Sanjay Gandhi was a most horrible guy. He behaved more like a King than the. PMs son. Rules were broken for his sake left and right. Had the horrible man lived on he would have made India into an autocracy no doubt. In his life, the saga of Maruti makes the man completely revealed to you. See how casually he pushed aside the law and did whatever he wanted....
At the time of Emergency we were students and were more interested in other things than politics, so we never knew all these things. Now when we read this we shiver how the system was fully compromised by this spoilt brat.
In India, there was an idea in the 1950’s to produce low priced cars. It was first conceived by Manubhai Shah.
Later, the Government itself took up the project but due to the strong opposition from TT Krishnamachari no decision was taken.
The Mysore Industrial development Corporation estimated that it would cost Rs 5000 to 6000 to produce their prototype on a commercial scale. There were then 2 different schools of thought for this project.
One said it should be manufactured in collaboration with foreign car manufacturers, while the other said it should be manufactured with indigenous resources.
When this debate was going on, Sanjay Gandhi arrived on the scene.
He first joined Rolls Royce as a mechanic at Crewe in the UK, no doubt recommended by his mother. He dropped out of the training in between and arrived in India.
For obvious reasons Sanjay got the license. Sanjay produced one prototype first in a backyard garage in Delhi. Immediately a letter of intent was issued to him.
Finally despite the huge criticism of the prototype a license was issued to Maruthi Ltd. to produce 50,000 cars annually. Sanjay’s shareholding in the company amounted 1 share of Rs 100, yet he was the Managing Director.
The 2 conditions stipulated in the letter of intent were 1. That the car should be produced entirely from local sources and 2. It should be low priced. Of course later Maruthi never fulfilled both these conditions.
With the license in hand he went around acquiring land and finance. He was the son of the PM, so obviously neither was difficult to obtain.
Willing businessmen funded his venture while Bansilal, the then CM of Haryana and a big chamcha of the family, Bansilal stepped in for the land. He took away 445 acres of fertile agricultural land on the Delhi Gurgaon highway evicting the inhabitants of 3 villages.
They were paid Rs 10000 an acre while the market rate was Rs 35,000. The site also violated the rule that no factory should be built within 1000 mtrs of any defence installation, as it was located right next to an army ammunition dump.
Since the beginning, the project was a horrible failure. The first prototype was junked, the second turned turtle on its test run, and the subsequent ones developed snags ranging from faults with the steering, suspension and also overheating.
Sanjay then abandoned the conditions of the LOI and resorted to use of imported equipment. Even after that Maruti failed to produce a roadworthy model, proving that Sanjay was a dunce who headed the Company only because he was the PM’s son.
The project slowed and staggered along. Sanjay said in Dec 1973 that a model would be ready in 6 months. He repeated the same thing in June 1974 and said that by 1977 the plant would run at optimum capacity and start producing 200 cars per day.
By that time Maruti slowly sunk into deep debt. Then Sanjay turned to Public Financial Institutions.
Due to his mother nationalised banks extended unsecured loans to Maruti with Central Bank of India & the Punjab National Bank each loaned him Rs 75 lacs. In 1976 that was a big amount.
Finally the RBI was compelled to intervene regarding further loans to the company which of course led to a clash of Sanjay Gandhi with the RBI.
After the Emergency was imposed Sanjay shot into the forefront of politics and he directed his ire towards those officials who had dragged their feet in financing him.
Dr Taneja, the Chairman of the Central Bank was sacked. Then Dr Hazari, the Dy Governor of RBI was also similarly replaced by a relatively junior officer from the Income tax Department.
The Governor of RBI S Jagannathan was retired and was succeeded by KR Puri, former Chairman of the LIC.
8 months before Maruti was started Sanjay set up Maruti Technical Services Pvt. Ltd. (MTS) It had a paid up capital of Rs 2.15 lacs of which Sanjays share was Rs 1,15,000 and of the rest 1,00,000 was that of Rajiv and family. As per agreement MTS would receive 2% of the sales by Maruti, subject to a minimum of Rs 2,50,000 per annum.
