I'm a Master in India

Chapter 271: Patronage Network

India has no legal restrictions on political donations; it is a completely blank slate.

During elections, politicians from various parties talk extensively about corruption and cronyism, but they meticulously avoid discussing political donations, as if everyone has suddenly become deaf and blind.

No one touches this topic, and apart from a few social commentators grumbling, the entire India tacitly accepts the legitimacy of this practice.

The reason is simple: elections cost money.

Developed Western countries can raise election funds through public crowdfunding.

Try raising money in India? Most people here are poor, they can't even afford to eat, let alone crowdfund?

The reason the poor actively vote is that they hope the elected party will give them benefits.

Asking them to pay to support a party is absolutely impossible and unrealistic.

The poor truly have very few rupees in their pockets; that's their entire life savings. Who would be willing to go bankrupt to support a political party?

The problem ultimately comes back to funding. Politicians can only get money from businessmen to participate in elections. They might even have to pay the poor to get their votes.

Even the Indian People's Party, with its more radical political agenda, cannot do without money. Both Advani and Modi understand this very well.

Local businessmen like Adani are one avenue, and there's no reason to let outsiders like Ron go.

Those lands and mines have been lying there for hundreds, even thousands, of years. When no one was interested, they were worthless.

Now someone needs them, and it coincides with an election, so exchanging them for some money is perfect.

To be honest, after several days of interaction, Advani and Modi had a good impression of Ron.

He wasn't a cunning businessman full of lies, and Sur Electrical Appliances was a genuine brand.

There's no reason to turn away someone so reliable who can also provide a substantial political donation.

This was ten million rupees. The Indian People's Party hadn't even been elected yet, and local businessmen like Adani didn't have such courage.

Advani valued Ron highly, and he intended to maintain this relationship.

Because campaigning is only part of the expense; whether it's establishing a patronage network or cultivating more candidates, large sums of money are needed.

As Party Leader, Advani considered not only winning the election but also maintaining his position long-term after coming to power.

This requires the maintenance of interests, which is the so-called patronage network, composed of three parties: the poor, politicians, and businessmen.

India is very poor, and the quality of public services is worrying. Social welfare programs for the poor are very ineffective.

Public schools and hospitals have become nominal, and the state cannot even guarantee the most basic utilities like water and electricity for the working class.

At this time, politicians seize the opportunity. The poor cannot afford the public services they desire, but they possess the voting rights that politicians want.

So, during elections, politicians promise various benefits. The poor vote for politicians, and after being elected, politicians provide them with government jobs, distribute relief funds, or directly give them money.

However, the campaign funds politicians need to do all this can only be afforded by wealthy businessmen.

Of course, the businessmen's money isn't given for free; they will obtain public resources or contracting agreements from politicians at favorable prices.

A chain of interests is formed: voters receive benefits and continue to vote for politicians, politicians are re-elected, and voters turn a blind eye to the dealings between politicians and businessmen.

This is the patronage network, a tacit understanding formed among the poor, politicians, and businessmen.

So, is this kind of operation considered corruption? Is it cronyism?

It's hard to say, because the poor do indeed receive benefits, and their lives improve a little.

At the same time, for public infrastructure, politicians will also ask businessmen to provide resources to support it.

For example, Advani requested Sur Electrical Appliances to invest a quarter of its profits back into the development of Gujarat.

Even if Ron invests this money in other businesses, it will indirectly provide employment opportunities.

From the results, this interest network, which clearly does not conform to just procedures, has actually done good deeds.

Contradictory, very contradictory.

Of course, the premise of good results is that the politicians and businessmen in the patronage network genuinely have a conscience.

From the perspective of agency, they are in a strong position, and the poor cannot impose strong constraints on them.

If politicians are greedy or businessmen are cunning, then the patronage network will produce completely different results.

This is India's electoral politics; it is pathological and contradictory, and the law is powerless against it.

Furthermore, once a positive cycle of the patronage network is formed, meaning politicians and businessmen do have some conscience,

then this cronyism closed loop will self-reinforce: the closer the relationship, the richer the businessmen, the easier it is for politicians to get political donations, and the poor will ultimately also receive the dividends of development.

The Indian People's Party is currently taking this path in Gujarat, and Ron is their ideal wealthy businessman.

Once this cooperation is successful, then other people in the patronage network will consciously safeguard Ron's interests in the future.

The closed loop will thus be formed and become increasingly stable.

Yes, this is why Ron was willing to spend ten million rupees to support the Indian People's Party's election campaign.

He knew that for a long time in the future, Gujarat would be ruled by them.

Typically, the businessmen in a patronage network are mostly locals; their own people are more trustworthy.

The reason Ron can enter now, besides the unknown outcome of the general election, is that his reputation is also a very important factor.

Dr. Sur is a good person, who doesn't know that?

The longer a rumor circulates, the more deeply it takes root.

Moreover, Sur Electrical Appliances has already made a name for itself; not only is it good quality and affordable, but it's also genuine domestic product.

