homeeconomy NewsDavos 2023 | Tata to commit $90 billion in next 5 years, says Chairman N Chandrasekaran

Davos 2023 | Tata to commit $90 billion in next 5 years, says Chairman N Chandrasekaran

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By Shereen Bhan  Jan 19, 2023 4:33:44 PM IST (Updated)

The Tata Group chief put his weight behind exports to realise India's full potential, saying if we get the manufacturing story right, exports will be a huge opportunity.

Noting that consumption levels were quite strong, and the economy is in a much better position than it was 10 years ago, N Chandrasekaran, Chairman of Tata Sons, told CNBC-TV18 on Wednesday that the conglomerate was planning a capital commitment of $90 billion for the next five years.

“We have a very, very huge capex outlay between steel, auto, electric vehicles, renewable energy, batteries, electronics, and a host of other businesses, our capital commitment for the next five years is $90 billion," Chandrasekaran said in an interaction with CNBC-TV18's  Shereen Bhan at World Economic Forum meet in Davos, in the presence of Union Minister for Railways, Communications and Electronics and Information Technology, Ashwini Vaishnaw and Union Minister for Women and Child Welfare Smriti Irani.
The latest comments from the Tata Group chairman follow a series of calls from the Indian government underscoring the need for private industry to invest more in new capacities. 
“Is it like Hanuman? You don’t believe in your own capacity, in your own strength and there has to be someone standing next to you and say you are Hanuman, do it?” Finance Minister Nirmala Sitharaman recently said. 
Bulk of the total new capital investment in India in recent years have come from the Union government. In the current financial year too, the government has already spent over 80% of its Rs 7.5 lakh crore capex target by December. Going beyond the budgeted amount could stretch its finances further.
The Indian government used to spend less than 2% of the national income on capital investments, before the pandemic. However, this year, the number is estimated to have crossed 2.6%.
Meanwhile, private investments have nearly doubled from Rs 3.3 trillion in July-September quarter to Rs 5.61 trillion October-December quarter. However, it is not enough to boost the economy of India's size and scale. The growth in factory output between April and December 2022 has been a measly 5.5%. On the other hand, unemployment at the end of December was at 8.3%.
Chandrasekaran, who helms the Tata Sons group that spans a wide array of industries from salt to software to steel, passenger and commercial vehicles, electricity, and e-commerce, noted that the economy is in a much better position currently compared to 10 years ago and there is a higher level of consumption in both rural and urban areas, and that growth in discretionary consumption in Tier 4 cities is higher than that in Tier 1 and Tier 2 cities.
On the market outlook, he said there are three global transitions that are currently happening across countries: the transition to artificial intelligence, the transition to renewable energy, and the transition to more resilient supply chains. He believes that India is well-positioned to contribute to all of these transition scenarios and that the company has demonstrated that it can leverage technology to drive growth.
The Tata Group chief put his weight behind exports to realise India's full potential. "If we get the manufacturing story right, exports will be a huge opportunity. India must push forward with PLI (Production linked incentive) schemes," he said.
Minister Ashwini Vaishnaw emphasised the government's commitment to supporting vulnerable populations and promoting economic growth through infrastructure development and job creation.
He said, “Investment in railways, last year the capex was $23 billion, this year the capex in this fiscal, which ends on 31st March, the capex is going to be of the order of $26 billion. Same is the story in railway, in highway, in power transmission, that increases the productivity of the country and gives us the long term growth potential of the country improves, also it is resulting into huge employment generation.”
He highlighted that Prime Minister Narendra Modi ensured that the fiscal policy and monetary policy work in tandem. “Our central bank today is in a very good position with a good balance sheet of the central government.  Our central government's liabilities are just about 52 percent of the GDP and GDP growing nominal at 11-12 percent is a very good situation to be in. So I think yes, fiscal consolidation is a very important priority.”
Vaishnaw also said that the government has given regulatory and legal stability to investors. "India has removed 1,500 archived clauses and 20,000 compliance requirements to make it easier for investments to come in."
On PLI schemes, he said the government was planning to expand the scheme in more sectors and that the revenue from the scheme was enough to fund it.
Minister Smriti Irani said the government has developed and deployed numerous schemes across sectors to fire up India’s immense potential. "In India, investment opportunities exist at both the grassroot levels and in established areas," she said.
For full interview, watch accompanying video
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