refused. But when I consulted them on doing something on my own, everybody discouraged me. Then I spoke to Prof MM Sharma. He said, “Rama Rao, you are the best guy; you can do it on your own”. When I told him that everybody had discouraged me, he said ‘forget about them; you can do it’. He said, “Even I get scared and prefer to work as a consultant”. I must tell you, he is the only man in the country I respect so highly. He stands for the truth and will also speak out for what is right.

ML: Did you work as a consultant after leaving IICT or did you start AVRA immediately?

Yes, immediately. I went on a lecture tour. When I lectured at GD Searle, USA, they were so impressed with work I had done on vancomycin that they wanted to sponsor a project at IICT. I told them that I had already retired. They asked me about my plans. I said, I planned to work independently. They said, “Why don’t we sponsor you”. I said, “I don’t have any laboratory as yet, but I have a shed, will you pay for it”? They agreed. I asked them what the project was. Searle executives were working on a project but were not satisfied with it, because there was a nasty chemical which was the by-product. They said: “We have a solution but we won’t tell you about it; we want you to find your own solution”.

I agreed, but said I needed some money. It was all very causal. They asked how much I wanted and I said $200,000. The deal was signed even without a letterhead, on a blank sheet. The name Avra Labs had been registered by then and, by the time I returned, the money was here.

Then I went to address the Gordon Conference. It is a rare honour for an outsider to be invited there. I was invited twice. After my lecture, one of the executives of CytoMed asked me whether I would like to work on a project. I said, yes. He asked if I would come along to meet his CEO. They wanted 100 gm of a certain molecule and asked how much I would charge for it. I asked for $50,000. They agreed and gave me the money upfront. They had given the same project to a US company for $400,000 as well as to a British company; both had failed. They wanted to take a chance with me, because the molecule had gone through Phase I of testing but they couldn't get more than one gram of it. They were desperate for a breakthrough and we made a success of it. These two offers got me started. This is probably the only company that is built with zero investment -- everything is earned and ploughed back. We got some help from DM Neterwala, chairman of Dai-Ichi Karkaria, who promised to build the foundation for me, free of charge. I was surprised; even Dr Hamied was sceptical. But Neterwala gave me a shed and also built a building for me. When it was ready, he wanted me to become the managing director. I refused and then moved out. We have been lucky in getting a series of projects. We have worked with Pfizer, BMS, Astra Zeneca -- in fact, you name any big company and we have worked with them. Our work is essentially doing scientific research and being paid for it. Now we are getting into manufacturing outsourcing in a new factory near Vizag. Meanwhile, my son, who has a PhD from Cambridge, has also joined me.

Another thing we have done is work on anti-cancer drugs that are not being made. For the first time in the world, we have introduced a totally synthetic product to make a cancer drug intermediate. We have signed with a European company to supply the compound.That was a significant breakthrough.

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“If you are not dogged in India, you have no chance. Everybody will pull you down” — Dr CNR Rao

Dr CNR Rao, the world’s foremost solid state and materials chemist, airs his views on where Indian science is headed

He is known in India as “Mr Science” and has been conferred an astounding 40 honorary doctorates from all over the world. Dr CNR Rao, the world’s foremost solid state and materials chemist, is currently the Linus Pauling Research Professor at the Jawaharlal Nehru Centre for Advanced Scientific Research, Bengaluru and chairman of the Science Advisory Committee to the prime minister. At 73, his passion is nanotechnology, especially the nanomaterials comprising carbon nanotubes. He has authored over 1,400 research papers and edited or written 41 books in materials chemistry. There is hardly any academy that has not made him a fellow, including The Royal Society of London, National Academy of Sciences, USA, Russian Academy of Sciences, Pontifical Academy of Sciences, French Academy of Sciences and Japan Academy. There is a wide consensus that he would have easily won a Nobel Prize by now if he were working in a Western country. His views on where Indian science is headed, given the way bright science students are sucked in by the software sector are extremely forthright

ML: Would you tell us a little about your background? What got you interested in science? You also said somewhere that you were taught by your mother in your early years.  

: I was born in Bangalore. I did not go to a primary school. I began formal schooling only in the middle school. My mother was a very spiritual person. She used to spend long hours in her puja and was a follower of the Madhawa philosophy of doing the right deeds. She herself did not finish high school but was very well-read through self-study. She used to read English newspapers and was aware of what was happening in the world. She taught me until I was six years old with a special emphasis on mythology and mathematics. My father was an inspector of schools. I was the only child. I had a lot of freedom.

A visit by CV Raman to our school in 1946 was probably the earliest factor influencing my interest in science. I decided to become a scientist when I was doing my intermediate course at Sahyadri Science College in Shimoga and later BSc with physics, chemistry and mathematics at Central College Bangalore. I had actually scored more marks in physics than in chemistry. I did not want to join the civil service or medicine or whatever; so I went to the Benaras Hindu University (BHU) to do my Masters degree.

ML: Why Benaras?

Because it was one of the few places where you could take additional courses rather than merely work on a thesis. At other places, like Bombay University, you had to mainly do a thesis. I wanted to study a lot of other subjects. It was the early 1950s and BHU was a great centre of learning. It had many top visiting professors including Nobel Laureates. One day, I came across a book called the Nature of the Chemical Bond by Linus Pauling. I was fascinated. What he wrote was totally new at that time. He got a Nobel Prize for it; he also got another Nobel for peace later. I felt I must work with him. After completing my MSc in 1953, I came back to Bangalore, spent a few weeks at Indian Institute of Science (IISc) and then left for Indian Institute of Technology (IIT) at Kharagpur (West Bengal) which had just come up. After a year, I realised this was not a place where I could do the kind of chemistry I wanted to (molecules and structures).

I wrote to Pauling wanting to do doctorate under him. He said, “Why don’t you work with two of my very good students?” and he gave me their names. When I wrote to them, one of them immediately gave me a fellowship. I had fellowships from MIT, Penn State and Columbia also but I went to Purdue to be able to work with Pauling’s student. He was a very fine person; unfortunately, when I went there, he became an administrator and was always very busy; he hardly ever came to the lab. I was doing my own stuff. And he said, ‘you are good at what you do, why don’t you help others in their work’? I helped a lot of PhD students. In fact, I am a common author of every paper that was written at that time.

I was about 23 at that time and I had already worked on the structure of an important molecule when Pauling had come to the university to inaugurate a new chemistry building. I had shown him how I had worked on two important structures on which he had a theory. He acknowledged my work in the third edition of his book Nature of the Chemical Bond. More important, my PhD was only a small part of the work I did at Purdue.  I got my PhD in two years and nine months, but I used to take all kinds of courses and also published some independent work on spectroscopy and physical organic chemistry. In fact, I did not get a degree in chemistry; I got it in chemical physics.

