The decision to pull out from Singur and take its Nano car project somewhere else will cost the Tatas Rs 1,500 crore, which they admitted to have already invested in the project. But the cost to the state of West Bengal seems to be incalculable at this point.
Even discounting the reactions from some industry circles, Bengal stands to lose on three counts — investment potential, employment opportunities and loss of image. According to responses coming from all over the country, the second and the third factors are crucial.
A car-manufacturing project is always a coveted investment because of its multiplier effect on the employment front. Since a car is actually an assembly of hundreds of thousands of components, employment opportunities around a car project are always quite high.
In fact, what a modern car factory has are only a press shop, an assembly line and a paint shop. But it is surrounded by dozens of component manufacturers, which supply all kinds of parts, ranging from critical parts like engines to non-critical ones like lamps.
Thus, component-makers provide the overwhelming bulk of blue-collar employment. The component vendors in the Singur project were supposed to provide employment to about 5,000 people while the Tata Motors mother plant would have employed around 1,200 people.
But, according to almost all industry bodies from the Confederation of Indian Industry to the Bengal Chamber of Commerce and Industry, the real value of the Singur plant is incalculable. For, the Nano claimed to have achieved a breakthrough in technology and business model.
At a dealer price of Rs 1,00,000, the car was supposed to be the cheapest in the world. And this attracted the attention of the world, not only the automotive industry.
When Tata Group patriarch Ratan Tata announced the project at Singur on May 14, 2006, it was hoped that West Bengal would gain the most as the project would boost its image and would make it easier for the state government to attract further investments.
But on Friday afternoon, as a somber faced Ratan Tata announced to abort his project at Singur, the image of West Bengal took a beating.
However, industrialists like LN Mittal think that Singur is an aberration and the investment climate in Bengal shouldn’t be assessed on the basis of a single project.
Besides, Sajjan Jindal of steel manufacturers Jindal Group has decided to invest Rs 35,000 crore in a steel plant in West Midnapore. What’s more, a number of steel plants inside the country and groups like Videocon have reposed faith in Bengal.