ASIAN VOICES is an interview and debate program hosted by NHK senior commentator Aiko Doden. We discuss key international issues from an Asian perspective, together with experts.
Aug. 21, Thu.*This program was first broadcast on Jul. 31
(Chairman Emeritus, Tata Sons)
For 22 years, Ratan Tata served as chairman of the Tata Group, India's largest conglomerate. In 2008, he garnered attention by developing the Nano, the world's lowest-price car. He also acquired luxury car brands and steelmakers, developing the group into an enormous conglomerate encompassing nearly 100 companies. 2 years ago, he stepped down as chairman to become chairman emeritus. He now works on projects such as providing needy people with healthcare services and education, and he retains much influence in the Indian business world. In this episode, we interview Tata to hear about his expectations for the economic policies of new Prime Minister Narendra Modi - and how he plans to change India by coming to the aid of people in need.
Today's Asian Voices comes to you from Mumbai, India, to speak to a man who has worked for many years to drive the country's economic growth.
As one of the BRICS countries, India has had a major impact on the global economy. But in recent years, it has experienced a slow-down.
The people elected economic reformer Narendra Modi by a landslide in the last general election, and he's vowed to turn things around.
We spoke with Ratan Tata, the former head of India's largest conglomerate. The Tata Group is considered a major driver of the national economy.
Tata guided the group through rapid expansion, turning it into a global force.
He also oversaw flagship projects such as the development of the world's lowest-price car, the Tata Nano.
He stepped down as chairman two years ago, and now oversees educational and healthcare projects for needy people, but he continues to have great influence.
Mr. Tata: "So there are many, many issues. But again, as we said, 'Can we solve them?' Yes. I'd say we should undertake to solve them and not to say the country to solve."
We ask him what it'll take to revitalize the Indian economy.
No, I don't have more time for myself, but it's not that life is not treating me better. I'm enjoying what I'm doing, but I've been busy in a different area from where I was earlier.
But, I remember you telling me before that there were a few things that you might want to take up once you fully retire, for example brushing up your piano-playing skills.
Oddly enough, the first occasion I've had to have someone come talk to me about teaching me piano is coming tomorrow. So, until now, I've been not able to pursue them, but, they are still very much on my list of priorities.
So, perhaps the next time we come over to Mumbai, you might be able to play us a tune.
Maybe, or hide my head in shame...
The Tata Group has its roots in a textile trading company that Tata's forefathers established in the middle of the 19th century.
After Ratan Tata became the fifth chairman in 1991, the Group grew rapidly.
Tata acquired global companies and expanded his business.
In 2007, he acquired major European steel maker Corus Group.
In 2008, the British luxury auto brands Jaguar and Land Rover also became part of the Group.
The Group also expanded its tea business. Tata products are now an indispensable part of Indian life.
Tata built up the Group into India's largest conglomerate, encompassing more than one hundred operating companies.
In 2008, the Group unveiled the Nano, which cost a mere 2,000 US dollars, the lowest priced car at the time.
The truth is I became chairman about the same time as when India opened up its economy. Although part of the business community was spending its energy trying to make sure protection continued, we in the Tata Group used the opening up of India to grow. We forged joint ventures, we adopted the new economic policy of open policy, and looked at new areas we could enter which previously we were not able to enter. If I could say two or three things that have driven the growth, one is being bold in the decisions we have taken and two is thinking big, rather than small increments. These have been the two things that we have done. We have shown outside India that an Indian company shouldn't be looked at as being inferior to a western company. They could handle an acquisition in that geographic area, and be able to survive and fight in the marketplace.
We have been very much a household brand for many years. There, we hopefully retained the slogan we have gained, which is a brand that has the trust of the people. There's a general feeling that if it is a Tata brand, they will get a fair deal as a customer. It is something we should be very careful to retain, because if you've lost that, then you've lost everything.
Trust, surprisingly, can erode so fast.
I kept seeing people on motorcycles or on scooters with whole families, the small child standing in front, a father driving the motorbike, his wife sitting with another child in the back. And I kept thinking that this is so dangerous if somebody hits this scooter, or if it slips or slides in bad weather. The whole family is on the road and maybe gets run over by another car, gets hit in the night, or has to travel in the rain. Can we devise an affordable family car that would not cost much more than a motorbike, but would give the whole family an all-weather car that has everything including air-conditioning? The car was devised as moving up from the two-wheeler to the four-wheeler, with the family transport in a full-fledged car. That was the concept, and I think that the engineers that were able to do so are the real heroes of that exercise because everyone said that couldn't be done. That is how it got conceived.