While I was taking these other courses, I used to come across various problems that others were trying to solve. I got interested in them and I ended up writing a large number of papers. By the time I left the university, I had published at least 28 papers, while for my PhD I had published only five papers. In fact, based on those 28 papers, I got a DSc in India. Somebody told me DSc was very hard to get. But I soon got a DSc degree from Mysore University based on a thesis that I had submitted there.

After my PhD, I went to Berkley. Berkley was really fantastic. The chemistry department was founded by GN Lewis who is considered the father of modern chemistry. I worked with Prof KS Pitzer who was once an undergraduate student of Linus Pauling and a noted physical chemist in his own right.  Then, in 1959, I decided to return to Indian Institute of Science where I got a job as a reader.

ML: Why did you come back?

I always wanted to come back, especially because of my mother. She would have been heartbroken if I had not come back. She had not asked me to return. In fact, she would never have said anything if I had decided to stay on in the US. But I don’t know what she would have done if I had not come back. She was so quiet and such a selfless person. She has never asked me for anything in my life and I have not given her anything either. I feel terrible now. In fact, when she died, we discovered that she had nothing with her. She had given away everything that she had. My wife was closer to her than I was. I was too immersed in my work. I got married to Indumati after I came back when I was about 26. I have been married for exactly 45 years.

ML: In the ‘50s, most people did come back to work in India…

Of course, nobody believed in America at that time. India was the automatic choice. Berkeley wanted me to work there. I don’t know what would have happened if I had stayed on. After I came back, I was offered a readership at Punjab University. I thought why should I go there? It was not such a great place. In three months, I got an offer from IISc. If that had not happened, I would probably not have returned. Do you know that Dr Manmohan Singh would have been my colleague, if I had joined Punjab University? He had joined as a lecturer of economics at that time.  He is just a year older than I am.

ML: When was this?

It was 1959. So it is 48 years since I came back. It was quite an experience. IISc was supposed to be a good institution; in fact, it was terrible. I was doing spectroscopy without a spectrometer! But however lousy the facilities, I did certain things well. The impact of your academic work is judged by the number of times you are cited. An article that I wrote at that time is one of my most cited works. I have about 35,000 citations. Most Indians do not have more than 5,000 citations and many people who are cited more than 2,000 times mention it in their bio-data. A monograph on ultraviolet and visible spectroscopy using molecular orbital notations was published by Butterworths of London in 1960 and went into several editions and languages.  I was still very unhappy at IISc. I had a long discussion with my wife and told her that in India I cannot do the kind of cutting-edge research that I want to do. For the first time in my life, I thought that maybe India is not the place to be.  She did not want to leave India, but then I was so unhappy as well.

I went to Purdue and Chicago for a short stint, came back and quit IISc.I accepted an offer from IIT Kanpur in 1963. It was started with American aid and help from MIT, Purdue and Berkeley. It was a new IIT and I was asked to build and head the chemistry department. I was just 29 years old then. I thought: how many times in life can one get an opportunity like this? That department I can proudly claim was the best chemistry department that I have ever seen anywhere. Indeed, there has probably never been a department like that anywhere in India. Every member of the team - Goverdhan Mehta, D Balasurbamanian, Animesh Chakravorty, S Ranganathan, PK Ghosh, D Devaprabhakara and JC Ahluwalia - was a member of the Academy (Indian Academy of Sciences). The chemistry department also produced hundreds of superb students. While this was happening, I also began to get a lot of awards. Sir CV Raman wrote to me a personal letter inviting me to be a Fellow of the Indian Academy of Sciences in July 1964.

I got an international award called the Marlow Medal by the Faraday Society of England; it was my first international award and Michael Faraday was my boyhood hero. I got the SS Bhatnagar prize at 34.

I remained at IIT Kanpur from 1963 to 1976. It was a busy time during which I got involved in several other activities at Council for Scientific and Industrial Research, the National Chemical Laboratory, National Committee on Science & Technology, etc. Vikram Sarabhai also asked me to chair the committee on chemistry at the Department of Atomic Energy. Towards the end of my time, IIT Kanpur was plagued by some administrative problems.

Then, in 1974, I was invited to be the Commonwealth Visiting Professor at Oxford. I went there and, my God, it was a fantastic experience! I got to do research and publish papers with JS Anderson, a pioneer in solid state chemistry. Brian Smith, a friend from Berkeley, was there too. I made some life-long friendships at Oxford.

After Oxford, I returned to Kanpur, but realised that I would have to move on to fulfil my dream of setting up a modern chemical research facility in India. Then, I went to America again to receive a medal given by the American Chemical Society from Glen Seaborg, a Nobel Laureate at Berkeley. I gave a talk after the function and there were these two deans of two universities keen to offer me positions. And I almost agreed.

When I was at IISc, I used to talk a lot with the space scientist Satish Dhawan. Satish, Shivraj Ramaseshan and I were good friends. We used to meet every day and go to the restaurant to have dosa together. While I was wondering what to do, Satish Dhawan said, “I am told that you want to leave”. I explained to him my thoughts. He said, “What is it that we can do that will keep you here”? People were like that then. Vikram Sarabhai was also like that.

I told him that I want to work and teach young people and I want to build a completely new kind of laboratory which would be so good that I can compete with the best in the world. Also, I insist that I must have complete freedom to do it. There should be no interference. That means a new department has to be created, which I will create.

I then built a new department called the Solid State and Structural Chemistry Unit at IISc. I also got involved in setting up the Materials Research Laboratory. It was a tough period and the shift from Kanpur to Bangalore was a difficult period of adjustment both professionally and for my family.

ML: What did you do next, after the IISc stint?

Well, in 1982, I was elected a Fellow of the Royal Society, London, and soon after, in 1983, I went to King’s College, Cambridge as the first Nehru Professor. A year later, I returned to IISc and was offered the post of the Director. This was another tough period as I realised the difficulties in addressing infrastructural problems. Soon after, Indira Gandhi was assassinated and Rajiv Gandhi became the Prime Minister. I had an excellent rapport with Rajiv Gandhi and a lot of good work was done during his time.

ML: Isn’t that the time that you received your Padma Vibhushan?

Well, there were many awards and honours but I really cherish only two. One of them is the Doctorate from Oxford - only three Indians of the modern era have got it -- Indira Gandhi, Manmohan Singh and I. Before that, Rabindranath Tagore had got it (laughs). After a point, it is not at all important; I have 40 honorary doctorates from around the world - and I am a member of all the academies of the world - with no exception - except maybe some of the smaller ones.

