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Saturday, August 23, 2008

Tata, Nano, Singur & Mamata

It happens only in India!

Yeah, that cliché is an apt description of what’s happening at Singur.

For the uninitiated, Singur is the place in West Bengal where the Indian conglomerate Tata group's Tata Motors planned its next automobile factory. The proposed factory is supposed to build the new model Nano, the cheapest four wheeler in the Indian market. Nano is tentatively priced around 1 Lakh and scheduled to be released by Oct 2008.

The Nano project is an investment of Rs. 2000 Cr by Tatas, the first of its kind in communist dominated West Bengal. The project initiated in May 2006, has a requirement of around 1000 Acres of Land for the Car factory, Utilities, facilities and a vendor park. The communist government headed by Buddhdeb Battacharya has agreed to the proposal and acquired the required land at Singur and gave a green signal to the Tatas.

As with any Land acquisition in this country, and as it is the first time in West Bengal, there was enough resistance from the local community to give up their land at the government prescribed rates. However, the government could convince the people and started the acquisition process in Sep 2006. And Tatas started their work in Jan 2007 in the acquired & fenced land and by now have invested close to Rs 1500 Cr of the proposed 2000 Cr investment.

With the investment and the resulting development, the land prices have gone up tremendously and thus the aspirations of the land owners who have reluctantly agreed to the land acquisition. These farmers, adding upto 400 acres of land have refused accept the money for their land, from the government. Here entered the messiah of masses, Mamata Benerjeee, the Trinamool Congress Party leader. Mamta took the cause of the farmers who are reluctant and started agitation at Singur, repeatedly. These repeated agitations, the latest one being on 24th Aug 2008, have disturbed the production plans to Singur.

Having won the local body elections at Singur, Trinamool Congress and Mamta are with renewed energy in opposing to Nano project. The current compromise formula that Mamta & party suggests is that 400 acres of land should be returned to Farmers. They suggest Tata’s to drop the Vendor Park from the proposed project and set it up at a different place. Incidentally, the Vendor Park is planned to set up in around 300 acres.

However, what Mamta and other ordinary citizens don’t understand is the very purpose of such a vendor park. In lean manufacturing and just in time approach, a vendor park will bring down the cost of manufacturing and the savings can be passed on to end customer. The basic idea behind the low priced model of Nano is solely based on the 60 ancillary units that will be co-existing with the car manufacturing unit.

While we have to see how this first episode of West Bengal’s romance with corporate India turns out, I felt sad to read Ratan Tata’s statement that “We came to West Bengal at a time when many people considered us to be mad...If anybody is under the impression that because we made this large investment, we will not move, they are wrong”

I’d say that Tatas don’t need to worry. There are three states which have already sent a red carpet welcome message to them today (23rd Aug 2008).

Naveen Patnaik, Chief Minister of Orissa; Vilas Rao Deshmukh, Chief Minister of Maharashtra (Bombay) and Y.S. Rajashekhara Reddy, Chief Minister of Andhra Pradesh (Hyderabad) have sent a welcome message to Tatas and promised to give whatever they need to relocate the project to their states.

Incidentally, two of the above states are ruled by Congress Party, which is teaming up with Mamta Benarjee’s Trinamool Congress in West Bengal in toppling Tata’s plant!!

Now, I cant help saying: It happens only in India

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