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Does the Tata group really give capitalism a good name?

Historian Mircea Raianu paints a sobering portrait of the ups and downs of the Tata group in his new biography

(From left) Ratan Tata, J.R.D. Tata and Russi Modi at a meeting in Delhi. (Getty Images)

Afew years ago in Mumbai, a Marxist economist told me that of all the business groups in India, the one she disliked most was the Tatas. I was puzzled: The organisation where she worked received Tata support, and Tata charities contributed to many causes she considered important. Why? “Because they give capitalism a good name,” she said.

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No matter your perspective, the business group of Tata, which celebrated its sesquicentennial in 2018, is special. You could marvel at them as an admirer would, as T.R. Doongaji certainly does in the opening pages of University of Maryland academic Mircea Raianu’s meticulously researched biography of the Tata empire. There, the former managing director of Tata Services reminds us: “You wake up in the morning to a Titan alarm, have Tata Tea for breakfast, call your office on Tata Indicom, go to office in a Tata Indica, and lunch at the Taj. After work, you may shop at Westside or have a cuppa at Barista. This list could go on. Yet, the first thing that comes to mind when we think of this great organisation is trust and commitment.”

Doongaji saw the way the lives of India’s elite (surely those who lunch at the Taj are part of India’s 1%) were intertwined with businesses that are part of the Tata group as a virtuous circle. But immediately below, Raianu cites the writer Arundhati Roy, who says: “We all watch Tata Sky, we surf the net with Tata Photon, we ride in Tata taxis, we stay in Tata hotels, we sip Tata tea in Tata bone china and stir it with teaspoons made of Tata Steel. We buy Tata books in Tata bookshops. Hum Tata ka namak khate hain. We are under siege.” In pointing out that we eat Tata’s salt, the fine point—that Tata also makes salt—is not lost, though she too speaks of those who stay at Tata hotels. Both the left and the right, it seems, can’t do without Tata.

The influence the conglomerate has on Indian life is all-pervasive and overwhelming. In this, the Tata group is far from being alone. Other business groups—Reliance, certainly, given its massive consumer footprint, but more subversively and insidiously, Adani, and other groups too, like Godrej—possibly touch many more Indian lives in myriad ways each day.

Tata—The Global Corporation That Built Indian Capitalism: By Mircea Raianu, Harvard University Press, 304 pages,  <span class='webrupee'>₹</span>699.
Tata—The Global Corporation That Built Indian Capitalism: By Mircea Raianu, Harvard University Press, 304 pages, 699.

Dispassionate, non-hagiographic accounts of business groups are hard to find. Russi Lala wrote The Creation Of Wealth in 1981—the view of an insider admiring the Tata group. Loksatta editor Girish Kuber’s condensed The Tatas: How A Family Built A Business And A Nation (2019, first published in Marathi in 2015) had the advantage of access. Raianu’s book relies primarily on the company’s archives, and is, as such, unique, for as an outsider he is able to take a step back and see the group from a broader, global context.

Tata is unique for several reasons. One, the family is from a tiny religious minority. Two, it has broadly played by the rules of the game and is known for its ethical conduct—exactly what rankled my Marxist friend. The group’s admirers believe that had Tata bent the rules, it would have had greater successes. They see such fairness as virtuous, while its critics resent that halo. And three, Tata philanthropy has been more strategic, coinciding more with India’s national interests than has been the case with other groups. We associate Tata with institutes devoted to science, fundamental research, cancer research, social science and the arts, not with temples and eye camps—although, to be sure, like other groups, the Tatas also support more traditional forms of charity, including scholarships, hospitals, schools, and disaster relief (Disclosure: I was a Dorab Tata scholar from 1978-82). But its support of more aspirational ideas is remarkable—other groups playing a similar role include the Sarabhais, Shiv Nadar and Azim Premji.

Raianu points out three significant reasons for the Tata mystique. One, it had established transnational financial connections, in particular with East Asia and later the US; two, it exercised control over land, labour and natural resources within India; and three, it created a network of relationships with India’s scientific and technical expertise through its strategic philanthropy.