ML: Everybody says that you should have got the Nobel long ago and people have got it for less work than you have done.

I don’t know (laughs). But as a dark-skinned person, you have to be 10 times better than the whites to achieve the same level of recognition. GN Ramachandran, the world-class biophysicist, became Fellow of the Royal Society in 1977, when he was 55. He had published his paper on triple helix DNA structure in 1954! I should have got most of my international recognitions 5-10 years earlier. I became a member of Fellow of the Royal Society only in 1982.

ML: At a recent address to the Amrita Vishwa Vidyapeetham, your speech expressed worries about the future of scientific research in India.

Well, yes. Today, the focus is only information technology (IT) and software. Everybody wants to join the software industry to the exclusion of everything else. India has done well in software and people are, indeed, making a lot of money; but, as far as science in concerned, they are not the best of influences.

ML: Why do you say that?

Well, the government is being persuaded to ignore higher education. SM Krishna, the former Chief Minister of Karnataka, is a very good friend of mine. Krishna was all praise for these software czars who were very close to him. I told Krishna: “why are you listening to these people”? They have been arguing that there is no need to spend money on higher education. Higher education can take care of itself. This is a perverse argument. The Indian software industry is the biggest beneficiary of highly subsidised higher education and, today, they say that there is no need for the government to fund higher education! Higher education is not merely engineering and management which land well-paying jobs. What about pure sciences? Everywhere in the world - Oxford, Cambridge or the US, the best work is done by government-funded institutions, especially in pure sciences. But as long as Krishna was the CM, he didn’t do a thing for higher education, thanks mainly to the advice of one particular software businessman.

ML: A lot of people are complaining that the software boom is sucking away many bright people.

: The value system has become lopsided. India’s basic strength has been generosity. You have to be generous to others - to colleagues and young people. Today, everybody is so materialistic. They want a house, a car, a wife and then they want a second car and a second house. I don’t know if they want a second wife (laughs). I never cared about material things only about operational freedom, etc. We must think of how to get young people interested in science.

ML: You have held a large number of administrative positions as well; didn’t that hamper your research?

I never failed to produce papers even when I held administrative positions. But yes, the quality went down while I was dealing with petty complaints and procedures. Fortunately, my citations in the last 10 years have gone up tremendously. By my own standards, the last two years have been the most productive period. In the last one year, I have worked on many new things, new phenomena and new materials.  

ML: To what do you attribute this increase in productivity?

: You have to work at things consistently, every single day. Indians are not used to that kind of schedule. They work hard for a few days and then relax. You cannot develop a career like that. I work around 10 hours everyday. Also, if I am working on papers, I am with students all the time. I also travel extensively. I am going to Rio de Janeiro for a lecture, after that to Durham University for a lecture and then a lecture at Oxford. I just came back from Madrid.

ML: As the advisor to the PM, you have expressed concern that India’s contribution to research is meagre.

If you calculate, we contribute just 2.7% to world research. It is very little. China’s contribution has now shot up to 15%. Then there is the issue of quality. If you consider that, our contribution is just 0.5%. India is hardly represented in the top journals. You can say I have done well for myself. But that was not the objective. If that was all I was looking for, I could well have been in the US. I would have done even better. In all the enthusiasm of using bright students to sell soaps and credit cards, this is where we have landed. Plus there is too much of emphasis on IT. Look at Bombay University or Madras University. I don’t know even one good scientist working in these places which produced luminaries at one time.  

ML: What needs to be done?

University upgradation is important and that is going on. The MM Sharma Committee has been made an empowered committee so that it can take decisions. The government has approved a plan for strengthening teaching and research in basic sciences and has provided an additional Rs600 crore of annual budget allocation for this. Prof Sharma is the right person to oversee this. But we cannot wait for old universities to improve. So, we are setting up new institutions - in Kolkata, Chandigarh, Thiruvanathapuram, etc.

ML: What is the future of Indian science?

Money is a major issue. The kind of money our IT coolies are making is amazing. Their goals are clear. They want to work for a few years and then retire. After all, Indians are very thrifty. Young people with a PhD with a few years of experience are making Rs2 lakh a month with foreign companies sitting in India, while salary levels for scientists are very low - maybe Rs2 lakh a year.

The problem of globalisation is affecting us badly. You cannot globalise only salaries. What about the other aspects? Businessmen are feeling good about the economic boom but what about civic services? If we cannot fix our drainage, what science will we do? Even the 2.7% of our contribution to global science will come down to 1%. That too is by a few individuals.

To succeed in India, you need tremendous determination, courage, single-mindedness and doggedness. You have noticed I never mentioned intelligence (laughs aloud). In India, if you are not dogged, you have no chance. Everybody will pull you down, until you achieve some international standing - then they can’t do much any more.

ML: Why do you say that?

Well, when I came back from the US in 1959, I wrote a book titled Ultraviolet and Visible Spectroscopy published in London and translated in six languages. There was a lot of jealousy. I was only 25. I heard people say: who is this fool writing books at 25, which is published from London? It was unheard of and there was so much of criticism. Then, I wrote another book, which was published in New York. Then they had an even bigger problem with me and said, this guy doesn’t give up.  

Tommy Thomson, a very famous scientist, used to tell me, “You know Ram, to succeed in India, you should be partly deaf - you should not hear everything and you should be partly blind - don’t see everything”. In fact, you cannot be too sensitive in India; otherwise, you will be negative, sarcastic and cynical. That’s why I try to help young people. I know what I went through; I used to be miserable about the criticism and how people would treat me.

For instance, when I started a new subject called Solid State Chemistry a lot of people were extremely critical; ‘what is this humbug, what is solid state chemistry? Is there something called liquid state chemistry’? There were very few people working on it those days. Now, I am considered the grandfather of solid state chemistry; it is a mainstream subject and people say it is all because of me. Now, of course, I don’t care any more. But, for a long time, it was very difficult to be a forward-looking person in a backward-looking country. Strangely enough, people treat you very well abroad - if not like a God, something close. Of course, things are changing even here.

ML: You don’t seem to have any patents to your name. Why is that?

I have not taken any patents. I don’t know why (long pause). I didn’t have the money. It takes about $15,000-$20,000 for each patent. No institute has the money for it. I can’t put my own money. The Centre doesn’t have the money. I would have probably taken 4-5 patents a year. That would be about $100,000, around Rs41 lakh.

ML: But don’t people walk away with your ideas and get a patent for it?

: Yes, that happens quite often and they do use it in industry. Besides, I was not too keen, I was more interested in the research. That is why I have only displayed just two or three of my honours on the wall. One of them is my membership of the Japan Academy. I am the only Asian in it among 30 honorary members. That is the highest award Japan gives to a foreigner.

