Instability may halt growth momentum: Ratan Tata
27 August 2007
this week, corporate leaders had said that the industry
is used to the volatility of Indian democracy and that
economics has been decoupled from politics. But speaking
to Karan Thapar, in Devil''s Advocate, Tata said
that if this government is out of office prematurely,
it would be damaging for the economy. " It will cause
the momentum of growth, which we enjoyed, to pause if
not reverse," said Ratan Tata, Chairman, Tata Sons.
He admits that despite the prime minister''s enthusiasm on reforms, he has not delivered on them, because the numbers do not stack up in the government''s favour. "The prime minister has seriously and genuinely wanted to see reforms take place," said Tata.
Tata believes the unintended consequence of the nuclear deal not going through would be rejoicing in the neighborhood. He thinks those that want the government to dump the deal have misunderstood it.
"The only people who will be happy probably would be Pakistan and China. The benefits that the civil nuclear deal will bring to the country will be enormous," stated Tata.
Tata said he decided to stick on with the small car project in Singur, in West Bengal, despite violent protests because chief minister Buddhadeb Bhattacharya stuck his neck out. "A lesser person would have succumbed to political pressure," commented Tata.
And he yearns for the days of single party rule, or strong coalitions, so that in India, there would be a serious debate on issues, not opposition for the sake of opposition.
a chairman of Tata Sons, do you welcome the prospect of
a mid-term election, or do you fear its consequences for
both growth and the investment climate?
I fear the uncertainty in the political environment, which will certainly cause India to stumble, will cause the momentum of growth, which we have enjoyed, to pause if not reverse. And I for one have been extremely encouraged by what has happened in India. It started in the last regime and continued under Congress rule India moving forward and becoming an economic powerhouse.
And that could start unravelling with a mid-term election?
I believe it could if there is a mid-term election. I hope there is none.
What would happen to our target of 10 per cent growth? Would a mid-term election make it unattainable?
I wouldn''t want to comment on that but certainly it would make things difficult.
if at the same time the nuclear deal were to unravel,
what impact would that have both on FDI inflows into the
country and the perception of India as a destination of
The civil nuclear deal with the United States is in many ways the best possible thing that has happened to India in a long while.
from the fact that it enables India to go ahead on a much
larger scale in the much needed area of power of
nuclear power which is clean power it also takes
away many of the dual use sanctions which have hurt India''s
time this will give India a tremendously powerful position
in the knowledge industry, in R&D, in high technology.
I believe the benefits the nuclear deal will bring to
the country will be enormous and I''m very very sorry that
on various issues this is being beleaguered.
if it doesn''t materialise this is a serious loss and set
back for India?
I believe it''s a serious setback to India. I believe the only people happy to see this not happening are probably Pakistan and China.