The outgoing head of the Tata business empire warned yesterday that a lack of government support was preventing Indian industry from competing with China and lashed out at a “venal” business environment.
In interviews published ahead of his retirement as chairman this month, Ratan Tata criticized what he called a lack of coherence in government policy and said the Mumbai-based group’s ethical standards had cost it business.
Tata, a sprawling conglomerate whose portfolio ranges from salt to software, has earned itself a global reputation for its eye-catching purchases of Western companies such as Jaguar Land Rover and Corus Steel.
Tata told the Financial Times that his group planned to look to other emerging markets for expansion and accused Indian Prime Minister Manmohan Singh of forcing it to look abroad by failing to address complaints about bureaucracy.
Singh’s government is currently steering a series of economic reforms through parliament which aim to open up sectors such as supermarkets, insurance and aviation.
However, Tata, whose global sales total US$100.9 billion, said investors were being deterred from India and complained that it still took the best part of a decade to gain clearance for major projects.
“Different agencies in the government have almost contradictory interpretations of the law, or interpretations of what should be done,” he told the London-based newspaper.
“These are things which by and large would drive investors away in most other countries,” he added.
Tata contrasted the Indian government’s attitude towards its industrial sector with that of its counterpart China where Tata recently opened a Jaguar Land Rover factory.
“There’s a great, marked difference [in] government support,” he said. “If we had the same kind of encouragement to industry ... I think India could compete definitely with China,” he said.
In a separate interview published in the Mumbai-based DNA newspaper, Tata said his successor Cyrus Mistry would face a major struggle not to compromise the group’s ethical standards.
“They [Mistry and his fellow executives] will have to make decisions and, when they do this, they will be constantly faced with the question: Do you compromise, do you give in?” said Tata, who stands down on Dec. 28 when he turns 75.
“You can call it by another name, but in playing this game of appeasing or surrendering to a venal system, the soft option, the easy way out is a compromise,” he said.
Tata was the driving force behind the creation of the Nano, billed as the world’s cheapest car when it launched in 2008.
However, with annual sales lagging below the 100,000 mark, Tata said there should be a rethink on how it is marketed.