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Bhaskar Bhat, Director, Tata Sons Ltd., delivered the keynote address at the MMA Annual Convention 2022. He spoke on the theme: "How India Can Make This Decade Its Own."
T
he theme for the convention is about how India
perhaps more than doubled, except for the last three
can make this decade its own. I believe it's not
weeks, thanks to the war in Eastern Europe. Why I refer
India's decade but it is India’s Century. It's only
to the stock market is because it is real money chasing
a question of the ‘how.’ I don't profess to know too
ideas or investments or performance. It has put money
much about the ‘how’ but I do believe, as most of us in
into the hands of many middle-class Indians, apart
the Tata Group have betted on and believed, in this
from investors themselves. But more than that, it
economic engine called India. It's a very unique engine.
signifies the potential of the economy.
It has been on a growth path, irrespective of governments and global ups and downs for the last 31 years, starting from 91-92. We have had years of slow growth and years of extraordinary growth. But like the proverbial Indian elephant, it is growth and it continues to grow. One extraordinary indicator has been the
As we come out of the pandemic, we have to be careful but let us not be fearful. One important indicator of the Indian response is the recent
performance of the Indian stock markets. I did not
The demand on companies has increased because of attrition.
really believe, through my career, that companies'
But this is not like the great
market caps represent their performance but the reality
resignation that is happening in
is that hard money is put into the markets.
the western world, triggered by soul searching by young people
The great bull run
on what they do at work and
The performance of Indian stock markets during the Covid period is now legendary. The index has 10
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why they work.
announcement of opening up of the scheduled
investments by industry after they have covered the
international flights. It indicates the confidence that
capacity utilization shortfall, which is of the order of
the Indian government has placed in the so-called
about 35 percent on average. It is going to be a very
reduction of the danger of the pandemic. Through these
steady but positive and continuous growth in
two years, starting from 23rd of March 2020, the
consumption
Ministry of Health has been working with the aviation
accumulated savings over the last two years are going
sector, which has very rightly regulated flying
to be available to households.
—stopping flights for some time, regulating the capacity utilisation compared to pre-Covid levels, and then reviewing the pricing by each airline.
The
government is confident of handling even any minor, local outbreaks or if there is any recurrence in a new form or a new variant of the Sars-Covid virus.
and
consumer
expenditure.
The
The second is the performance of our rural sector. Overarching on all that has been the fact that three fourth of our population—700 plus million people —have been vaccinated. For consumer confidence to come back, it has to start at the level of the individual consumer. The actions of the government lead to
Consumption‐driven economy
confidence among consumers to go out and spend. The
For the current year, in Tata view, it is going to be an 8.8 percent GDP growth. It varies depending on who has done the projection but it is still a growth and which is one of the highest in the world. It will be driven, as usual, by consumption to begin with and
high physical touch sectors like restaurants, retailing and travel, which were significantly impacted, are going to come back with a bang. We are already witnessing this in some of our companies and it'll only improve.
Stressed labour market
thereafter by a cycle of capex investments and BUSINESS MANDATE
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Our per capita GDP is so much lower than many other
desire to make a significant impact in a selected sector
countries, which are as large as
of the economy. Not everyone succeeds but great and
us or larger, and some smaller
good ideas have found money and success. There are
than us. But our journey is only
many lessons to be learned but these youngsters are
upward.
not just young by age. They are young at heart as well, big risk takers, very hardworking and willing to get tripped at one hurdle and yet, rise and run again. That
The labour market is on fire. The demand on
undercurrent in the economy bodes great news for
companies has increased because of attrition. But this
everyone. It is very competitive. But India is such a huge
is not like the great resignation that is happening in the
market. Our per capita GDP is so much lower than
western world, triggered by soul searching by young
many other countries, which are as large as us or larger,
people on what they do at work and why they work. In
and some smaller than us. But our journey is only
India, it is due to the red-hot economy of startups and
upward. In every sector—whether you take airlines or
technology companies who want new-age talent and
FMCG or fintech—the opportunities for transformation,
young talents. It is a good time to be in the job market
change and improved consumer experience are only
today. Of course, the skills have to be quite different
going to make it better and better.
from what they were earlier.
