Family business key to India’s growth

Chennai:

Indian family business model is key to nation’s growth and businessmen instead of aping Western model should understand the culture that drives our economy, according to noted economist and corporate advisor S Gurumurthy.

Addressing Confluence 2012 organised by Metis Family Office Services Pvt Ltd here on Friday, Gurumurthy stressed the need for intellectual re-engineering of Indian businessmen so that they can understand the depth of their civilization.

He said the current global crisis is the result of the collapse of family system in the West. “This resulted in less bank balance and more borrowing resulting in more consumption and more debt,” he said.

He said India’s economy grew not due to foreign investment but due to family businesses and rued the fact that India management graduates are unaware of it. Instead, they consider family businesses as inferior, he said.

Hitting out at political economist Max Weber and social scientist Karl Marx, he said they made comments about India without visiting India and we believed it. “It is intellectual slavery. When our minds get clogged we can’t do business with pride,” Gurumurthy added.

Culture builds a nation and erosion of it destroys a nation, he said, adding that India has to internalize its cultural power. In India, it is estimated that 95 per cent of the registered firms are family businesses Just 13 per cent of the family businesses survive till the third generation and only four per cent go beyond the third generation