ML: Which are the other two?

One is the Dan Davis Prize, which is a $1 million award. They give three of those every year. The other is the Indian Science Award. That is the highest Indian award, so I put it up. Besides, it is made of glass. I didn’t want to drop it somewhere and break it. That is why I have framed it and kept it on the wall. Those are the only three I have displayed.

ML: On the patents issue, hasn’t the National Chemical Laboratories taken some patents which have helped?

Yea, some of them have done well, but there is a lot of hype too. Dr Mashelkar did a lot of things. But there is no doubt that there has been a decline in the standard of scientists. At one time, CSIR had some wonderful scientists, where are they today? The same is the situation in Atomic Energy Commission. Kakodkar (Anil) is a wonderful man. He is the best chairman AEC has ever had. We keep extending his term so that we continue to have a good chairman. But, one of these days, he has to leave. Who will replace him? Where are the people? This manpower crunch will hit us very badly soon.

ML: Does the PM know this?

CNRR: Of course, he does. He has done more than other prime ministers. More has happened in science in the last two years than before in terms of investment and so on. But maybe it is the wrong time. There is no one to utilise it.

ML: Like the Rs100 crore given to select institutions like IISc.

CNRR: That was stupidly handled. IISc was sanctioned the amount more than two and a half years ago, but the money came only in May. That is the problem.  

ML: Can the PM do anything more?

Well, like I said, Manmohan Singh is a decent man and very intelligent. I have worked closely with several prime ministers, including Rajiv Gandhi and IK Gujral. Gujral was a wonderful man, but had such a short term. He would have been an outstanding PM if he had continued. PV Narasimha Rao was a big disaster, though he was in the Congress. I don’t want to say anything about AB Vajpayee because I had nothing in common with his government. They threw me out of everything. I owe a lot to them because my science improved due to them.

ML: Why did they throw you out?

They thought I had sympathies for Congress. It was Murli Manohar Joshi who was responsible. They wrote a new science policy and I was not involved in it. I have been involved in government policies for decades, starting with the National Commission on Science & Technology when I was only 30. Then I was the advisor to Rajiv Gandhi, to Chandra Shekhar and so on. But I had nothing to do with government policies during the five years of BJP. And all the scientist friends of mine did nothing. There was also a lot of vindictiveness, you have no idea how bad it was. I don’t want to talk about it, except to say, that when others are in trouble, I try to help. Anyway, that is life.

ML: Your current passion is nanomaterials. Can you tell us about its future in India?

Yes, I want India to be at the forefront of nanosciences. Although we may not see the fruit of research in nanomaterials in our time, young scientists in India must get involved in it and the country must not hesitate to fund the research. I am especially interested in carbon nanotubes (these are thinner than human hair and promise to revolutionise several aspects of human life from health to defence). Unfortunately, we missed the bus on the semi-conductor technology and are much too focused on Information Technology. I want to do my best to lay the foundation of this research.

Prof CNR Rao - “Mr Science”

Number of Honorary Doctorates: 40
Number of Scholarly Citations: 35,000

Top Indian Positions Held
Chairman, Scientific Advisory Committee to the Union Cabinet
Chairman, Science Advisory Council to the PM
Member of Atomic Energy Commission
President, Indian National Science Academy
President, Indian Academy of Sciences
Member, Planning Commission
Chairman, Advisory Board, Council of Scientific & Industrial Research

Top Indian Awards
Bhatnagar prize (1968)
CV Raman award for research in Physical Sciences (1975)
PC Ray medal in Chemistry (1975)
SN Bose medal for Physical Sciences (1980)
Padma Vibhushan (1985)
Meghnad Saha Medal (1990)
India Science Prize (2004)

Top Foreign Awards
MARLOW medal from Faraday Society, England (1967)
Centennial Foreign Fellowship of American Chemical Society (1976)
The Royal Society of Chemistry (London) Medal (1981)
Hevrovsky Gold Medal, Czechoslovak Academy of Sciences (1989)
Honorary Fellowship, The Royal Society of Chemistry, London (1989)
Honorary Member, Materials Research Society of Japan (1990)
Honorary Member, Materials Research Society of South Korea (1991)
Blackett Lectureship, The Royal Society, London (1991)
Albert Einstein Gold Medal, UNESCO, Paris (1996)
Linnett Visiting Professorship, University of Cambridge (1998)
Centenary Lecturership & medal, Royal Society of Chemistry (2000)
Hughes medal for Physical Sciences, The Royal Society (2000)
Officier de l’ordre des Palmes Academiques, France (2002)
Order of Scientific Merit, Grand-Cross, President of Brazil (2002)
Commander of the Order of Rio Branco, Brazil (2002)
Gauss Professorship, the Academy of Sciences, Germany (2003)
The Dan David Prize (2005)
Chemical Pioneer, American Institute of Chemists, USA (2005)
Chevalier de la Legion D'honneur, France (2005)
Honorary Fellowship, Institute of Physics, London (2006)

Top Fellowship/Membership
Fellow, The Royal Society, London
Foreign Associate, National Academy of Sciences, USA
Honorary Foreign Member, American Academy of Arts and Sciences
Member, Pontifical Academy of Sciences
Foreign Member, American Philosophical Society
Founding Fellow, Third World Academy of Sciences
Foreign Member, Russian Academy of Sciences
Foreign Member, Academia Europea
Honorary Member, Japan Academy
Foreign Member, French Academy of Sciences
Foreign Fellow, The Royal Society of Canada

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Roshani Shah

2 years ago

Am totally in awe of your struggle from day 1 and highly respect your self determination and efforts put in. Would be highly obliged if I could get connected to you personally.


2 years ago

Thanks for this great interview. Really words of wisdom.
top heart hospital in delhi

Abhijit Gosavi

5 years ago

Again, great interview! He says: "India is hardly represented in the top journals." So very true --- not just of the sciences but also of business/management studies! The IIMs hardly produce any papers in top management journals :(

P M Ravindran

5 years ago

Thanks for this timely post. I had been wondering who this scientist is after the news of his being conferred a Bharatratna along with Sachin. I am glad that a well deserving person has been selected for the honours.


9 years ago

Sounds little arrogant but I think he speaks from his heart.


Roshani Shah

In Reply to Devender 2 years ago

I respect people who speak directly from their heart rather than speak to impress.

