Remove some controls, India will reach its true potential
Ratan Tata speaks to Pritish Nandy in his office in Mumbai, from where he leads his post-retirement initiatives.
By Pritish Nandy
Published: Thu 17 Jan 2019, 8:45 PM
Last updated: Thu 17 Jan 2019, 10:50 PM
The Tatas are arguably India's most respected corporate house and the Tata brand always heads the list of top Indian brands. The man who took this brand and built the entire Group around it was Ratan Tata, 81, who till recently led the Tatas as its chairman and still heads Tata Sons, the holding company, and the two main charitable trusts. He has received countless awards from all over the world for his leadership in business and philanthropy and the Padma Vibhushan, the civilian award of the Republic of India, second only to the Bharat Ratna. He speaks to Pritish Nandy in his office in Mumbai, from where he leads his post-retirement initiatives.
You studied architecture in Cornell. Then you shovelled limestone in Tata Steel, after which you joined Nelco and did not have a very successful time there. It is only when you succeeded JRD in 1991 that you had this splendid success story. What changed?
Let me correct you, Nelco was not an unsuccessful stint. It was very successful in terms of wiping out losses and making it a dividend paying company again. What went wrong was that the Tatas never adequately capitalised the company. So while it became positive, it could not scale up and grow. You may recall that we were in radios when I joined the company. We had only 2 per cent market share. I took that to 20 per cent.
And given the capital that we never got. because we were made a part of Tata Power which didn't have any real interest in consumer products, we went into industrial electronics. But for me personally it was a tremendous learning period.
Why was the Tata Group so keen to only stick to its traditional businesses?
There were a whole host of peripheral companies in the Tatas and there may still be some. The older directors like Nani Palkhivala felt that we shouldn't bother with textiles, we shouldn't bother with Nelco and should focus entirely on the major companies like Tata Steel, Telco, Tata Chemicals. In the case of Nelco, I must say, with a certain degree of pride, that had it not been for Jeh, the company would have been liquidated. He saw the future in electronics. He saw the future in air travel. He saw the future in computers, IT. A good example is watches. If it was not for Jeh, we would have not had a viable company like Titan. We certainly would not have been in the jewellery business.
When you succeeded Jeh, what did you see as its inherent strengths?
One, there was tremendous adherence to ethics and value systems. There was also a great sense of pride in what we were. Russi Mody was very proud of what Tata Steel had done. Darbari was very proud of Tata Chemicals and Tata Tea. But, unfortunately, there was no marshalling of all that into the Tata Group.
One of the problems you addressed?
Yes, I tried to do that through bringing in one logo, one brand identity.
Much to the discomfiture of some of your colleagues?
Well, there was discomfort in the sense that for some of these things they had to refer to Tata Sons and for so many years they had been their own bosses. So there was some resentment there. Jeh stood with me in making this transition, though it took place after Jeh.
This idea of building the Tata brand was your first move?
How was that inspired? Why did the brand become your first priority? Not people. Not products. Not businesses.
I was a young man in Tata Steel having come up, as you mentioned, from the shop floor. Looking at the situation where Tata Steel did not speak to Tata Engineering and Tata Engineering did not speak to Tata Chemicals, it seemed such a waste. If Tata Tea wanted to buy something that Tata Engineering could have sold them, they would instead look at someone outside. In the market we were missing out so much in terms of opportunities because we were not one. Everybody was busy taking their own decisions. When the integration finally happened, most of the companies fell in line and began introducing themselves as part of the Tata Group. They started talking about combined revenues, size, common interests.
Did they start taking commercial advantage in the marketplace of the Group's enhanced size and stature?
Yes, I believe so.
Which were the companies that you felt had a serious future?
I spent most of my time in Telco that became Tata Motors.
Well, I guess, that reflected your passion for the Nano?
The Nano came later. I think we have all forgotten that the first Indian car that was designed in India and produced in India was the Indica. Everyone said it couldn't be done without collaboration. But we did it. Nano came in later as our effort to make the most affordable family car.
What do you think happened? Why did Nano not become successful?
When we announced the Nano at the Auto Expo in Delhi, we got more attention worldwide than the group had ever received in the hundred years we had been around. When we arrived in New York and showed our passports to immigration, they would ask if we had anything to do with the Nano. It was so much in the news in those days!
