Small car, Big gains

After a tumultuous time in the state, the Tatas' have finally said Tata to Bengal, and Singur and moved to Gujarat. So it's goodbye to one M (Mamata) and a hello to another (Modi)! The move has dampened Durga Pooja celebrations in Bengal, according to reports on the internet, and print media. Understandably as well, I would say. The Nano factory had provided a stimulus to the local economy in Singur. The local people are understandably both disappointed and angry at the Tatas' decision to move out. But I guess they have only themselves to blame. Indirectly, if not directly. Mamata Banerjee's protest wouldn't have any fire without support from the locals. This is a loss for the state, but also for India as a whole. What kind of signals does it send out, when an elected government is held hostage by a renegade opposition leader? When it cannot come true on the promises it made? Well, you can call me an unabashed capitalist, but there is no option to industrialization, if we are to progress. No, I'm not saying that snatching your land for setting up a factory is fine. But that's where the state has to step in. To ensure that you are compensated fairly for your land. That you've got a fair bargain. If the state cannot ensure that, you cannot blame the industrialist for that! And that was what Mamata did. Instead of working out a package where the farmers would be compensated fair and square, she demanded complete transfer of land back to the farmers. What would they do with just the land? Ultimately, as the Singur plant demonstrated, the gains to be had out of industrialization are immense. Creation of a micro-economy in the industrialized zone. Creation of jobs, of infrastructure - roads, transport, electricity and water. Is the transfer of land back to the farmers worth sacrificing all this? Mr. Ratan Tata famously said that he will not pull out, even if a gun is held to his head. In the wake of the decision (to pull out), he said, "Ms. Banarjee has just pulled the trigger".

Since August, when the agitation started in Singur, several states had shown interest in offering Tatas the necessary incentives for their project. Finally, Gujarat has pipped them all to the post. The speed with which the government moved clinched the deal. And I think that is what is really noteworthy. Whatever may be said about Mr. Modi's style of functioning (some say that he's autocratic), you cannot deny that he's moved swiftly and smoothly. In fact, this is what invites investors to the state. I'd once read an article a long time back (when Mr. Modi assumed office for his third term as CM) about how he personally takes initiative to cut red-tape and bureaucracy. Gujrati people have business in their blood. Give them a conducive environment, and they're sure to flourish. And Gujarat has indeed emerged as one of the most investor-friendly destinations. At the Vibrant Gujarat summit in 2007, Mr. Tata had said, "You are stupid if you are not in Gujarat!". That one of the foremost industrialists in the country (and worldwide!) should say this, says a lot about the economic scenario in the state. And with the Nano project moving into Gujarat, this image will doubtless be embellished. Though it's a small car project, the gains will be BIG. As they would say in Gujrati, "Project nu naam Nano chhe, par faydo bau moto!"