Tata Sons Chairman N Chandrasekaran was the guest at the Express Adda in Mumbai last week. He spoke with Anant Goenka, Executive Director, The Indian Express Group, and Sunil Jain, Managing Editor, Financial Express, on his book Bridgital Nation, the economic slowdown and how the liquidity problem is largely behind us.
On the fear of machines replacing human beings
In general, whenever there has been a technology disruption, it has dramatically increased the market opportunity and has created a huge number of jobs. This was true at the time of steam engines, electricity, you can go back and look at any big disruption or technological breakthrough. But the problem is that there is a period when this disruption happens and then the impact happens with a lag and there is a period where there are a lot of jobs that are lost. But from the technology disruption that we are currently talking about, AI and Mission Learning and whatever else that we can bundle together, IOT (Internet of Things), Cloud, and everything else, there are two points I want to make. One is, this will create jobs here and now, but coming specifically to the book (Bridgital Nation), which is focused on India, I think the opportunity clearly is immense. India has fundamentally a lot of demand and we have a lot of supply in terms of talent. And we are trying to solve the demand problem differently and the supply problem differently. As a result, we are not getting both to meet.
What do we mean by that? We have a shortage of healthcare. Our patient-to-doctor ratio is one of the worst in the world. If you take rural areas, it’s even worse. Same thing can be said of education, judiciary, physical infrastructure, and we don’t have the luxury of time and the luxury of capital to be able to do it the traditional way. So the only way to solve this problem is using technology. If you can bring this technology to the common people, then it dramatically changes the equation.
On the government and private sector working together
Unfortunately, we have a problem in our country. We either blame the government, or we blame somebody. I think this will require everybody to play a part. Private sector can play a big part. The problem is that the environment has to be created for the private sector. Let’s say, for example, we want to fix primary healthcare. It can be done. It will require government and private sector to work together. Not necessarily in terms of JVs or anything like that but clarity has to be there on who does what.
On GDP numbers and economic slowdown
You can’t react to one quarter’s GDP. I believe this market has huge potential. There are a number of trends and these trends are irreversible. Rising aspiration of people is irreversible. Whether it is a political mistake, whether it is an economic slowdown, it doesn’t matter. These things will happen. But what we are going through is also a correction process. We have had excesses. These excesses have to be corrected. Only thing is we are taking too long to correct those excesses. If so much NPA is there, the fact is, it’s there. It has all accumulated in front of our eyes. So this correction has to happen, but it has to happen fast.
On whether the headlines have affected what foreign markets think of India
You see, the problem you have today is very different from seven or eight years ago. Earlier, if there was a problem, there would be a newspaper article in the morning and after that people would forget it. But now what is happening is there is a tweet, everybody is a reporter, and (there are) WhatsApp groups. So the negative perception of anything is of a different magnitude.
On whether we need to become more protectionist
It’s a case by case phenomenon. There are areas in which you need to open up and areas which you need to calibrate. We have to calibrate, there’s no question. We can’t just say that everything is fine. There are repercussions if already the small and medium entrepreneurs, people in a particular sector are suffering, and you just have to take that into account. Because we have so much of growth potential, we need to make sure we have the right environment to capture the growth potential, competition is always a good thing. But at the same time, we have to calibrate. We can’t just say that we are open for everything. It cannot be done like that.
On whether the government is open to suggestions
I will tell you one thing about this government, they probably work harder than anyone else. Second, I have not found a situation where I had to say something — I don’t go and meet them regularly — but if I have to communicate on a policy matter, I have found them to be very receptive. At least, I can put my point across. For example, you take the power sector. What should be the reforms? If you take the real estate sector, what is the real situation on the ground? If these are the things I want to communicate, I find they patiently hear and take the inputs. Whether that input will drive their vision, I cannot say and I cannot expect also. I’m pretty sure there are 20 other people giving them inputs. So I’m only hoping that if 25 people give inputs, they will synthesise it in some form and take a call. If I run my company, it’s the same thing. If ten people want to give me inputs, I will listen, and finally I will take a call on what I think is right.