Jamsetji Nusserwanji, founder of the Tata group.
Jamsetji Nusserwanji, founder of the Tata group. (Getty Images)

This is a useful way to look at the group’s rise. When Singapore separated from Malaysia in 1965 and Lee Kuan Yew, its prime minister, wanted to jump-start the economy, he turned to Tata to help set up a training institute to improve the skills of Singapore’s workforce. Tata obliged. If Tata could not capitalise on such overseas forays in subsequent years, this had much to do with the restrictive environment of the Indira Gandhi years, when capitalists were viewed with suspicion, preventing overseas expansion. I remember retired Singaporean bureaucrats wistfully remembering J.R.D. Tata’s visits to the island, saying that if only India hadn’t stymied capitalists like him, Tata could have been a global brand like the Korean chaebol or Japan’s sogoshoshas. That Tata succeeded despite the obstacles, today owning marquee brands like Jaguar Land Rover, with its software arm, Tata Consultancy Services, becoming indispensable for the global information technology industry, is to its credit. Indeed, in 150 years it has spun textiles, forged steel, generated hydroelectric power, and flown planes across India.

Raianu’s tone is sober and unemotional. He admires the group’s rise but points out that what enabled it was not only entrepreneurial spirit and commitment to ethical conduct but also the confluence of colonial and corporate priorities, as well as two specific pieces of legislation that facilitated the Tatas’ expansion—the Land Acquisition Act of 1894 and the Charitable Endowments Act of 1890. These were meant “to bolster the reach and the power of the colonial state”, as he puts it, but they also allowed Tata to acquire land for its plants and its charity arm to establish the basis of its philanthropy. Tata’s genius lay in not only seeing India as a territorially integrated economic entity but also in trusting Indian thinking by investing in India’s knowledge infrastructure, through universities, labs and research institutes. The soft power Tata has enjoyed, Raianu argues, is due to the institutionalisation of philanthropy as a strategic way to earn the social licence to operate.

The access Tata had to land and labour, as well as resources, too is noteworthy. Tata went to Jamshedpur early, and in identifying steel and textiles—two products the British colonial rulers wanted early in the 20th century—Jamshedji Tata figured out that aligning corporate interest with governmental priorities is a good thing. Jamshedpur became perhaps the first corporate town in India. And in spite of the Tatas’ lukewarm relations with India’s freedom movement, when there was labour unrest at a Tata unit, Mohandas Gandhi went to the facility, appealing to the workers to take a more constructive and less confrontational approach.

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While the Indira Gandhi years were difficult for most private businesses in India, the Jawaharlal Nehru years (1947-64) were not necessarily cheerful for business either. Indeed, Tata lost control of Air India in the Nehru era when the government nationalised the airline, and Nehru was displeased when he found out that Tata intended to support the Swatantra Party. Naval Tata even stood for the Lok Sabha election from South Bombay, as the constituency was then known, and came a close second to the winning Congress candidate, scuppering George Fernandes’ chance of winning the seat.

The Tatas are not above playing courtiers either. J.R.D Tata did praise the Emergency, just as Ratan Tata has been a cheerleader of Narendra Modi. But they were also shrewd in embracing the idea of trusteeship that Mohandas Gandhi championed, and, as Raianu shows, in this they were ably guided by Jayaprakash Narayan and Minoo Masani.

Raianu has studied the Tata archives extensively but he is not beholden to them. As he correctly notes, relations with unions and communities worsened over time: In 1996, a union leader was murdered, allegedly by a rival faction in Gopalpur, Odisha, and the strike at the Telco plant in Maharashtra in 1989 was contentious. A dozen Adivasi protesters were killed in police firing in Kalinganagar, Odisha, in 2006. And Tata had to move its auto plant from Singur in West Bengal to Sanand in Gujarat in 2008 because of opposition from the local community. And as he astutely observes, with greater automation and competition in the global steel industry, it is perhaps no longer possible for the Tatas to act in the benignly paternalistic way they did in the past century.

Salil Tripathi is a writer based in New York.

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