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‘Certainly not the home of India’s richest conglomerate head’ – How Ratan Tata lives

In ‘The Story of Tata’, Peter Casey writes that Ratan Tata’s modesty is reflected in the company and its 'no-bribe' stance too.

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India first glimmered as the future ‘Jewel in the Crown’ of the British Empire in 1835, when colonial administrators discovered that the hillsides of Assam, the frontier region of north-east India, were covered with a wild-growing evergreen shrub that botanists call Camellia sinensis and everyone else refers to as the tea tree, tea shrub or just plain tea plant. 

In 1849, after a New Jersey-born carpenter found metallic yellow flakes in the American River near Coloma, California, there was a Gold Rush. In 1835, in India, it was a Tea Rush. The promise of fortunes to be made from the Assam hillsides catalysed the creation, in 1858, of the British Raj, the rule over the Indian subcontinent by the British Crown.

A full 142 years later, in 2000, under the chairmanship of Ratan Tata, the Raj, which had ended in 1947 with Indian Independence, was suddenly rewound and run backwards. That year, the Tata Group acquired Tetley, the biggest teabag brand of the former British Empire. It was the largest foreign acquisition ever by an Indian company, and, six years later, when journalist Damian Whitworth called at the Taj Mahal Palace—the iconic Tata hotel in Mumbai—to interview the Tata chairman for The Times, he beheld Ratan ‘in an opulent suite’, gazing ‘out across the Arabian Sea towards the West’, sipping ‘ice tea (Tetley’s, of course) and reflecting on the deal’.

Whitworth asked him if he enjoyed ‘the irony of an Indian company buying Britain’s leading tea brand? ‘Yes,’ he replied then quickly changed the subject. ‘Tata is too shrewd and too shy to be caught gloating about his successes like some territory-grabbing East India Company nabob.’

Maybe there really was a touch of shrewdness about Ratan’s reserve on that occasion—but, if so, it was only a touch. Damian Whitworth himself wrote that before he met Ratan, he was attending a party thrown by the head of Air India, the state-owned national airline that had been founded in 1932 by J.R.D. Tata as Tata Airlines, India’s first commercial air carrier. ‘Le tout Mumbai was there,’ Whitworth wrote, ‘and as the wine flowed, there was only one mysterious absentee, Ratan Tata himself.’ When he asked about this, the revellers laughed: ‘He’s a recluse. He doesn’t exactly do the cocktail circuit.’’’

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They talked fondly of Ratan, but clearly regarded him as an eccentric. ‘He sometimes drives himself!’ reported one member of this chauffeur-driven set. Randhir Kapoor, the Bollywood filmstar-turned-producer, recalled going to the barber in the hotel at the same time as Tata. ‘He paid for his own haircut,’ he said, amazed but approving.’

With most of Tata Sons owned by charitable trusts, Ratan and the other Tatas are wealthy but far from being multibillionaires. Ratan was raised in what amounted to a palace by the grand lady of one of the wealthiest families in India. ‘And yet,’ Whitworth writes, ‘if you look at his lifestyle now, he lives like any professional manager—actually, all the top corporate honchos I know, have lifestyles vastly in excess of Ratan’s. 

He’s lived for the last few years in a comfortable flat with a small garden for Tito and Tango [his dogs], on the coast a few miles from the Taj Mahal Palace hotel. The apartment is owned by the Tata Group and upon his death will be returned to the group. I conducted most of our interviews at the apartment. It is the home of a bachelor who loves reading and dogs, certainly not the home of the head of India’s largest conglomerate.’ Ratan admitted, ‘Yes, I did grow up amidst a lot of wealth. But don’t forget that I spent ten years in America trying to live on the Reserve Bank’s allowances . . . and . . . and the money was never enough. So I had to take all kinds of jobs, including washing dishes, to make ends meet. That sort of thing helps you forget that your family is rich quite quickly.’

If this modesty—an ethos of drive-yourself-and-pay-for-yourown- haircut—seemed remarkable in the chairman of the greatest company in India, it was, Whitworth implied, entirely of a piece with the radically unconventional company itself. Whitworth quoted a ‘well-known Indian investigative journalist’, who had pointed out to him that the Tata Group was different from other companies in the country. ‘They refuse to take bribes. That’s very unusual.’ Ratan himself laid down as a principle: ‘Corruption is rife . . . We will not submit ourselves to corruption.’

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And that is not all. Whitworth judged the ‘Tata group . . .possibly unique among global corporations in its approach to its workers. Take Ratan Tata’s restructuring of the steel division. With investment in mechanization and adoption of new processes, Tata Steel would now require far fewer people to run the plant than it had before. There were great uncertainty and unrest about a possible massive layoff of employees. But instead of simply laying off thousands of employees, Ratan was able to get the Union’s agreement on a voluntary retirement scheme, wherein the employees retired per the company’s plans, vacating company accommodation and related facilities and leaving Jamshedpur. In return for this, Ratan had offered to continue payment of their basic salary until their age of retirement. This averted a major dispute involving a demand for employment to the next generation of employees. The payment of the basic wage until retirement was unbelievably lower in cost than holding surplus manpower to appease the Unions or long drawn out agitation and discord between the workers and the management.’ 

In doing this, Ratan demonstrated that his values proceed unbroken from those of Jamsetji Tata and his sons, who laid the foundation for an exuberantly capitalist enterprise that nevertheless defined corporate social responsibility not as a fringe-benefit by-product of business success, but as the indispensable driver of that success, the reason for a company to do business.

‘The statistics are chilling,’ Ratan said in 2006. ‘We [in India] produce 18 million new people every year. That’s [almost] one Australia each year. I would love to see the disparity between the rich and poor reduced. If you have a billion people that should be our strength.’

This excerpt from Peter Casey’s ‘The Story of Tata: 1868 to 2021’ has been published with permission from Penguin Random House India.

Disclosure: Ratan Tata is among the distinguished founder-investors of ThePrint. Please click here for details on investors.

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