Outgoing Tata group chairman Ratan Tata has welcomed the recent steps taken by the government to boost investor confidence. “What they did recently to FDI and other things, I think, will reinstate some degree of confidence,” he said.
While these steps may have had a “great” positive impact, it is not enough, he said in an interview to PTI on Sunday.
India has been “hurt” by scams, court processes and retrospective taxation acts that have given “a sense of uncertainty to investors in terms of the credibility of the government”, he said.
“There will have to be efforts made to reassure people that the laws that are in place, the legislation that is in place, are here to stay. If it is changed, it has to be changed in some rational way of announcing a change that is prospective and not retrospective,” Tata, who turns 75 later this month and retires on December 28 after 50 years with the company, said.
Describing FDI in multi-brand retail as an important step, he said it would help the consumer in terms of having an opportunity to choose, and hopefully, lower costs. “If it doesn’t do that, then the model has failed.”
Tata also praised Prime Minister Manmohan Singh and described him as a leader with high integrity and an architect of the 1990 reforms.
“My view is that the PM had to move. If he got attacked from all sides... you don’t do anything after that. If you want him to do something and you attack him from all sides, then in all likelihood he would not do anything.”
Answering a question about crony capitalism, Tata said it was becoming an issue not only in India but also globally. India was not a leader in this but “we are quite prominent”, he said.
Tata said crony capitalism leads to a situation where the rich get richer and the poor get poorer. This disparity leads to an unhealthy situation in which power is focused in certain pockets and skews competition, he added.
Tata group, once the pioneers in civil aviation, is unlikely to get into the sector because of “destructive competition”, he said.
Recalling the group’s proposal for a tie-up with Singapore International Airlines for a domestic carrier in India in the mid-1990s, he said, “It is a different sector today than it was at that time.
It is somewhat like telecom. There is proliferation of many operators and some are in financial trouble. I would hesitate to go into the sector today in the sense that the chances are that you would have a great deal of competition which would be unhealthy.”