Global Economics

India's Real Estate King


India's Gurgaon is the world's call-center hub. The newly built township, a short drive from New Delhi's airport and just 28 miles from the city center, looks like Shanghai in the 1990s—a hive of construction activity, complete with tall cranes, wide dusty roads, half-built overpasses, and swish buildings (see BusinessWeek, 7/10/06, "DLF: The Making Of A Global Real Estate Giant").

Kushal Pal Singh, 74, a former army officer and chairman of developer DLF Ltd. dominates Gurgaon—DLF controls 3,000 acres or about 25% of the township. Singh bought the land over years, painstakingly, patch by patch, and now it's India's showpiece. BusinessWeek Bombay Bureau Chief Manjeet Kripalani spoke to India's real estate king in his office in New Delhi about his views on India and his entrepreneurial efforts. Following are edited excerpts from the interview.

How have you seen India change over the years?

I've seen a lot in the last few years, starting in 1982, when India was a closed economy. The first time Jack Welch visited India, he said it may be a closed economy, but one day it will open, and India will be the booming economy, spearheaded by intellectuals. At that time no one really thought that. GE (GE) moved to India in 1987 or so. Then everyone followed.

What's the India story like now?

The India story will always be one step forward and two back, but the step forward is a very long one. This is a democracy with so much freedom of expression that any government in power has to develop a consensus. It's good that consensus is happening. The government is taking care of India's social challenges. And the quicker the problem is solved, the more successful we will be.

There is no parallel to India in the world. India has consolidated its democracy with a religious and secular setup, there are issues of caste, etc. But as more of the economy opens up, there is a more painful transition. As a businessman, I ask: Why is there opposition for the sake of it, over [the modernization of] airports and state-sector disinvestment? The role of the leftist parties is that of devil's advocate—but it should only be up to a point. It should just keep the government on track. You cannot remove poverty without growth, and there's no growth without reform.

How did your industry get a boost?

This building you are in was built 20 years ago. It took me 8 to 10 years to get the necessary state approvals. But once it came up, it became a benchmark, and others followed. This is now a growing market in India, and there is quite a lot of talk about urban renewal. Even the Prime Minister talks about it.

The state is inviting the private sector to partner with it on bridges, water supply, drainage, transport, after four decades of neglect. Now the pressure for urban renewal will become massive. It's a Herculean task to upgrade these. That's why it's a massive opportunity for companies like DLF.

What was the toughest part of building your company, land acquisition?

I did it all a long time ago. I was young and hungry for business. We've now assembled 3,000 acres near Delhi. I had two things in my favor: One, I was trained by my father-in-law who was the founder of the company, and two, when I first came to Delhi from my homeland Bulandshahar [in Uttar Pradesh, 50 miles away from Delhi] which was a rural area, I knew how to talk the language of the farmer.

In order to get on with people, you have to know the system and the families. It's a long drawn-out affair. If you had to get their rent, you had to deal with them and be at their weddings etc. I used to get up at 5 or 6 a.m., before the farmer left home, or meet them in the evening after 6 or 7 p.m., after the sun went down, seven days a week. It was an obsession with me to be with those families, eat with them, talk to them. I got land from them, bought it out, and paid them on credit—my own.

Who are your mentors?

My biggest mentors are both American. The first was George Hoddy of American Electrical. He started his company in a garage in Philadelphia. I leaned on him to get the big picture, to understand the signposts. Think big, act big. He taught me "negative analysis"—first find out where you can go wrong, and identify the steps to avoid that.

And there was Jack Welch. I got him into India because GE was not known in India and Pakistan. I pressed upon him to come. Rajiv Gandhi, who was a high-tech guy, had admiration for Jack. India was a closed economy and I became GE's national adviser. Then I was on their international advisory board for 10 years. It shaped GE, and I became very close to Jack.

When he came, Jack said, "The problem with India is that you have lots of intellectuals and you don't know how to take care of them." He wanted to start with an experiment and began work in India with 10 people in 1986. Then it grew, other companies followed, and outsourcing began. Today GE is one of DLF's largest clients. Jack had confidence in India. From Jack I learned about the productivity mantra—how to be precise and how to take the meat off the bone.

What's your primary worry now?

Worry doesn't settle in my system easily. It's not in my vocabulary! But what makes me happy is that at last real estate has become a genuine and massive industry. I am an optimist but a realist because I know how I can go wrong.


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