On whether we should be protective about our data
We should be careful about data. The core issue is simple. In data, one is privacy and the other is ownership of data and localisation. And these two are real issues. There is a case from the tech companies’ point of view why consolidation of data in single location, free movement of data enables more tools to be applied. But there is an equally strong case of ownership of data which has originated in a country, we have control over that data and there are three-four possible solutions. The solutions will not be uniform, they have to be bilateral. There will be some countries where you have reciprocal arrangements, in some countries you cannot have. Geopolitical relationship between nations also influence. And there are two or three possible alternatives and that need to be discussed. Between India and the US, this has to be agreed and each one will maximise what they will get out of it.
On India’s technological capabilities
Unfortunately, you know, we don’t appreciate what we have. India has every strength that is required to be able to create exceptional platforms on the more sophisticated technologies as far as this particular area is concerned. Where we lack is in the hardware area but definitely in software, AI and machine learning and everything else, we can create world-class platforms and it will happen. So, when it will happen, who will do it, I don’t the answer, but we are on a journey. You have to appreciate that our growth in this area has been in last 10—15 years.
On the need to put in more money for research
We need to create more PhDs, we need to put in more money for more research. Our problem is that we don’t invest in research. The PhDs are not respected, even the people who do PhDs, they don’t do pure research immediately, they go back and take a job because the industry pays them more than academia. And even if you want to set up something in our institutions, to give an environment, it’s very hard. If you want to do big scale research and want to create an environment in our institutions, the whole process that we have to go through to do that is very hard. So, to promote research, we need to create high paying jobs for researchers and we have to make it very attractive, otherwise we will create all these skills and they will go and then join the industry and do everything other than research.
Some companies have lot of research but collectively we can do more. Software is one area, but in many other areas we need to be creating more research, but it’s just not us alone.
So, overall how do you create the ecosystem, how do you work with the institutions, how do you fund research in multiple institutions, how do you make it attractive so that those people continue to do research. In most of the western countries, when they go into research, that’s a professional career for a lifetime, they don’t move away from that but in our system, it is not like that. They will get three-four years experience and then they will move away. Because our system doesn’t allow people to do the research and then parallely do other things. So we have issues which we need to fix.
On whether we need govt involvement in institutions and corporates
I think empowerment is critical and agility is critical and state funding is critical but at the same time for many of the things — when people do research, they need the freedom to do so. I think we need simplified rules, at the same time we need accountability. I feel we need supervision, we don’t need suspicion.
Riddhish Soni: Research Scientist at Indian Institute of Remote Sensing, Indian Space Research Organization
What is the role of Tata companies in bringing about sustainable agriculture and new techniques like precision agriculture for the
It is too large a question. See, we have one of our companies focused on agriculture. They do a lot of work but I think the problem needs to be addressed, a lot more can be done and we have a limited role that we play. Probably, there is potential for us to expand our role; we will think about that.
Sunil Alagh: Chairman, SKA Advisors Pvt Ltd
In today’s world, both in terms of organisations, when you reach a certain level, is the boss more important or the organisation?
Always the organisation.
Chhavi Moodgal: InCred
You spoke about the potential of people and how they contribute to the growth of the nation but the other thing we need is capital and environment.The past few months has been very tight when it comes to liquidity, particularly for small and medium scale enterprises. What are your suggestions to ease that off?
On this liquidity question, I think it is behind us. This is my own assessment, of what we see — from our own NBFC, our distributors and dealers, whether it is Tata Steel or Tata Motors — from all our companies. We deal with a lot of SMEs and our assessment at this point in time is that the liquidity problem is largely behind us. There may be still issues here and there but it is largely behind us. And I think it is a one-off. I do not think it is a cyclical thing. But I think the potential is there, capital will flow as long as they can execute.
Ayaz Memon: sports writer
What made you take up marathon? I am sure you are not doing it in two hours, probably much longer than it. Is that ‘me’ time or are you resolving lot of issues while you are running?
So, ‘me’ time is the time you resolve issues also (laughs). Marathon time is very meditative, you keep running and I don’t listen to music. I just keep running, so many thoughts come to my mind, sometimes business, sometimes next run, it could be anything. I organise my thoughts, definitely the day’s agenda comes in the mind, but you don’t control it. It’s not like you decide that today while I am running, I am going to think about this, so you let go.