After both sides reached an agreement, Ron did not leave Gujarat immediately.

In the following days, he began to accept some interviews, such as for newspapers, magazines, or television programs.

Since the government completely relaxed policies in 1991, Gujarat has also established its own television and broadcasting companies.

Ron's appearance in the media was nothing more than to say a few good words for the Indian People's Party.

This was a condition agreed upon by both parties; with the general election approaching, all means of propaganda had to be utilized.

Of course, the words couldn't be too definitive. For example, regarding the construction of the Sur Electrical Appliances factory, it was only stated that it was still in the investigation phase, but that discussions with Advani had been very pleasant.

This was enough to send a signal to the outside world, stopping just short of a full announcement.

Because of these matters, Ron stayed in Gujarat for over half a month in total.

By the time he returned to Mumbai, it was already December.

He had to come back; Sur Electrical Appliances had new products.

The 18-inch production line, transported from East University two months prior, had already begun assembly, and after debugging, stock was prepared for a month.

Now, everyone at Sur Electrical Appliances is very confident, even daring to stock large quantities of 18-inch televisions, which are slightly more expensive.

A very important reason for this is that East University's goods are truly cheap.

"Boss, after market research, we plan to price the 18-inch television at 6,000 rupees, still following your low-price strategy."

"It's 5,999 rupees," Ron corrected him.

"Yes, yes, yes, still you're the best, Boss!"

"How are the costs?"

"2,100 rupees, mainly concentrated in the picture tube part."

"Not bad, more profitable than the 14-inch."

According to market rules, the higher the price of electronic products, the more profit there is.

For this 18-inch television, Sur Electrical Appliances makes about 2,400 rupees per unit sold.

Very considerable. If the sales volume keeps up, it's more promising than the 14-inch.

"Where are the televisions?"

"Here!"

Ashish obsequiously brought over the latest 18-inch television.

It must be said, having been accustomed to 14-inch, there was nothing wrong with it.

But putting the two sizes together, the difference immediately became apparent.

Big has its own beauty; human aesthetic pursuit is just this simple and unadorned.

"This generation has made some improvements, Boss. Do you see how much flatter the screen is than before?" Ashish pointed to the television.

"Is this a flat-screen TV?"

"Boss, you really know your stuff! They say it's a technological update; the electron gun is shorter, so the screen can be made flatter."

"Good. Is the picture tube production line sorted out yet?" This was another key concern for Ron.

"The glass tube molding furnace and vacuum exhaust system are a bit tricky, but there will definitely be no problem next year. The East University people are working on it; they're fast."

"This matter is more important than the assembly line. Meet their conditions as much as possible."

"Yes, Boss." Ashish nodded in agreement.

The picture tube is a core component. If Sur Electrical Appliances can produce it, they won't have to worry about being stifled in the future.

This is a crucial step towards self-reliance, and Ron is willing to spend more money if necessary.

The pricing of the 18-inch television is still nuclear-level for competitors; it's even cheaper than their 14-inch products.

How can they compete with this kind of strategy?

Ron didn't care; he just wanted to capture more of the market.

When the market fully opens up in the future, there will be even more brutal price wars to fight.

After examining the 18-inch black and white television, Ron went to the NEC color TV production line.

Yes, there were two new products, and the joint venture company's 18-inch color TVs also began mass production.

Xiao Tian had been impatient for a long time; he was eager to enter the Indian market.

It must be said that in this era, the Japanese technology indeed had some tricks up its sleeve.

The clarity and colors, compared to black and white televisions, were a qualitative leap.

"Mr. Sur, how is it?" Xiao Tian proudly fiddled with the remote control in his hand.

This was high-end stuff; the old mechanical knobs and such were all gone.

The television's bezel was very narrow, visually enlarging the screen.

"Very good." Ron sighed; there was still a gap.

"We believe pricing it at 22,000 rupees is reasonable."

"18,000 rupees."

"What?" Xiao Tian became anxious. "Mr. Sur, didn't you say color TVs are a luxury in India? If so, we don't need to go the low-price route."

"More than 20,000 rupees? That's already comparable to imported goods. Tell me, what's their reason for buying a joint venture product?"

"But the technology is the same."

"Indians don't think that way. The potential consumers of color TVs are all educated. They believe foreign workers are more reliable, even if all the technology and materials are the same."

"Why?" Xiao Tian was puzzled.

"Because the moon is rounder abroad."

"Nani?"

"It's settled then." Ron waved his hand; he was the major shareholder of the joint venture company.

As the year-end approached, he still had many meetings to attend, such as expanding Sur Electrical Appliances' product line.

Ron and his team were now targeting juicers and rice cookers, products with great potential in India.

Because Indians love to juice fruits, and the South Asian subcontinent is rich in fruits.

Rice too; Indian basmati rice is famous internationally.

Choosing these two products was entirely based on local conditions.

However, before deciding which company's technology to introduce, overwhelming news suddenly broke out from outside.

On January 1, 1995, India was about to join the World Trade Organization.