Nuclear deal best possible thing for India: Tata

NEW DELHI: Calling the India-US civil nuclear deal 'the best possible thing that has happened to India', noted industrialist Ratan Tata has warned that political uncertainty caused by opposition to the pact could adversely impact the country's growth.

"I fear the uncertainty in the political environment will certainly cause India to stumble, will cause the momentum of growth, which we have enjoyed, to pause if not reverse," the chairman of India's largest private sector group said.

"The civil nuclear deal with the United States is in many ways the best possible thing that has happened to India in a long while," Tata told.

He said the deal removes dual-use sanctions on the country and opens up nuclear commerce to help India go ahead on a much larger scale in the area of power generation, and that too using technology that is environmentally clean.

"Over time this will give India tremendously powerful position in the knowledge industry, in research and development, in high technology," he said, adding that the benefits will be enormous.

"I'm very, very sorry that on various issues this is being beleaguered. I really believe that if it doesn't happen the only people who would be happy and benefit by it not happening will be the people of Pakistan and the people of China."

Tata also felt that the deal not going through would also impact the inflows of foreign direct investment. "I think it could because I think there would be repercussions and there would be reactions."

In the free wheeling interview, the Tata chairman spoke of the need for India to be bold which, he added, would require a change in the mindsets and the legacy inherited from the days of the planned economy.

"If you look at China and India, one glaring difference is that everything China has done has been enormously bold, in fact unbelievably bold, on the verge of seeming to be overkill," he said.

In contrast, India has always been growing in small increments, behind the curve. "We're always trying to catch up. Perhaps the time has come to go ahead of that curve and think really boldly."

Tata also felt that the government's failure to implement insurance and banking reforms that were promised three years ago did not send a positive message out. The country urgently needed the reforms.

"Financial services, banking, insurance needs to be opened up. There can be constraints on market share that you put, so our financial services don't get dominated by foreign companies but nevertheless it needs to be opened up."

At the same time, he candidly admitted that it was not the government that was holding up the financial sector reforms. "Usually it is not government policy that leads to this kind of roadblock.

"Usually it's the vested interests in the country, sometimes in the private sector, sometimes from the public sector, that works its way behind the scene into policy which blocks moving forward."

Tata also felt that the time had come for the Left parties to rethink their age-old strategies, given the influence they have over economic policy, reforms in labour laws and foreign investment as well as overall growth.

"Today we have to reinvent ourselves constantly. Religions reinvent themselves, the Soviet Union reinvented itself, China reinvented itself economically. The time has come when we need to re-look at ideologies, re-look at past legacy and ask ourselves is that relevant today."

Speaking about the problems he faced at Singur, where the Tatas' Rs.100,000 car factory is coming up, Tata said the only reason his group did not move out of West Bengal was because of Chief Minister Buddhadeb Bhattacharya's commitment.

"A lesser person would have succumbed to the political pressures," he said in praise of Bhattacharya. "And let me tell you what that would have been done. I would have just picked up my stakes and gone to another state.

"I enormously respect him," he told.