“Once we decide to get into something, we get into it with the assumption that we don’t know anything” — Grandhi Mallikarjuna Rao

We don’t know of too many who have achieved so much, so quietly as Grandhi Mallikarjuna Rao of the GMR Group

Some 30 years ago, Grandhi Mallikarjuna Rao used to cycle 25km-30km a day in rural Andhra Pradesh collecting money for the rice, spices, jute or grains that he had supplied. Rao was a mechanical engineer, the first graduate in his family living in a village not far from Vishakapatnam. Today, Rao oversees assets worth Rs15,000 crore in power, roads and airports. Though Rao is extremely low profile, when you think of private initiative in Indian infrastructure, you have to think of GMR. Rao entered infrastructure by accident. Before that, he became a banker by accident. Once Rao enters a sector, he is methodical, focused and has global benchmarks. This has enabled him to be an unparalleled serial entrepreneur – trading, jute mills, ferro-alloys, banking, power, breweries, ear-buds, roads, airports... We don’t know of too many who have achieved so much, so quietly. Here are the excerpts from a conversation about his enterprise, vision and values

ML: Could you tell us something about your family and your childhood.

My family came from a small village called Rajam, 100km from Vishakapatnam (Vizag). We were in a trading family buying jute and grain from the farmers and selling it to the mills. We are four brothers and three sisters and nobody was really educated. I was the third son. I  had failed in my SSLC (secondary school leaving certificate) exam. I used to roam around with my friends, sometimes cycling 50km to the nearest town called Vizianagaram to see movies. Nobody really bothered about what we did, unlike today, where my daughters-in-law are completely focused on their children’s activities. Anyway, I wanted to reappear for my SSLC but there wasn’t much encouragement. The examination fee used to be Rs50. It was only after much persuasion that I could appear again. From that day, my life took a turn. I began to study and, eventually, stood first in the school.

ML: What is it that brought about this change in you?

Well, one reason was that I used to be completely influenced by my friends. Since all of them failed and I was appearing alone, I began to study and put in a serious effort. I not only stood first in my SSLC, but even when I went to college for my PUC (Pre-University Certificate) at Bobbili, I stood first in college. Then I got into engineering college. Those days, there were only four or five engineering colleges in Andhra Pradesh (AP). I went to study mechanical engineering at Vishakapatanam. I used to be a student leader in the college which had around 2,000 students.

I was the first graduate in the family, passing out in 1972. Within one month of my graduation, my father divided the family assets - each of us got Rs3 lakh and a house. My father wanted me to look for a job, but my mother wanted us to do business - I wasn’t sure what business we could do with Rs3 lakh. Eventually, we four brothers got together and got back into trading.

Even then, my father wanted me to take up a job, so I joined AP Paper Mills at Rajahmundhry as a shift engineer. I soon left that and joined the Public Works Department as a junior engineer for a few months. My mother kept insisting that I must do business. I finally left the job and joined the trading business with my brothers. We used to buy gingelly seeds and black gram and sell it at Chennai, Nagpur and other places. That gave me a rich experience -- collecting money and dealing with bad debts used to be a challenge. I used to travel and stay in small hotels. Sometimes, I travelled 25-30km a day by cycle to collect money. Earlier, we used to supply to really small traders, but I made contact with bigger brokers in Chennai and began to supply to them.

After a while, my brothers said why don’t we start some small industry? Those were the days of the licence raj and it was very difficult to get a licence. I got to know that someone was selling a jute mill licence in Chennai and the factory was closed. I purchased the licence and machinery and shifted the plant. This was a tremendous job. We didn’t have any contacts. I struggled for six-eight months to get all the permissions from the state government and also the Jute Commissioner at Kolkata. Finally, we got all the permissions and set up the factory as a small-scale industry for around Rs40 lakh.

ML: Why did you shift the jute mill to the village, which was in the interiors?

Raw material was easily available. There was also a good demand for twine and people were willing to pay in advance for it. We didn’t know bankers and it took over a year to get finance. Getting cement and steel for construction was also a long-drawn process because everything was in short-supply and we needed many permissions. Eventually, we started production in 1978.    I used to be very active in the village and that threatened the local politicians. They began to create problems between the workers and us.

ML: How many workers did you have?

There were 500 workers. One of the senior leaders was my junior in college. I never compromised. I used to look after my workers financially and didn’t give the union a chance to complain. However, I was strict about discipline. There was a strike but I refused to compromise and eventually resolved the problem. It taught me how to deal with politicians.

ML: What was the division of responsibility between you four brothers?

I used to look after the jute mill. We also had a transport business which one brother looked after. The eldest one was in trading and the last brother was in charge of a rice mill and an oil mill. After the trading business, we first started an oil mill, then the jute mill and, later, a steel rolling mill, then ferro-alloys. In the early 1980s, the government nationalised the transport business and we lost the three buses that we used to run. By then, we had acquired another jute mill and my second brother switched from the bus business to looking after the other jute mill.  The ferro-alloys business was 50km away at Tekali. It was managed by a friend of mine who resigned his bank job and came to look after it.

I then started making cotton ear-buds. I wanted to do something that was suited to our region. In fact, I wanted to start an export-oriented integrated textile mill. We tied up with BYC of Korea to make hosiery products. We had signed an MoU and the chairman had even visited our village. It was the first deal that they were planning with India. Mitsubishi was part of it and was in charge of supplying machinery and marketing. This was in 1990. India was on the verge of a foreign exchange crisis and even opening a letter of credit (LC) had to be approved by a foreign bank. So the project didn’t take off. But on my repeated trips to Korea, I hit upon the idea of a cotton ear-buds project. Johnson & Johnson was the only player in this business. I set up an export project in Chennai and we exported the ear-buds to various countries. I later sold the business. It was always my dream to start a sugar factory and a brewery. In fact, I used to apply for every licence available. I got the brewery and sugar licences at the same time. As it happened, just before I could start the brewery, the NT Rama Rao government came to power and introduced prohibition. I will come to that story later.

ML: Was this together with your brothers?

No. In 1987-88, we separated our businesses. My brothers felt that the cash accrued from other businesses should be divided and distributed rather than redeployed into newer businesses. However, my view was that it would be better to start new industries. By then, we had grown into several industries. My elder brother had started two more jute mills; we were also into plastic pipes, cycle rims and other small industries. We took just three or four days to separate our businesses. We shared a good relationship and that helped.

ML: How did you get into Vysya Bank?

In 1985-86, the Reserve Bank of India (RBI) brought in a policy that bank directors could have a maximum tenure of eight years. Vysya Bank, a small private bank in AP, had Rs60 lakh capital. Its previous directors had resigned under the RBI rule and new ones were being inducted. Ramesh Gelli was the Chairman and the bank operated mainly in Tamil Nadu, Andhra Pradesh and Karnataka. They were looking to expand in the costal belt of AP and Tamil Nadu. Andhra Bank was my banker in those days and Vysya Bank was looking for good people from the vysya community (trader community) with good connections in the costal area, which I had. At that time, they requested me to join the board. I accepted the directorship. It was a profitable bank, had 200 branches, paid a good dividend and was a listed entity.

