Economic downturn a `passing phase’: Ratan Tata

India's difficult economic environment will most likely continue for another year but growth will re-establish after the present 'passing phase', Ratan Tata said as he handed over reins to the new boss at Tata Group, Cyrus Mistry.

In a farewell letter to his colleagues, Tata, 75, who retired as chairman of the salt-to-infotech group on Saturday, after a 50-year stint, including 21 years as group chairman, asked them to show "support", "commitment" and "dedication" to achieve success in these difficult times.

Tata, who has been appointed Chairman Emeritus, asked employees to live by the "value systems and ethical standards on which our group was founded".

"The difficult economic environment that we face in the current year will most likely continue through most of the next year. We will probably see continued constraints in consumer demand, over-capacity and increased competition from imports," he said.

The seemingly gloomy picture, however, will be a passing phase, he added.

However, in the short run, it is natural that there will be great pressure on Tata companies as well, he said. It is imperative that companies reinvent themselves in terms of business processes and cost reductions and consumer-focused products to emerge more aggressive in the market place, he added.