Another subsidiary of Maruti Ltd. was Maruti Heavy Works Ltd.(MHW) in which MTS held 59% of the shareholding and the Gandhi family another 9%. MTS is of course their technical consultant.
These 2 companies were ill equipped and were staffed by ignoramuses. But Sanjay being what he was the companies were overwhelmed with orders.
When the legality of these companies were questioned in the Parliament in 1975, and Krishnaswamy, the Minister for Industrial development questioned the PEC and STC about the issue as Maruti acquired its equipment from these 2 companies, the Directors of both the PEC and STC were summoned by the PMs office and were reprimanded. Two officials entrusted with the investigation were suspended.
Krishnaswamy’s residence was raided where 2 bottles of liquor were found and he was suspended for violating the excise rules.
A contract from ONGC was allotted to Maruti Heavy Vehicles contravening the regulations.
When emergency arrived then Maruti undertakings went on to high gear.
Suddenly the demand for road rollers supposedly heated up and BRO ordered for 100, Haryana state 50, Punjab for 40 and UP for an undetermined number with MHV.
The price MHV charged was Rs 1,40,000 per roller which was then 40% higher than all other manufacturers in India.
MHV did not have the equipment or the expertise to make road rollers.
They sold the rollers fitted with 2nd hand engines of foreign manufacturers which they bought at Rs 2000 apiece.
MHV also started building bus bodies. Again the state governments inundated them with orders despite them not having any experience in that line.
The state governments fell head over heels to order the bodies at much higher rate. By the end of the Emergency they placed orders for over 1100 bus bodies.
During and after the Emergency Maruti’s involvement with MNC’s bloomed. Maruti became th agents for International Harvester & Piper Co of the US, the Man Co & Demag co of West Germany and of course of Snam Progetti of Italy.
Besides them, Maruti was also agents for supply of Chemicals, pumping engines, bulldozers and telephone cables.
Sanjay Gandhi also forced the Delhi Water Supply to utilize a water purifier named Quick Floc Polymix instead of alum for treating water.
When some Engineers of the Corporation expressed their reservations on the product they were suspended. That product was banned as being toxic in the US but that did not deter Sanjay Gandhi at all from pushing it.
Maruti was getting between 20 to 25% commission on all products for all the above MNC’s, so it was a very lucrative empire built using the power of his mother and strong arm tactics.
A contract between Indian Tube Company, a PSU and British Steel was revoked and British Steel had to appoint Maruti Heavy Vehicles as its agent to get the contract back.
The ONGC was compelled to place an order for 24 heavy trucks to be supplied by International Harvester and Mann of Germany.
The Maruti tender was twice as high as its competitor yet it got it.
An expansion tender for the Trombay Phulpur plants was given to Snam Progetti for which Maruti got a commission of Rs 2.50 crores in foreign exchange.
As an agent for Piper Aircraft Maruti secured orders for 19 Piper Planes. Each plane gave Maruti a commission of Rs 500,000.
Sanjay created another Company, The Maruti Aviation Company. Sanjay wanted to set up an airline and made a bid to acquire the premises of Safdarjung Airport.
He ordered the Indian Airlines to vacate all hangars and also to park their fleet of buses, station wagons and cars at DTC depot at Indrapratha Estate.
He wanted to put up the workshops of Maruti Aviation at Safdarjung Airport. Luckily the end of Emergency put an end to this scheme.
As Maruti was making good money out of commissions, the scheme of making a small car was totally abandoned.
By now Maruti was floundering in debt despite its associates MTS and MHV making piles of money . It had accumulated a loss of Rs 2.3 crores (In 1975) which was almost equal to its paid up capital.
However, Maruti Heavy Vehicles and MTS made good profits which obviously was siphoned off by Sanjay.
This guy went about like a bull in a China shop and nothing could stop him.....a failed mechanic catapulted on to the throne with absolute powers. I wonder what would have happened to India had he lived on.
