Cyrus Mistry lauds sustained start-up environment for rapid growth of Indian economy

Cyrus Pallonji Mistry, the chairman of Indian multinational conglomerate Tata group, has cited the "sustained start-up environment" in India as the reason behind several international and domestic investments coming in while opening up new opportunities beyond Tier I cities, and thus helping Indian economy to become one of the fastest growing economies in the world.

In the annual report 2015-16, Mistry talked to shareholders of Tata Motors, saying that the start-up scene in the country is a "positive sign" of an economy that is more mature and responsible.

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"There is a greater thoughtfulness towards investing in new or emerging companies, with a greater attention to the right business model." Mistry said while speaking of continued global volatility across markets during fiscal 2016. He added that the fall in oil prices and commodities has had different effects on different companies and countries.

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While on one hand, the China slowdown has impacted the global economy, one can’t dent that India's robust GDP has also emerged as a talking point.

However, he didn’t complete what he had to say before adding some words of caution. He said that continued delay in some tax reforms still poses an "operational bottleneck" to streamlined movement of goods and services. He also called it as one of the "key challenges."

"The shadow of NPAs continues to haunt the Indian financial sector even as it is all set to grow, with new financial institutions," he added.

Talking of Tata Motors' performance, he said that while the last year was "mixed," strong Jaguar Land Rover strong growth, despite several challenges, has made the tables turn.

He added that this fiscal would be a milestone for JLR’s growth and transformation.

In a separate letter, he aimed of breaking into the top three global commercial vehicle makers and local passenger vehicle market by FY19, for which the company would have to regain lost market share and create an agile and profitable business model.

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Talking of the performance of Tata Motors, its commercial vehicle market share has dropped from 60% in FY12 to 46.4% at end of FY16, with commercial vehicles volumes falling from 5.3 lakh units in FY12 to 3.27 lakh units in FY16. On the other hand, passenger vehicle sales have dropped from 3.33 lakh units to 1.27 lakh units at the end of FY16.

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