It was Tata himself who conceived the low price car Nano. But sales are stalling, and the Group produced only 20,000 cars last year, more than a 50% drop from the previous year.
It does say something about the state of the Indian economy and the sentiment among the people, doesn't it? They are the market where the customers are becoming more choosy and demanding...
Absolutely, they are more discerning and more keen not to be seen as wearing tattered clothes or being poor. They have aspirations and that's a wonderful thing because that's what makes a country grow. What makes a country innovative is the spirit of the people. If you have no spirit then you are resigning yourself to staying as you are.
Oh, yes. I think that it hasn't sold well because we haven't tapped the right nerve, but the fact that India has a spirit is a great thing because when we think of the power of the people who want to improve, want to choose, want to be discerning, want to look good, want to dress well, and want to have a home, these are all opportunities for India as a country and for investment in India.
Beginning in 2005, the Indian economy maintained a growth rate of over eight percent. But with the recent economic slowdown, the rate has dropped to four percent over the last two years, the lowest in the past decade.
The opposition Bharatiya Janata Party won a landslide victory in the Indian general election last May with its vow to rebuild the economy. It became the first single party in 30 years to win a majority of seats in parliament.
Narendra Modi became India's new Prime Minister.
Modi served as Chief Minister of the state of Gujarat for 13 years. During this time, he actively wooed foreign investors.
Modi also improved Gujarat's infrastructure, setting up Asia's largest solar power generating facility. This helped Gujarat's economy grow at an annual rate of 10%.
In Gujarat, where Modi had worked to develop industries, the Tata Group built an automobile factory.
I think the economy has been slowing down for about two years without any doubt. I think the change of government, the new enthusiasm, and the new approaches being made in terms of growth will succeed. The economy is already in the sentiment, showing signs that the stock exchange is up. I think new investment will come as the country opens up, which I'm sure it will. New investment will come in and investors will be attracted to India. I feel very hopeful that the country will be on a growth path once again.
The new prime minister has just been sworn in. What makes you so confident and optimistic that the sentiment is already back?
I have had the occasion to interact with Mr. Modi when he was Chief Minister of Gujarat. At the time, we moved our Nano-car project to Gujarat. It was just a sheer pleasure to deal with him because everything he promised, he did. What he couldn't do, he told you upfront, "I cannot do this." He was very accessible and very adaptable to anything that made sense. I think it is the same Mr. Modi dealing with the country, who is likely to be full of ideas in terms of how to make the country grow. He is very business friendly. He understands very fast what you're trying to say, and he does what he feels. When he says he's in favor of something, he'll do it.
He is said to be a can-do administrator.
That is right, that is right.
What's meant by that?
Instead of saying what he cannot do and why something cannot be done, he is more of the attitude of saying, "Yes, why don't we do it? Why don't we try it?"
I see. So you think that he can bring about the difference to India's economy.
I really believe so. It's very early days. He has a big country and a tough economic situation to deal with, but I think he will succeed, I am very sure he will succeed.
I would say that that is a very valid view because Mr. Modi hasn't run a country before, but at the same time, Mr. Modi gained a majority in parliament. It is no longer a coalition government that has to depend on the views of his allies, etc., so he can make his policy and carry them through because he has the majority. He's not in fear of losing his position. That makes a big difference in terms of his being able to carry the Gujarat model on a larger scale.
Because he will not be hostage to a coalition.
That's right. That's right.
Meaning he would be more willing to take risks, perhaps at some point?
As any leader always weighs risks against not doing something, he may indeed need to be taking some risks and there may well be areas where some of his policies don't work out the way he had hoped. But, we all have situations where we run into problems, and how we deal with them is as important as the policy we make. Some of his early actions showed that he's also concerned about India making overtures with our neighbors and creating much better relationships with our neighbors including Pakistan- to create a conglomeration of nations that will have trade agreements and ease up on travel between themselves. So, I think he's looking beyond just profits or successes within India and wants to make the move to have India recreate relationships with countries like Nepal, Bhutan, and Pakistan into making the area a stronger economic zone. That is terrific because that's the first time in a long time that is being thought about.
