India's image has been hurt by scams: Ratan Tata

The outgoing Chairman of the Tata group Ratan Tata is "rattled" by India's current image from scams and retrospective taxes. Reuters

"This leads to a large degree of uncertainty. Never before has India that kind of image. So that really rattled me because then anything can happen, "said the Tata patriarch.

India should give an ' irreversible commitment ' that law of the land has sanctity and the consent of the Government cannot be taken lightly, he stressed, adding "India would otherwise be taken lightly".

Despite the fact that criticism of the current situation, sounded Tata very optimistic about the future of India as an economic power.

I welcome the recent steps taken by the Government to promote investor confidence, Tata said: "what they did recently to foreign direct investment and other things, I think, will again a degree of trust".

While these steps may have had a "big" positive impact was not enough, he said.

"There will have to be done to ensure that the efforts of human laws that are built, the legislation is in place, is here to stay. If it is changed, it must be changed in a rational way to announce a prospective and not retroactive change, "he said.

With a description of FDI in multi-brand retail as an important step, said Tata that in the area of the consumer with a possibility to choose would help, hopefully at a lower cost. "If they do not then the model failed."

Tata had words of praise for the Prime Minister Manmohan Singh describes him as a leader of high integrity and architect of the reforms of 1990.

"In my opinion is that the PM had to move. If he was attacked from all sides … do you nothing after that. If you want him to do something and you attack him from all sides, would then in all probability he did not not do it. "

Answering a question about crony capitalism, said the Tata President that it was becoming a problem, not only in India but worldwide. India was not a leader in this but "we are very prominent".

He said crony capitalism leads to a situation of the rich get richer and the poor getting poorer. This inequality leads to an unhealthy situation in which power is focused in certain pockets and a "skewed" competitiveness, he said.

Tata said that the problem of crony capitalism can be done away with in principle by the law implemented in the spirit. "There is nothing wrong with the laws that we do. What we have unfortunately tend to do in India is we make laws, drafting of which is quite OK, but enforcement of it is bad, "he said.

He added that non-compliance or violation of the law a new legislation in place which everyone brings blocks as if all offenders. "But the offenders continue to work because enforcement is still inadequate. So now you have a very biased legislation that is replaced by a good one that makes it for you to operate legally impossible or very difficult for you to operate and accentuates more the situation, "he added.

"If we stronger legislation, without exceptions based on who you are or who you know, then I think crony capitalism would finally had his own limit," he said. Asked if the problem was worse, Tata said, "Yes. It's just an observation, I have no facts or figures to prove it. "

To a question about his statement that the structure of the Indian values and ethics slowly, especially in business backwards was, he said, handle "I to that view."

Elaborating, he said that he thought the system was partly responsible for that because if a company follows a system of values than operations certainly were much harder than they were "If you meet the standards that exist today meet would be".

"So certainly the softer option is to be a part of the system and you move to a lower level and so it becomes a snow-balling effect. And we consider that what we do that is from the line is ok and it should happen, "said Tata.

To give an example, he said there would be quite a sound 30 or 40 years ago as a man broke a queue in a cinema house to get a ticket out-of-turn. "But today if someone barges in nobody will dare to say something and he gets what he wants and ten tickets and they will be a House. He could be a black marketer and sell tickets. He can do what he can do. So nobody likes him. "

"Ultimately what happens is that the small man says that a little money is good to get to the front of the line. Soon it becomes a normal thing. And that I think is what happened in the 50 years of independence, "he said.

Asked if that also happened in the industry, Tata said that if there is a product in short supply some companies exploit that will make money. Some dealers, distributors and intermediaries also earn money.

"We have that kind of situations. It's not that we have enforcement directive which now comes to us and says that the maximum sale price is such and such and we will sue you, if you were violated. "

PTI

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