3Cs – The key areas
Formalisation of economy
Therefore, where should big investments need to
The third theme is the confidence that we all have
be made? Based on what online and digital has shown
in our elephant trudging along—maybe we'll make the
us, I would drill down to three focus areas, namely:
elephant even dance—is the formalisation of the Indian
Convenience,
economy. That journey started several years back and
convenience, Covid has showed us what we could do
it is a very determined and well-planned move.
online comfortably sitting at home. You don't have to
Comfort
and
Cost.
When
I
say
We have had our problems with demonetisation
venture out in a car and go to a retail outlet, park your
and GST. But GST collections have been rising month
car far away, walk to the retail outlet and purchase
on month. Even during some months of Covid,
goods. Also, the cost of transactions has come down
collections crossed 100,000 crores.
significantly, thanks to online.
Now we are
crossing 130,000 crores. Formalisation of the economy is a very good sign as global investors look at investing
Experience economy All these are captured in 'Experience.' Globally,
in India as well.
investments are going big time in experience economy.
Young at heart
Consumers are willing to pay a multiple of what they
The fourth theme that holds out great hope for
were paying for a product, for the experience of
India is the young population raring to go, not just to
acquiring that product. Nobody knows how it splits.
spend but to create new business models in this digital
But we know that premiums on brands and product
age. It's an extraordinary change in India, which is the
categories are based on the functionality of a product.
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Sitting on top of that is the experience of the product, as well as the experience of transacting with a company in the purchase process; in the use process and in the after-sales service process both for a physical product or a service. If you take restaurants, it's not the food alone. It is the experience of eating—sitting and getting served—that people pay for. The list goes on.
thoughtful about networks, bilaterals and so on. The DGCA and the Ministry of Health have made air travel safer, faster and comfortable and helped create the perception amongst Indians that air travel is not luxury travel anymore but the sensible way to travel. Of course, we have a great train network in India and also, our roads are improving.
In experience economy, India has still not witnessed the kind of growth that we are going to see. The big fat
Agility in uncertain times
Indian weddings where billions of dollars were flowing
But the point I want to credit the airlines with, is
were on a back foot for two years. Now, it's going to
for their agility. Despite incurring 25,000 crores of
explode. The event itself at best or at worst, would be
losses year-on-year for the last two years, the aviation
for two hours. But today, weddings last for four days.
industry has delivered to the consumers’ requirement.
Each of them is sliced with a different experience,
Many of us had our own problems of refunds and flight
different theme, different dress, different jewellery and
cancellations. But the service has been on, throughout
different food. So, we have to think in an innovative
the pandemic despite the tough regulations. Industries
manner about the experience economy.
like aviation, hospitality or retail have learnt to be agile, people-centered and to manage with the everyday
The emotional mix
uncertainty. People across industries, cities and nations
In India, the Experience economy is mixed with what Indians are known for: Emotion. The number of movies made in India is not just about entertainment but emotions. So, when you mix experience with emotion, you get a bang for the buck, which is the product functionality, experience and emotion. All these combined gives India a unique position and
The formalisation of economy, digitisation, globalization, atma nirbhar and the PLI scheme are all aligned towards making India stronger. There are debates about what is working and what is not working. But directionally, we are on the right path. I say this despite being involved in one of the most challenged sectors, which is aviation, where there is serious attempt by the government in trying to make structural changes through rationalisation of taxes and being 14
The harshness of our lockdown in 2020 created unprecedented pain to the migrant labour but we lived through that and the country came together to once again gather pace of growth. So it is a very India story. As we look at India, it is no longer only limited to Chennai, Bombay, Bangalore, Hyderabad or Delhi. Thirty
economics for the companies.
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across the globe had to face this uncertainty.
years ago, people in tier 2 and tier 3 towns had a much lower quality of life and lived with lower prices without demanding more. The people in towns have now proven that they are no less than their so-called city cousins, in aspiring for a better life. extraordinarily
to
They have responded
availability
of
products,
premiumization and quality. All these bode very well for the future and that is not going to last for only one decade. In my blue book, this is the India Century.
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