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Tough Questions Patanjali Ayurved Needs to Answer

Baba Ramdev says his company will overtake FMCG giant Hindustan Unilever. His days of challenging multinational companies with ayurveda and ‘Indian knowledge’ are gone.

Representational use only.

Recently, Yoga-Ayurveda guru Baba Ramdev said that his Patanjali Ayurved, which recently acquired Ruchi Soya, will soon overtake market leader Hindustan Unilever in the Fast Moving Consumer Goods (FMCG) space. The portfolio of Patanjali, he said, is so extensive as to leave no doubt he can achieve this goal. Patanjali’s revenues, including Ruchi Soya, were Rs. 30,000 crore in 2020-21. Hindustan Lever’s revenue is around Rs. 45,000 crore. According to Ramdev, the product portfolio of Ruchi Soya has a market size of Rs. 5 lakh crore. True to style, he said his ventures do not “walk” but “run”, and he aims to create a global FMCG brand.

It has been quite a journey for Baba Ramdev, whose popularity was initial predicated on challenging multinational companies. His baba status and commercial clout are intertwined, even though he does not occupy a formal position in his empire. His close associate, Acharya Balakrishna, holds the position of chairman and owns over 90% of Patanjali. Estimates of his net worth may vary, but Ramdev alone brings star value to the Patanjali brand. He has now said he will train sanyasis, some of whom will occupy posts in the company, a typically Ramdev idea. One wonders if these saffron executives will be trained in marketing alone or also in accounting. For, there are several surprises in Patanjali’s performance, starting with its revenue, which grew over 100 times from around Rs. 100 crore in 2010-11 to over Rs. 10,000 crore in 2016-17.

Debt-ridden Ruchi Soya owed more than Rs. 12,000 crore to banks and was under the scanner for market rigging. Patanjali acquired it entirely with borrowings from the public-sector banks Ruchi owed money to. Ruchi’s debt (to the tune of Rs. 2,200) was also written off by the banks, and it faced insolvency proceedings. Yet, according to news reports, “Indian banks didn’t just fund Patanjali’s acquisition, they even funded its equity contribution to a large extent.” Inexplicably, the troubles of Ruchi vanished after the acquisition, and its share prices leapt higher than Olympians can. It jumped 65% in just one month this summer after an announcement related to entering the “healthy foods” segment. Ruchi Soya ended the last financial year with an income of around Rs. 16,300 crore, which pushed Patanjali over Rs. 30,000 crore—an over 300 fold rise since 2010-11. It posted a net loss of Rs. 41.24 crore in the quarter ending in March 2020 and a profit of Rs. 314.33 crore in the same quarter a year later.

If you find this odd, Ramdev’s innumerable supporters will call you an agent of multinational companies, never mind that their guru is on the same path. It is Ramdev’s one-time ally Rajiv Dixit, who died in mysterious circumstances, who campaigned against multinational companies. He never tried to integrate business with asceticism, unlike Ramdev and associates, who face many questions about their present and past.

There are numerous cases against them and Patanjali related to land grab (in Haryana, Uttarakhand), fraud, and charges that the authorities mete out favourable treatment and concessions to them, such as this allegation from Assam. Often, public money and assets are involved, so only a thorough scrutiny can make the facts clear.

Worldwide, nobody takes the claims of health, nutrition, “wellness”, and personal care companies at face value any longer. So, allegations against Patanjali that it sold poor quality amla juice that army canteens refused to accept, or marketed “divya putrajeevak” to illegally “assure” a male child, released pollutants into rivers, or sells unhealthy snacks such as instant noodles, need probing. There are also allegations against close associates and family members of Ramdev that they used unfair means, threats and violence to suppress the grievances of employees and those who live near its manufacturing plants.

The Indian Medical Association threatened to sue Baba Ramdev for false statements against allopathic medicine and doctors. His misrepresentation of Coronil as a Covid-19 cure got widely criticised, and he had to take back the claim despite Ramdev’s enormous political clout. Justice CV Karthikeyan stated in the Madras High Court while imposing a Rs. 10 lakh trademark violation penalty for use of the brand name Coronil, “Patanjali has been chasing further profits by exploiting the fear and panic among the general public by projecting a cure for coronavirus when the ‘Coronil’ tablet is not a cure but rather an immunity booster.”

The concept of seeking nirvana in the balance sheets or marrying spirituality with narrow corporate goals such as capturing market share insults spirituality. The success of the Patanjali business empire is based on stoking endless consumerism, precisely the reverse of spirituality. Even the yoga Ramdev propagates is an ‘instant noodle’ version of it. India already had the more rational option in Khadi, which challenged capitalism and protected sustainable livelihoods. Patanjali and others periodically attempt to usurp the Khadi space without respecting or understanding what it represents.

A grassroots movement for healthy and nutritious products would involve sustained hard work. Natural farming, organic orchards, protecting natural forests and regeneration of degraded forests is no easy task. To ensure a sustained supply of healthier staple foods is a long-term objective that cannot be left to corporates. To dominate the supply chain for hastily assembled consumer products requires neither commitment to quality nor efforts for sustainability. Processed foods that contain palm oil and hydrogenated oil get manufactured based on global terms of trade, which is dominated by multinationals. It will invariably come at the cost of nutritious oilseeds, including groundnut, mustard, sesame and coconut, other than local varieties as well as extraction methods.

Ramdev is thus a symbol of the shrewd pursuit of aggressive business tactics and self-interest and not healthy living. He has risen in this narrow goal of expanding his empire, but the record is peppered with question marks. Most of all, the man who started his journey to provide alternatives to the existing corporate world has ended up emulating that model, all in the name of tradition.

The writer is a journalist, author and honorary convener of the Campaign to Save the Earth Now. His recent books include Man Over Machine and When the Two Streams Met. The views are personal.

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