In 1987-88, Vysya Bank made a 1:1 rights issue to meet RBI’s capital adequacy norms. Gelli requested all the directors to support the issue, but the Bank managed only a 50% subscription. I invested Rs5-6 lakh and requested all my friends to invest - my brothers and friends in my village and other family member invested Rs5,000 to Rs10,000 each. Other directors put in about Rs1 lakh each and, with great difficulty, the issue was fully subscribed. I even pledged my wife’s jewellery to support the issue. A year later, Vysya Bank made another rights issue. It was the same story again. I invested again and my shareholding went up to 12% and I became a major shareholder. I was still living in the village and only came to Bangalore for board meetings. But I took an active interest in the running of the Bank and was on various committees. When Ramesh moved to start Global Trust Bank (GTB) in 1994, there was a big vacuum at Vysya. There was a major management bandwidth problem and I was the biggest shareholder.

ML: What was your stake at that time?

My holding was 18%-20%; in fact, a major part of my wealth was in the Bank by then. There was also a lot of outside interest in acquiring private banks. Some directors wanted us to sell out. With great difficulty, I convinced my wife and we shifted to Bangalore. It is difficult to relocate after the age of 40, but I did it only for the Bank. Vysya Bank had started many associate companies and subsidiaries for leasing, housing, a travel agency and even a portfolio management club. They consumed a lot of management time and, worse, attracted negative publicity. Closing down each of these businesses was very difficult, especially the portfolio scheme. We discovered that there was no back-up software for many services and many investors had filed cases against the Bank.

We finally decided to focus on core banking. It was a big learning experience for me. I had to recruit nearly 200 people overnight, mainly from the public sector banks. I didn’t know anyone at RBI, since I came from a village. It used to take me two or three days even to get an appointment. People thought the Bank would collapse, but gradually I began to figure out how to create trust and credibility. I gave a 5% stake to Banque Brussels Lambert (BBL) -- a Belgian bank. This was to create confidence in Vysya Bank. I not only gave them a place on the board, but also a representation on every board committee. That helped us learn a lot.

ML: What about your other existing businesses?

I continued the other businesses with the help of my friends. I had planned to be with Vysya Bank only for a year and go back after the problems were resolved. But I realised that only half the problem was resolved. My son-in-law and one of my classmates joined me and we also began to explore other business opportunities in Bangalore. That is the time we made a public issue for the brewery, but prohibition was announced just as we were set to deploy the funds. I met Chandrababu Naidu on a flight just before the elections and he told me that when we come to power, we intend to introduce prohibition. We had to immediately change our plans. Just around then, the power sector opened up for private investment. We got the licence for an independent power project (IPP) at Chennai. I was trying to run the Bank and also the power project. It was a lot of hard work and even affected my health.

Then KR Ramamurthy joined us from Corporation Bank (as chairman & CEO) and after that my workload reduced. We introduced technology. There were a lot of other legacy issues as well, because of an asset-liability mismatch and a lack of systems and processes. There were some leasing deals and aggressive lending to builders during the scam of 1992, which began to show up only later. As India’s economy went into a slump, our non-performing assets (NPAs) touched a high 15.6%.  I created a separate committee and a team that was focused only on recovery headed by an executive director. I did nothing but recovery. We met every Saturday with the team to assess issues. If the borrower faced a genuine problem, we supported him, but we did not show mercy to wilful defaulters. Over two years, we reduced the NPAs to 4.5%. Most industrialists I knew were sitting on the other side of the table. That was another rich experience  and I learnt how banks are willing to support businesses in times of genuine difficulties, if the borrower is honest.

The next big development was that we got a licence to enter the life insurance business and BBL increased its stake from 5% to 10%. Then ING purchased BBL internationally. ING wanted to raise its stake in Vysya to 20% in that business and we agreed. We started the life insurance business but not mutual funds.

Let me complete the banking story. We had brought in several top bankers such as K Balasubramaniam, former country head of American Express in India. He and others helped us make a lot of changes. Then ING offered a very good price for our stake and I decided to sell out. I continued as non-executive chairman for a while but I resigned eight months ago because even the non-executive position has a lot of time commitments. ING, however, wanted me to continue as chairman emeritus. We sold the life insurance business to Rajan Raheja.

That is when we began a process of consolidation. On the infrastructure side, the power project was successfully implemented at Chennai. My eldest son had returned and the younger one had gone to Singapore. Meanwhile, we bagged a licence for a barge-mounted project in Mangalore (the Tannir Bavi project), Karnataka. Thirty-six licences were given out. A Malaysian company and a Chicago-based company had got four barge-boat licences but were not able to implement them, because the Malaysian economy was in trouble. We purchased the licences from them and implemented the project. Building the floating power project was another learning experience. We faced a lot of litigation and learnt to deal with it while ensuring successful implementation. We commisioned the project in exactly nine months.

ML: But you had a power project in Chennai as well.

At Chennai, I had an American partner, CMS Energy, who had a 49% stake. In Tannir Bavi (Mangalore), I had a 26% stake and the rest was owned by our American partner PSEG (Public Service Enterprises Group), because I didn’t have much funds. Around that time, we set up a BPO.  Within seven or eight months, we got a very good price and sold our stake to I-Gate. Somehow information technology (IT) is a different game and difficult to understand.

ML: You have set up businesses from jute mills to power projects. What is the common strategy or approach in all your diverse businesses?

I trust my people. Also, in my whole life, every time we entered a field, we have tried to set a new benchmark. Due to my banking experience, I used to meet a lot of people. One of them was SV Venkatesan of the Essar group who I had given a ‘white knight’ shareholding of 5%-6%, which I subsequently bought back. When I was getting into the power sector, he gave me some good advice. He said, “Don’t get into construction. Focus on completing the project on schedule and always pay your bankers one day before it is due. If you do that, bankers will give you a lot of support”. That is the principle I have followed. So I gave the complete EPC (engineering, procurement and construction) contract to Hyundai Heavy Industries. Simultaneously, we supported them because they were new here. The project was completed a month ahead of schedule.

We used to avoid fights with the state government, so we created a team that was completely focused on resolving issues. For instance, in Chennai, which has water shortage, we invested in a water purification plant using German technology that cleaned the sewage water to the level of drinking water and used this for cooling the plant. We also used a two-stroke diesel engine, when most of the engines used in India are four-stroke (which are cheaper but have higher maintenance cost and fuel consumption). Although the state government did not specify this, I decided that the project is a national asset. The engine should last and we must have the best technology. Bankers didn’t know about the technology, so I brought a whole team from Germany to make a presentation to establish its efficacy. Today, our plant is in the eighth year of operation and is working efficiently.  We had the same approach to the Tannir Bavi power project, which is naphtha-based.

