A myth (New Delhi, August 1968) J.R.D. TATA (1904–1993)

A myth (New Delhi, August 1968)
J.R.D. TATA (1904–1993)

is speech made to the Planning Commission stands in sharp contrast to
Nehru’s advocacy of a planned economy and a socialistic pattern of society.
J.R.D. Tata was the head of India’s largest private sector industrial unit,
Tata Sons. He was also personally close to Jawaharlal Nehru, yet his views
on the Indian economy were never reckoned with. His entrepreneurship,
too, flourished in spite of various government controls. He once remarked
sadly to a friend, ‘my life has been a struggle—never once has any Prime
Minister asked me what I thought of the economic policy of the country. In
no other country would this have happened.’ J.R.D. spoke his mind in this
speech. Other industrialists possibly shared his views but were never so
forthright in expressing their opinions.

MAIN SPEECH

e alleged ‘danger of concentration of economic power’ is a phrase that

occurs with deadly frequency in the Approach Paper (to the Fourth Five-

Year Plan) and in almost any economic discussion with any Left Wing

planner or government official. We, Indians, prone as ever to swallowing

and repeating readymade catch phrases and slogans without understanding

or analysing their meaning, have happily taken to this non-existent bogey

deliberately planted in gullible minds by our leftist propagandists.

It would seem that the greatest danger to this country today does not come

from our multiplying population, from the threats across our borders, from

communal bigotry and strife, from the continued poverty of our people,

but, believe it or not, from the concentration of economic power in the

hands of a few individuals or firms, conducting large operations—that is,

large by Indian standards but small by world standards.

A h h d f h l d l h I b

As the head of the largest industrial group in the private sector, I must be

possessed of a tremendous concentration of economic power. As I wake up

every morning, I carefully consider to what purpose I shall apply my great

powers that day. Shall I crush competitors, exploit consumers, fire

recalcitrant workers, topple a government or two? I wish Dr Gadgil or some

other eminent protagonist of this theory would enlighten me as to the

nature of this great power concentrated in my hands. I have myself totally

failed to identify, let alone exercise it.

Surely economic power in private hands, if it means anything at all, must be

the power to make economic decisions, such as to start a new industry

where and when one pleases, to raise capital and borrow money, to employ

labour, to appoint managers and fix their remuneration, to fix prices for the

goods and services one sells, to travel abroad for business or pleasure, to

enter into contracts for managerial or other services, and so forth. Isn’t it

odd that these are the very economic powers, the exercise of which are

almost totally denied to businessmen in our country?

Let us face it, gentlemen. e bogey of concentration of economic power in

private hands is a myth deliberately propagated by those who are bitterly

opposed to any form of large-scale private enterprise.

In fact, the only fearsome concentration of economic power that exists

today, lies in the hands of our ministers, planners and government officials.

It is that concentration of economic power which is the real threat to our

democracy. It is the economic power wielded by those gentlemen, and not

by industrialists, which causes the agonizing delays, the misconceived

policies and the mismanagement from which our economy has suffered for

so long.

Strangely enough, if a large business house like Tatas does not embark for a

while upon any new major industrial venture, it is accused of inactivity and

lack of dynamism. If it seeks to diversify into a promising medium-sized

venture, it is accused of attempting to crush, or block the growth of, small

entrepreneurs. If it wishes to embark on a major capital intensive project, it

is accused of monopolizing capital resources and adding to its concentration

of economic power!

e Approach Paper seeks to deny large firms institution finance in order to

avoid the concentration of economic power, ignoring the fact that it is the

large companies with their large human and physical resources which are

b bl l Wh ‘l ’  b l d

best able to execute large projects. What is ‘large’? is obsessional and

almost psychopathic fear, pretended or otherwise, of the concentration of

economic power has become a major factor in the economic policies of the

government. It is because of this obsession that the Managing Agency

System is sought to be totally abolished irrespective of the managerial

upheaval it will cause.

It is time, I submit, that this question and the allied one of monopolies be

taken away from the political arena and entrusted to a commission or other

permanent quasi-judicial body, which would investigate and decide on each

case on a pragmatic basis. Let the proposed Monopolies and Restrictive

Trade Practices Commission be entrusted with the task, amongst others, of

dealing with all charges of concentration or misuse of economic power.

Otherwise this vague charge will continue to poison and paralyse every

important economic issue affecting the private sector that comes before the

government.