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Not a nano question

india Updated: Sep 07, 2008 13:41 IST

It is not about Ratan Tata or India’s largest auto company, Tata Motors —which is challenging assumptions of costs the world over. The Rs 1,500 crore that the company is ready to forego for employee safety is as generous a promoter as any worker can aspire for. The amount — 9 per cent of the company’s market capitalisation — has been taken in stride by the 309,530 shareholders. Between Tata’s exit threat and today, its stock has risen almost 5 per cent.

It’s not the profits, which Nano would have brought, that the markets worship. When announced in 2004, the company was looking at margins that would be thinner than the industry’s five per cent. In the four years that have passed since, input costs have gone up. And if excise duties on small cars not been halved from 24 per cent to 12 per cent, the surging inflation would have turned the Rs 1 lakh car project into a loss-making venture. (Even now, I suspect company finances would be better off without Nano.)

It’s not about Nano, expected to be the world’s cheapest car, which was to help some of the 7.2 million two-wheeler buyers migrate to the four-wheel category at the rate of 250,000 Nanos every year. Riding on this 623 cc change agent is the potential to do to Indian travel what the mobile phone has done to Indian communication. The car will offer safety, dignity and style to millions of consumers, at a price that the world said — and many competitors continue to say off-record — was impossible. Thanks to this promise, the car, the company, Singur and West Bengal as well as the country have been put on the world auto map.

It’s not about the Tata Group, which can glide over this speed breaker as effortlessly as the high-end Jaguar it bought on June 2, 2008, can over physical bumps. If this needless controversy is examined from the group’s finances level, the Rs 1,500 crore that Tata Motors might lose would be made up by the group’s profits in 25 days. To put it in perspective, Nano is one product out of hundreds, of one company out of 164, operating in one out of seven sectors — IT, engineering, materials, services, energy, consumer products and chemicals — that the group has focused on.

It’s not about the 997 acres at Singur. Or even the 400 acres that Trinamool Congress chief Mamata Banerjee wants the company to give up. In the hoodlum-led, violent and disruptive politics that Banerjee and her brigade have unleashed, logic or on-ground rigour has no place. When Ratan Tata says that he will not be able to keep down the price if ancillaries are not on land contiguous to the main car plant, it is an argument of a businessman, not a speculator who wishes to amass any extra square inch to convert the plant into a high-rise, high-end, golf-course facing apartment complex.

It’s not about the industrial resurgence of West Bengal. Already reeling under shortage of new investments in the industrial sector, the state is burdened with an anti-business image, something that Chief Minister Buddhadeb Bhattacharjee has tried very hard to change. The Nano project needs to be contextualised from the state’s economic point of view, where industrial sickness is reaching epidemic proportions. Officially, there are 35 million unemployed people and 70 per cent of the 1,730 industrial units in the state that have commenced production recently have done so with investments of less than Rs 10 crore. The Nano project could have created and driven on a new road, which other industrial groups would have followed.

It’s not about India. While the car company has got invitations from Haryana, Orissa, Punjab, Andhra Pradesh and Maharashtra, each has its own local politics that is not conducive for Nano. The jingoistic ‘Marathi manoos’ won’t allow parking rights to an ‘Indian’ in Maharashtra. Tata Steel, one of the group companies, has burnt its fingers at Kalinga Nagar in Orissa (another state in dire need of industrial development); there are growing protests in Haryana against Reliance’s Special Economic Zone. Nano can easily do without these. When it was unveiled on January 10, 2008, invitations to set up similar plants came from Africa and South America. Closer home, Vietnam and China are ready to host the plant. All of these are just one Memorandum of Understanding away.

So what’s it all about? Answer: Bengali voters in the short-term and Indian voters in the long. At their intellectual addas, the voters in Bengal have to decide whether they will continue to back foolish leaders who are seeking political blood by opposing large industrial projects which can accelerate economic development and ensure a further flight of capital from the state. or whether they seek a leadership that’s more in tune with the state’s flight to prosperity. Zooming out, Nano asks another uncomfortable question in an election year: what is the democratic model we are choosing? Of violence? Of poverty creation? Of changing our economic benchmarks from China, which is slowly getting out of reach, to Brazil? In a globalised age, where neither workers, nor entrepreneurs, material, money, markets and consumers can be geographically classified, is India’s democratic choice going to serve and grow the economies of other nations?