It is not as though there are no challenges. But we try and work around them to arrive at compatible solutions with the state government. We created a focused team and worked together with the state government and the power board, so that we create a win-win situation for all.

ML: Infrastructure projects are messy and you were doing several projects simultaneously. How did you hire people to handle all the problems skilfully?

We are always looking for people who have good leadership qualities and fit into our values, systems and culture. I have also been keen on setting up good systems. For example, we have divided each business into operational assets and business development. That helps us to stay focused. On the issue of people and leadership, we entered the power project in an interesting way. One of my classmates was a marine engineer who was working in the power sector. He had set up a 50MW power plant for Ferro Alloys Corporation.

At that time, we had raised Rs18 crore to start a brewery but prohibition in AP had stalled our plans. We were looking for a new options and hit upon the idea of starting a power project and I got my friend to join me. In that sense, our move into the infrastructure sector was accidental. But within a short time, we set up three power plants in a very focused manner.

ML: Why did you sell your Vysya Bank stake after all the hard work to revive and clean up the Bank? Most Indian businessmen do not sell what they have built.

It was an emotional decision and a lot of debate went into it. Even today, I am emotionally attached to it. At times, it was even more so; if anyone criticised Vysya Bank, I took it personally. But my son said that banking is a difficult business because to grow you have to constantly bring in more capital. Where would I bring so much capital from and what would be the return on it? My sons also pointed out that globally banking is not a family-run business. So after a lot of debate and discussion within the family, we made a decision.

Another factor also helped. By then the Enron problem had surfaced and IPPs were all in trouble. CMS Energy closed down their Singapore operations and PSEG closed their Asia operations. Both offered me their stakes at an attractive price. So the two things happened simultaneously. The two foreign partners in the power project were persuading me to buy them out and I had the option of raising good money by selling my Vysya Bank stake. But it wasn’t easy. My wife didn’t want me to sell but Ramamurthy and Balasubramaniam (Bala) also explained why it made sense to sell. We only decided after eight months of considerable debate. ING also convinced me that I would remain non-executive chairman.

ML: So the next big leap was airport infrastructure?

: No, it was roads. That was the time that the roads annuity scheme had started. For the first time, National Highway Authority of India  (NHAI) had identified six roads which would have to be built and financed by the private sector. In the first phase, three roads were offered and we bid for all three. It was a BOT (build, operate, transfer) annuity model. NHAI would pay an annuity for 15 years. We went into it very aggressively. Our group emerged as the lowest bidder for all three and the difference between us and the next was huge.

ML: What was your advantage?

We focused on financial returns. Maybe the others wanted to earn returns on project cost and construction. I don’t know their calculations. Now, NHAI was faced with a huge dilemma about the difference in rentals that we quoted. They did not want a miscalculation anywhere that could derail the privatisation initiative, since this was the first such experiment. Many people started a whisper campaign against us and our ‘lower’ bid, since we were doing it for the first time. NHAI took months to decide. I went and explained to NHAI that we had built two power plants with  an outlay of Rs2,000 crore. The barge-mounted one was particularly difficult. I said: “I am investing my money in the road projects; I am offering a bank guarantee and, in any case, you can always throw me out if you want to”. NHAI agreed. For four new projects, they called for fresh tenders. Everyone quoted 5% below our bid! We had created a benchmark. I completed both the projects before time, visiting the site every week, went for securitisation and also availed of early completion bonus and made good money. Almost Rs400 crore has come and it was a very good beginning. After that, we won four road projects -- one annuity-based and three on rental basis.

ML: For your power project, your friend had helped you with initial knowledge of implementation.  Who piloted the road project for you?

We have a group executive council, which consists of all sector heads. Bala, my two sons (Kiran Kumar and GBS Raju), my son-in-law (Srinivas Bommidala) and my classmate BVN Rao. We meet every Saturday at Bangalore (whoever is not in the city participates through a videoconference) and decide our course of action.

ML: What was the next move in infrastructure?

I always felt that I had not set up anything in my own state and wanted to do something there. I had sugar factories and other businesses, but I wanted a large project of over Rs1,000 crore. Then, in 1999, the AP Government called for a global tender to set up a greenfield international airport. We decided to bid for it and tied up with the Malaysian Airport Authority for that bid. The criterion of selection was based on which bidder sought the least grant. The airport would have to cater to five million passengers. While 26 entities showed interest, there were only three final bids. Our bid was the most competitive and we got the project. I knew that Chandrababu Naidu had a passion for international quality. But here again, there was a long delay after we won the bid and I got to know that government had apprehensions about whether we could deliver international quality. But they wouldn’t say so openly. I went and explained that I had built two world-class power plants and suggested that they could send a team to see them. The Principal Secretary himself saw the projects and the team was convinced. But they put in another condition that the Malaysian Airport Authority must bring in some equity; that was not part of the original condition. At that time, Malaysia had gone through an unhappy experience in India and was against the investment. Again, we went to Malaysia and convinced them that we are different. We had built other projects and would make a success of this one too. Then they agreed to invest US$10 million. There were further negotiations and, finally, in 2003, we signed the shareholders’ agreement.

Once we decide to do something, we get into it with complete focus and start on the assumption that we don’t know anything. Everybody in the project team, including me, goes through a learning process. Since airports were new to us, we got the best people in the world to talk to us. We went to the International School of Business, Hyderabad. We also had a two-day seminar by Prof Rigas Doganis from Cranfield University -- an international expert to explain all the details of airport infrastructure and their role in the country’s economy. We visited all the major airports in the world. We wanted to build a world-class airport; after all, it is a national asset and creates the first impression about the country. We appointed Bruce Benjamin, who built the Hong Kong airport as a project head, COWI of Denmark and Aviaplan of Norway for engineering and master plan preparations. We have given out construction contracts to the best people in the world. The runway was given to L&T and the terminal building to China State, which built the Hong Kong airport.

Around that time, the government started deliberating on the modernisation of Delhi and Mumbai airports. The process began in 2003. We put together a team that began to study airports right then. We used 15 international consultants to bid for the Delhi and Mumbai airports. We spent over Rs34 crore on the bidding process itself. We knew that it is a lifetime opportunity and we wanted to do our best. That gave us an advantage when the current government revived the modernisation plan. That is why we were the only one among the six bidders who qualified for both the airports. The selection norms were very stringent. There were 100 marks for management capability and development capability; and one needed  more than 80 marks to qualify. These marks were again broken up over specific capabilities. We used to follow this very carefully and worked on strengthening all areas where we were weak.

