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The Tata Group, India’s largest conglomerate, spends millions each year on education, renewable energy, health care and charity. Can the Tata brand of compassionate capitalism take on-and take over-the global economy?

Not everyone is so enthusiastic. In 2006, a black page was added to company history when 12 protesting farmers in Kalinganagar were shot dead by the police in a long-running conflict over expropriation of their land, on which Tata Steel wishes to build a complex. A similar conflict is underway with landowners in Singur, a district of West Bengal, where Tata Motors plans to manufacture Nanos, the world’s cheapest car.

Where human rights are concerned, there’s still plenty of room for improvement, says Viraf Mehta, a former employee of Tata Steel Rural Development Society, now the director of Partners in Change, which fosters social responsibility in business. “The Tatas provide fair compensation and good alternative housing,” Mehta acknowledges, “but the residents of these areas don’t have much choice. In that respect, it remains an unfair battle.”

Mehta also says the environment is too far down on the Tatas’ priority list. “Take the Nano—a $2,500 car, a splendid achievement, and nice for the Indian masses,” he says in his office in the capital, New Delhi, “but it’s not an environmentally friendly car. Tata Motors has not focused on cars that run on biodiesel or alternative energy sources. The group really could have distinguished itself internationally that way.”

The new environment in which Tata operates today is nothing if not international. Under the current chairman, Ratan Tata, who’s been at the helm since 1991, the Tata Group has grown from an antiquated Indian industrial giant into a financially sound, globally active group that operates in 80 countries with nearly 300,000 employees. Total income for the 2006-’07 fiscal year hit $28.8 billion—more than 3 percent of India’s gross national product. Profits amounted to $2.8 billion.

With its spectacular acquisitions of steel producer Corus and tea manufacturer Tetley, the concern has developed a strong international profile. Last year, it earned more than 38 percent of its revenue outside India.

The Tata Group’s globalization is impressive, but are its social policies geared to the expansion? Insuffi- ciently so, in Mehta’s view. “In India, the Tatas have an imposing tradition of responsible business, but by international standards, their current achievements are less impressive. There’s still a lot of work to do.”

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