Ratan N. Tata took over as chairman, Tata Sons, in 1991, the year that saw the most transformative economic reforms in India led by the then finance minister, Dr Manmohan Singh. Leveraging these changes in the newly unshackled Indian economy, Tata’s resolve right from the beginning was to propel the Tata group to a truly global entity. When the group later acquired Tetley (2000), Corus (2007) and Jaguar Land Rover (2008) to emerge as the largest industrial employer in the United Kingdom, I remember my British clients saying jokingly that it is ‘East India Company happening in the reverse direction’. Little wonder, the group revenue which was around US $ 5 billion when he took charge soared 20 times to over US $ 100 billion by the time he left.
It was not easy for Ratan Tata to step into the big shoes of J.R.D. Tata who had successfully steered the group’s fortunes as its iconic chairman for more than five decades. Their leadership styles were different, yet Ratan Tata remained deeply committed to JRD’s focus on philanthropy wherein two thirds of Tata group’s profits were channelised through charitable trusts and focused on education, skill development, healthcare, and rural development in India. Like JRD, he, too, internalised the belief that profits which come from the people must go back to them.
When he took over, many of major companies, namely Tata Steel, Tata Chemicals and Indian Hotels were run by veterans like Russi Modi, Darbari Seth and Ajit Kerkar who initially found it difficult to give up control. But Ratan Tata gradually paved way for the transition to new generation of leaders to take these companies to their next phase of growth. He could also visualise TCS’s emergence as a jewel in the Tata crown and the company saw a seamless transition from its founder CEO F.C. Kohli to S. Ramadorai. He gave complete freedom to TCS to manage its affairs that led to it going public in 2004 in what was then India’s largest ever IPO – which got oversubscribed many times. TCS remains what many call the group’s cash cow and one of India’s most valuable companies. Later TCS, with its vast resources, gave Ratan Tata the leeway to think big in taking the group global.
Tata knew what focus was all about. When he took over, there were over 100 companies in the group. With active inputs from consultants, the group exited from businesses like Lakme, Tata Oil Mills, ACC, Tata Textiles and a few others. Disinvestment from non-core and acquisitions in strategic sectors almost went hand-in-hand. The acquisition of VSNL in 2002 too helped enhance Tata Communications’ capabilities in the telecom sector. Corus and Jaguar Land Rover acquisitions are well known but the buying of Daewoo Motor’s truck manufacturing operations in 2004 was also quite strategic.
It is said that the sight of a family of four travelling on a two wheeler, all drenched in rain, led Ratan Tata to steer the design and manufacture of the affordable Tata Nano car for the masses at a price of just Rs one lakh. At that time, it was considered to be a marvel in value engineering by Tata Motors. Despite the initial success, the car did not do well in later years but Tata Motors could deploy those learnings to introduce many more exciting car models crafted indigenously. Realising the relevance of electronic vehicles amidst the challenge of climate change, Tata Motors has now become India’s highest selling car manufacturer in that segment.
When I was deputed by the Tata’s in 2015 to join the government of India as the CEO of the National Skill Development Corporation which played a pivotal role in the Skill India Mission, he was quite happy and said that the nation must come first in whatever we do in life. This fact is also reflected in the Tata Code of Conduct which is signed by each employee as an article of faith.
The Tata group’s values got so deeply embedded in me that it changed my career’s trajectory towards government, thinks-tanks and nonprofits. Ratan Tata once asked me about the specific steps which the government was contemplating to transform the skill development sector from being supply-driven to industry-demand centric. He also showed keen interest in second generation reforms which could trigger growth in India’s job market. I had a few answers but not all, because generating adequate jobs has remained a complex issue.
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However, his queries reflected the curiosity of a child and yet the catholicity of a researcher committed to the national priorities.
I remember my first visit to Bombay House and I was surprised to see stray street dogs loitering in the reception area and the corridor, instead of any visible opulence expected in most corporate headquarters. In a short while, I saw Ratan Tata walking in and gently cajoling the dogs who used to be fed by Bombay House. I later learnt about his deep commitment to causes like animal welfare and cancer care. Other than generosity, I learnt from Ratan Tata that simplicity and austerity are cherished values and not something that one should be ashamed of.
The acquisition of Air India was another feather in Ratan Tata’s cap. It was a dream come true as it came a full circle since Air India was Tata Airlines before it was nationalised. Ratan Tata himself was a licensed pilot as well. He would have loved to live to see the turnaround of the airline and its emergence as a truly world-class carrier. Not many people know that Ratan Tata gave wings to many start-ups as well by funding them from his personal wealth whenever he saw promise in an idea which could be leveraged for breakthrough in business, community development or nation building.
His legacy of generosity and purpose must continue in the times to come, just as the philanthropic legacy continued after J.R.D. Tata left the scene and handed the baton to Ratan Tata. Providentially, Tatas as India’s largest business conglomerate happen to be controlled by two trusts (Dorabjee Tata Trust and Ratan Tata Trust) which own over 60% of Tata Sons, which acts as a holding company owning stakes in all Tata group companies.
The two Tata Trusts, which are the main shareholders of Tata Sons, typically receive substantial dividends from their ownership stake in Tata Sons, and a significant portion of these funds is directed toward philanthropic activities across India. Although the exact annual spending on philanthropy varies, Tata Trusts typically allocate between 60% to 80% of the dividends they receive to charitable projects each year.
For a general sense of scale, Tata Trusts has historically allocated between Rs 1,500 crore to Rs 2,500 crore (approximately $200 million to $350 million) annually to philanthropy. These funds support various initiatives, including healthcare, education, rural development, and arts and culture. These numbers can vary year-to-year based on the dividends received, Tata Trusts’ financial strategies, and the current focus areas of their philanthropic efforts, but the value of the philanthropy persists.
Jayant Krishna is former global capability centre head, TATA Consultancy Services (TCS). Krishna is also former CEO of the National Skill Development Corporation, PM’s Skill India Mission, ex-group CEO, UK India Business Council, founding CEO, Foundation for Advancing Science and Technology, and senior fellow, Center for Strategic and International Studies (CSIS).