When we launched the car in Delhi, on the day of the launch we received 300,000 orders for the car with full payment. That was the level of excitement in what was then described as a Rs100,000 (about Dh5,200) car. Our competitors had said it couldn't be done at that price. And we had done it. It was there to be seen, touched, driven.
It wasn't actually a Rs100,000 car by then? It was perhaps closer to Rs200,000 on the road.
No, no. When you added the taxes, it went up to maybe Rs130,000. But you are right, the price of steel later went up and so did other things. So, its price kept increasing. And Mamata Banerjee then arrived on the scene and stopped us from producing the car in West Bengal. She actually won the election on the basis of giving that land back to the farmers. We then had to move to Gujarat. We thought that as soon as we turned the switch on, everything would reactivate. But the fire was gone. Our sales people made the greatest mistake by marketing it as the cheapest car. The aura around the Nano became a stigma. People said: I don't want to be seen in the cheapest car. I don't want the cheapest car parked in my driveway. After that, it was downhill all the way. It never truly recovered.
Do you think you missed out in being part of today's FAANG economy dominated by Facebook, Amazon, Apple, Netflix and Google?
I don't think we could have been there. I think it would have been very difficult to be an Indian company in those areas and we wouldn't have had the mindset to be successful there.
You have shunned the media business. Why is that? Be it traditional media or new media.
You are talking about me or the company?
Both. In fact, the Tatas gave away The Statesman, once a leading newspaper.
I had nothing to do with The Statesman. That was Nani. He gave it to Cushrow Irani. When things got hot between the Government and the newspaper, Jeh issued a mandate that we would not get into media again. We continued the mandate. Jeh believed that ownership and editorial should be totally independent of each other. But politicians never tolerated that view.
But media today is very different, particularly digital media?
Well, we have come very close to investing in electronic media but it has not happened. But we did Tata Sky, which is also a content delivery platform, though it is no longer the biggest any more.
Let's look beyond business for a moment. What do you read?
In the last few years, I have not read much of any serious stuff. I watch streaming content, Netflix.
What do you do beyond business and philanthropy?
I enjoy cars. I have started to collect cars now.
Old cars? Antiques?
No. Cars of the 60s and more recent ones. I am particularly passionate about their styling and mechanical issues. That's why I buy them- to study them. And, oh yes, I still fly.
How often do you fly?
I fly the company jet. I fly helicopters. I use them to go Pune, to the Tata Motors factory. I am passionate about the technologies of aviation. That brought Jeh and me together.
I hear you almost got married five times?
And the one time you almost walked to the altar was when you were in the US?
Why didn't you marry her?
I would have got married that time. But I had to suddenly come back to India because my grandmother called me. And around that time, the China war happened too. So I got stuck here. That person later got married, happily married and then her husband died. And then some years ago I was sitting in my Bombay House office when someone gave me a slip of paper and said he had just come back from a conference in Paris where he had met this person and she had given it to him for me. It was from her. There is nothing special about the relationship any more, though. But now we keep meeting each other. She has a family of her own, children too. It's a small world. We had completely lost touch with each other and now we are meeting each other again, as friends this time.
Would you contemplate marriage?
No. Nor does she. We are just friends now.
It is commonly known you love animals. Particularly stray dogs. You had approved their presence there. I also understand you have supported many animal causes.
Well, I saw the dogs being shooed away when they came into the building during the rains. I told the security to allow them in. Where would they go otherwise? I asked the Taj to allocate their leftovers to strays so that they can be fed. One of those dogs now walks all the way from Bombay House to come here and catches the lift with other people coming up and gets off, not on the first or second floor, but on the third and stays here till I go home - after that it returns to Bombay House.
You know about People for Animals?
Well, I founded it. Maneka Gandhi runs it. It is hers now.
What kind of music do you like to play?
Music from the 60s and 70s. The Beatles, for instance. But deep down inside, I would find a sense of accomplishment if I could play classical music.
I am not religious at all, not in a formal, ritualistic sense.
And, finally, what is your idea of India?
I am very bullish about India. As Manmohan Singh said, the time for India has come. If you remove some of the controls, India will realise its true potential. Investment in infrastructure and education will lead to great change for the people. But the micromanagement of the economy - whether it is by the politicians or the bureaucrats - must stop. Only then will India achieve what it is truly destined for. -Open Magazine
Pritish Nandy is a poet, journalist and filmmaker