Multinational Corporations: MNCs

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Multinational Corporations (MNCs) are those private companies that work in more than one country.
They produce or provide goods or services at higher quality and according to the latest global norms.
They also employ the best human resource in a country and those build brand images that are unique, stable, and above all, saleable.
In India, MNCs had arrived in the mix-sixties of the last century.
Colgate and Palmolive were the most trusted names of those times.
The sixties also saw the presence of the drug giants.
Glaxo, Nicolas and other drug majors gradually made deep forays into the Indian markets as the population demanded more medicines.
But our economy remained a mixed one and our governments always looked at the MNCs with suspicion.
During those times, the concept of MNCs was not born.
The Japanese had just started their marathon run in the field of consumer electronics.
They were disliked by most of the Indian consumers because of nil credibility.
During the dying years of seventies, the stage was set in India.
During the last years of eighties, this stage was reset by integrated circuits, CNG machines, drugs for fighting heart attacks and the like.
So, the Indians had to rely on MNCs, which had become synonymous with technology, comfortable products and cheap rates.
Most of MNCs entered India during the late eighties or early nineties.
The government favored their entry because of its changed and liberal policies related to economic reforms.
Several MNCs established their offices and factories in urban centres of India.
Some even went to villages and signed deals in collaboration with the Indian firms.
Sales soared and FMCGs became the hot goodies on the television shoes and in the advertisements.
Cable TV networks, satellite connection and internet connections did the rest of the job.
Western culture brought the concept of consumerism or "fast eaters".
Naturally, a nation that had a population of above one billion had to be given these new products, services and gizmos.
And MNCs filled the void that was left by local manufacturers.
It is surprising to note that not a single firm has been able to compete with Colgate Palmolive in the toothpaste market; it is the undisputed leader in this segment even today, despite the fact that there are nearly one dozen competitors.
This credibility did not seek in the minds of the Indian consumers in a day.
It took several years and billions of dollars to make these products and services instant success.
And there were fiascos too.
The cases of Enron and Cogentrix are the two glaring examples, which bluntly tell us that we may not have any collaboration in the power generation sector.
Although, Enron has displayed several flaws (like high price of power kwh at Dabbol Power Corporation), yet we cannot deny the fact that we also made a mess of the issue and moved in an unplanned fashion.
The free market economy of India has made the task of MNCs quite easier.
Many of our readers may contend that we are not "completely free", if they keep scandals, scams, corruption and the PSUs in their view.
But this ultimate change is inevitable.
If ours is not a fully free economy today, it shall be one after 50 years.
The MNCs realize this fact and so they have started establishing themselves in India - physically and psychologically.
Several MNCs align their advertisements with local festivals, religions, beliefs and political sentiments.
They have become a part of our culture quietly and in a stealthy manner.
Thus, saviours may be deemed saboteurs by many political outfit.
We agree that the opponents of these global economic giants are not totally wrong.
They are saviours on many fronts - medicines, heavy engineering, information technologies, medical diagnostic equipment, aircraft, chemicals, rubber products and electronic gadgets.
New technologies and devices have put Indians on the path of ultimate progress.
No wonder, we may become a developed nation soon due to inflow of capital, technologies, consultancy and manpower into this land.
Thus, MNCs have contributed a lot to our economy and will do so in the future too.
MNCs are also being allowed to enter those sections which were hitherto deemed the exclusive areas reserved for the Indian firm.
Ironically, we must state that the MNCs would do much better in those areas, thus putting out our own coin under shade.
Banking, insurance, car production and telecommunication services are some of the services in which they would outperform Indian firms.
Thus, Indian firms would neither be required to meet the challenge or fade into oblivion.
Finally, every MNC comes to India to earn money.
In a free market system, any amount of money can be transferred by an MNC to its parent country.
This would lead to drain on our precious foreign exchange reserves.
We cannot check the flight of this capital.
Had our own enterprises been efficient, productive and innovative, we would not have threats of this kind.
It is pity that we import shirts, jeans and electronic gadgets, whereas we can manufacture them at much cheaper rates in India.
Our quality control norms are poor and so, customers get swayed by the quality of products and services of MNCs.
Our own firms (like NIIT, Reliance and RITES) are multinationals.
So, we can easily emulate them.
We can conclude by stating that we need MNCs as we are part of the global trading culture.
We must allow them to operate in those high-technology areas in which, we lack the expertise.
We should also import technologies through them but we should manufacture products or services in India.
MNCs should not be viewed as saboteurs.
But they must not be allowed to control the destiny of our nation.
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