Ratan Tata, outgoing chairman of Tata Sons, is angry with the government for its inaction that is driving investment away from the country and forcing Indian companies to seek growth abroad.
In an interview to Financial Times, roughly three weeks before he is due to retire, Tata also accused the government of failing to work as a cohesive unit. "You may have the prime minister's office saying one thing and maybe one of the ministers having a different view. That doesn't happen in most countries," he told the daily.
Tata said different agencies in the government had almost contradictory interpretations of the law or interpretations of what should be done. "These are things which, by and large, would drive investors away in most countries," he added.
In such a context, Tata said, companies and groups like his own were tempted to look away from home and around the world for growth opportunities. "You start looking for geographies where you can make a difference," he noted.
Tata said the government's inability to make decisions made it difficult to grow some of the group's largest domestic businesses, which include Tata Steel and Tata Power. It also stymied expansion in new sectors such as defence, recently opened to private investment. "The defence sector could be the new, new growth sector of India but it probably won't be," he said. "So, in that sense, you start looking for geographies where you can make a difference."
Tata said India could definitely compete with China if domestic companies had the same encouragement and support from the Indian government.
On the group's acquisition strategy, Tata said the focus was likely to shift to emerging markets in southern Africa and elsewhere in Asia, including neighbouring Bangladesh and Myanmar. But the group, which already earns more than 60 per cent of its revenues outside India and is Britain's largest manufacturing employer, was unlikely to repeat deals such as Corus.
"There are no known bold acquisitions on the horizon," he said. "What I have been telling everyone is that because of the economic downturn, we need to really digest and get our debt at a more manageable level."
Pointing out that delay in getting project clearances was one of the biggest problems India Inc faced, Tata said a seven- or eight-year wait to get clearance for a steel plant was unacceptable.
In an interview published on the Tata group's website yesterday (hurriedly withdrawn later for unknown reasons), the outgoing chairman said the greatest challenge his successor, Cyrus Mistry, and other group chiefs faced was staying faithful to the Tata code of ethics. "They would have to stay away from compromising and surrendering to a venal system," he said.
On his post-retirement plans, he said he would like to make a clean break but would be available if called upon to help in any way. "But it would not be a functional duty. I would decide whether I wanted to get involved or not," he said.