In 1995-96, we started the process of consolidation. I sold off my brewery and got a very good price for it. I always believe that if you build something world-class, you don’t need to worry about it. I sold the brewery to Vijay Mallya. He is very proud of it and is implementing some of my systems in other breweries. We managed the brewery for one year but later had given it to Shaw Wallace on lease. Later, we decided to get out of liquor and IT. We have decided to give out the jute business on long-term lease; we sold the cotton ear-buds business. We were also into timber exports. We sold that as well.  

ML: Did the council take all these decisions?

Yes, it was part of our consolidation exercise. We have decided to stick to agriculture and infrastructure, since these sectors are important for the country’s economy. The agri-business is still small but it is close to my heart, since I come from a village. We are in sugar with 5,000 tonnes of crushing capacity. We want to go for 25,000 tonnes. We are building one plant near Hubli and have identified two or three locations in Karnataka. In infrastructure, we will be in power, roads and airports.

In the power sector, we will be in hydro, pithead thermal projects, nuclear and transmission infrastructure. In hydel power, we already have on hand a 140MW plant at Badrinath in Uttaranchal and a 160MW project at Arunachal. We have also bid for two hydel projects in Nepal and a decision is expected any time.

We have a 1,050MW thermal project in Orissa. We have a good team for transmission and have already created a team to pitch for nuclear projects whenever it opens up.

We will also bid for viable global projects.

In roads, we have 453km under management, of which 140km are already operating and, by next year, all the projects will be in operation. In airports, we are looking at related business. We are setting up an MRO (maintenance, repair and operations) facility with LufthansaTech for aircraft checks. Today, most airlines go abroad for their advance aviation checks. We have 5,400 acres around Hyderabad airport, with a 26km boundary. Within this, we want to develop an aerotropolis by building a city within. This will include business centres, exhibition centres, convention centres, residential complexes, a 300-room hotel and a golf course and a 250-acre SEZ.  

In every business, we want to emulate international models. For instance, at the Hyderabad airport, we have an open access fuel system that will allow all airlines to choose their fuel supplier. Similarly, for the airport hotel, we have brought in Novotel of the Accor Group of hotels who are among the best in the world. Even cargo, baggage and ground handling will be mechanised and handled by an international company. This will fetch better efficiency and will also be cost effective for the airlines.

ML: We understand that, like your father, you have also decided succession in detail.  

Actually, like my father, I too was planning to divide all the assets among my children by creating three units. Fortunately, I attended a conference and listened to MV Subbaiah of the Murugappa group on family succession. It was an eye opener for me and I discovered that there were family businesses that have existed for over 300 years. When I heard that, I put together a team, which included senior bankers, HR consultants, etc., to write a family constitution. We have a separate family office as well. Subbaiah told me, “Don’t be in a hurry to write it -- it is not as easy as writing a Memorandum of Understanding -- everybody has to agree and be committed to it”. It took us nearly 570 hours to work on it over a four-year period. Then Bala suggested the name of Peter Leach of UK.  His firm has been working with leading business families for the last 130 years. Leach has been working with us for two years now.

ML: What are the key elements of the constitution?

: The constitution lays down the selection of my successor. I don’t nominate my successor. He will be selected by the next generation. It also spells out a system of good family governance, conflict resolution and valuation of the business. The process of inducting new family members into the business, including their level of induction and qualifications required is addressed; if some members do not want to enter the business, the required provisions are dealt with. It also articulates the family values. All the ladies in my family -- my wife, daughters and daughters-in-law -- are experts on what is on each page of the constitution. That is important because otherwise they will not own and commit themselves to the constitution.

ML: All your skills - entrepreneurship, judgement about people and drive - how will that be carried forward to the next generation?

Four years ago, we had a conference in Goa, where we debated the future of the family. We identified seven business values that are important to us and also a set of family values. The challenge was how to infuse them into the way we do business. It includes entrepreneurship, humility, delivering on promises, teamwork and relationships, social responsibility, respect for individuals and learning. It is a big challenge for me as well as our group to imbibe and internalise these values. Even in our corporate performance appraisals, weightage is given to values. I believe that once the values are intact, the same entrepreneurship will continue and sustain the group.  

ML: What is the next challenge in your life. After all, you have even decided on succession.

(Laughs) I have been told that if the founder decides the succession, then things have a better chance of working out. Living within a constitution is not easy -- after all, we are human beings and I am bound to differ even with my sons; each one thinks differently. So every two months, we  sit down and discuss things. We have a family business board, a non-business board for the ladies, a separate spiritual counsellor and an independent family office. A small difference can fester and blow up into a bigger issue. It is better to sit down and clarify matters in time. We take the same salary and perks. We have even decided what car each one can have. So, if someone wants a better car, he cuts back somewhere else. For me personally, the big challenge is to create a good institution. We acknowledge that there are differences but we want to learn how to manage them. We have grown in assets but compared to other large groups, we are only beginning. It is important for us to have good systems and processes. We are putting in place a good IT infrastructure and have started several HR initiatives. I don’t want to be the biggest in the world, but I want to set up a good organisation.

ML: You set up a Foundation for social initiatives before CSR became fashinable. How is that working?

About 10 years ago, we set up a Foundation called the GMR Varalakshmi Foundation. Fifteen years ago, when I started my jute mill, I used to do a little bit for the people around, but 10 years ago, we set up an engineering college for the rural folks. Between 3%-5% of the group’s profit goes to the Foundation, which is a Section 25 company (not-for-profit). It focuses on only four areas -- education, health & hygiene, empowerment and community development. Its aim is to reach out to the poorest people around the location of our factories.

In education, we have set up primary schools, identifying bright people and sending them to vocational courses. We have balwadis, pre-primary schools and primary schools. We are even supporting government schools and and have schemes for school dropouts and another for gifted children. We take care of these children like our own and give them all the facilities to study anything they like.

We have mobile health care units & ambulances and we also conduct health camps. We have built toilets in our village, which are like five-star toilets. It is easy to build toilets, but difficult to maintain them. We are doing the same at Hyderabad as well. Our empowerment focus is to train people in a variety of vocational courses for men and women -- this includes spiritual training. Our community development effort is headed by V Raghunathan, who was a professor at IIM Ahmedabad and later president at ING Vysya Bank. He is working with passion at rehabilitating people from backward communities, offering them the right education and vocational training and create self-help groups to help them earn a livelihood.

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sesha chalapathi reddy c

9 years ago

hi, can u please keep in touch

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