News: A difference of opinion

(TT 10/01/2007) New Delhi - Did top industry houses like the Tatas lack the wherewithal to go global 10 years ago? Or were they constrained by “restrictive” government policies?

Finance minister P. Chidambaram and Tata group chairman Ratan Tata did not quite agree with each other on the issue at a panel discussion at the three-day Pravasi Bharatiya Divas celebrations.

While addressing a session on How to Get $1.5 Trillion of Capital Investment: The Resource Hurdle for Development, Chidambaram asked whether the Tatas would have bid for Anglo-Dutch steel firm Corus a decade ago. According to him, the group would not have “dared” to do so.

“If I were to ask Tata 10 years back if he would have bid for Corus, he would have said, ‘I don’t know’. But in his heart he would have asked, ‘How could I dare to?’,” said Chidambaram.

Tata, however, insisted that he simply could not because of “restrictive” and binding government policies that were prevalent then.

Chidambaram was drawing attention to a spate of mergers and acquisitions (M&A) made by Indian companies, especially in the past couple of years.

According to a study conducted by market research agency Grant Thornton, 480 M&A deals worth $28 billion were made by Indian businesses in 2006, an increase of 52 per cent over $18.35 billion spent in 2005.

According to Chidambaram, corporate India has changed its outlook and broadened its horizon to expand globally. “Today, India has changed, and the Tatas have bid for Corus,” he added.

Tata, however, said, “I have a different view from the finance minister. I would have simply told him that I could not (have bid for Corus)... because of the policies.”

The industrialist said the reforms process in the past few years has now enabled Indian entrepreneurs to go global. “As an Indian entrepreneur, I can say lots have changed and policies are much friendlier now,” he said.