Two years ago, Tata stepped down as Chairman of the Group. He now devotes himself to projects that improve social welfare and education.
Tata Trust, which is endorsed by the Group, manages philanthropic projects that help Indian people. The Trust provides various kinds of support for both Indian and foreign advocacy groups.
The Trust meets with a British international development group to discuss mother and child health care in India.
British development group Staff: "These are shifts in cultural norms and social norms which take years to achieve. You can achieve a shift in breast feeding practices in two years. But today we are able to know that you've made an impact, you would need to track your data for about..."
Tata Trust Staff: "You will end up putting up toilets, for not address issues of child sex selection..."
Tata is focusing on projects to help rural villages that have a high proportion of people in need.
Most of the 400 students at this school in Maharashtra are minority students from low-income families.
Teacher 1: "Please ask any questions you have."
Student 1: "Will a short in the electrical circuit break all the LED lights?"
With the support of the Tata Trust, these students aged 13 and over are learning work-related skills.
Teacher 1: "You can work with this skill."
The class teaches students a range of skills including repairing electrical appliances or baking sweets.
Last year, with the help of the Tata Trust, 500,000 Indian students learned these skills.
Teacher 2: "Is it crispy?"
Student 2: "It's sweet."
Student 3: "It's really tasty!"
There is absolutely that reality. There is a great disparity of incomes. There is a great lack of infrastructure. There has been a real case of malnutrition because the right kinds of food are not available and not enough. There is the rural indebtedness, which is adding to the problem. There are many problems that need to be resolved. It is not a glowing situation. We have to generate prosperity in the country, in many of the rural areas that there need to be. We have a new emerging problem of urban poverty- people moving to urban areas and not being able to find work. So, there are many, many issues, but as we said, "Can we solve them?", yes. I'd say we should undertake to solve them and not to say to the country to solve them.
What are some of the areas that you would like to focus in your Tata Trust's activities?
The issue of general health and nutrition, particularly amongst children and pregnant mothers, is where much more can be done. We have a lot of deformity and deaths amongst the infants from weakness and lack of nutrition, which the government is spending a lot of money on, but is not necessarily reaching the people. So that is one of the areas.
They are the future of the country. Education is another area that I feel the Indian citizen demands rightly and doesn't necessarily have access to. That is something else we have to do as a challenge.
What difference do you think Tata Trust can make in that respect then?
We may not make a difference for the nation, but again, India is a very diverse country. I don't think that there is any one size that fits all. My view over the years has been to pick any area and showcase that area in terms of what you can do and hope that it can be replicated, either by the government, other private people, or a mogul, and take it all over India.
So start from where you can in that sense?
Yes, do it in the controlled area, make a difference and show that difference. That area could be a district, village, or a town. Showcase the difference that you can make.
I think it has the potential of being one of the major powers in the region. I don't know about being a superpower, but it could be a very prosperous country in the region economically. It has had stability.
What role do you think you shall have played in the history of India?
The India of tomorrow that one would hope for is the India where every Indian has equal opportunity and has the same law applied to-not one law applying to you and another law applying to me because my name is something that is considered to be more important than you, I am richer than you, or you are richer than me or more influential. The same law should apply to all people, big or small, with the smaller person having the comfort of knowing that he would get justice. Not only if you are rich or only if you are well connected will you get justice, and he will not. India has to be a place where every citizen feels as if he has the same rights and the same protection as the next Indian, and not being privileged or disadvantaged as the case might be. So they have the same rights to educational institutions to various benefits as others do. This is something that we have to look as the important issue.
You are still very much active in terms of bringing about the better life for Indian people.
That is being an Indian citizen. I would hope that everybody would be working towards trying to create a better life for India. I think these are all issues of national pride. I share that pride and I would like to see India as an economic power. I would like to see India as a place that people like to visit and to live.
I am sure that you will be kept as busy as ever. So in that respect, not fully retired at all.
No, I'm retired, but busy with other things.
I will find the time to do that. My promise to you is that somewhere in the future I can play for you.
Thank you very much, sir.
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