Tuesday, October 7, 2008

Ratan Tata Vs. Mamta Banerjee

Don't we all think that it was the right thing to move out of Singur for Ratan Tata? Don't we all feel sympathetic about the huge losses he has incurred in the Singur plant? Don't we all feel that Mamta Banerjee was villanous in her acts? I thought so too, until today. While watching Ratan Tata's interviews over the national news channels, I always felt strongly that what he did was right in principle. Now the West Bengal ruling government would learn its lessons, even the opposition would learn some lessons, and that it serves them right for not co-operating with an industrialist like Ratan Tata, which would have been in their own best interests.
I thought all this till I read an article by Prem Shankar Jha in the editorial section of Hindustan Times. To say the least, I feel I have been looking at only one side of the coin, just like most of the national news channels are portraying. Ratan Tata said in his press conference that "We believe a fair compensation has been paid". Jha raises an apt question, "Paid by whom?" The compensation (Rs 131 Crore) has actually entirely been paid by the West Bengal Government. Tatas had taken the land from the government at a lease with a meagre lease rent. This was why it was so easy for the Tatas to move out because they had so little at stake there. Although there investment in the Nano project was 15oo crores, but a major portion of this was in equipment and machinery and other movable things, which they will move out. They would still face a big loss in infrastructure etc, but it would be quite less than what the West Bengal Government would.
Moreover, the land was acquired forcefully by brutal beatings given by policemen to local people. About 400 villagers were demanding their land back since they considered it to be the only security in an uncertain and unorganised sector of non-agricultural jobs. However, Ratan Tata would still have been totally non-guilty if there was no way of making the landholders beneficiaries instead of victims. Jha comes up with an ingenious yet simple strategy - what if the Tatas decided to set aside just one quarter of 1% of their annual sales revenue and distributed it as anuual royalty to owners and sharecroppers. With an annual turnover of 5000 crore (from 500,000 cars), the royalty would have amounted to Rs 125000 crore per acre per year to be split between landowners and sharecroppers. To recover this, the Tatas would have had to increase the price of their car by only Rs 250.
Now the question is would Mamta Banerjee have refused such an offer? Of course not, the farmers wouldn't have let her. Ratan Tata has only proved that he is just another industrialist who did not try an approach that has never been tried in our country.


Bhaskar Tripathi (hellBoy) said...

My friend. I agree with you that people were beaten by police and some of them were not willing to be appeased.However, we all know that Nano is a product that is going to put India thumpingly on the world map.
If 98 people of out every 100 are willing to move,then it is pretty much sensible to apply force on the other two,atleast for the sake of India's development.You cannot appease everyone at one time and be sucessfull.
TATAs earn huge money but that money is not for charity.So there is no point in making a distributive calculation.
BTW : I am no TATA fan.


Nikita said...

Well, I am a Tata fan. I feel they have been instrumental in India's economic development, particularly because of Jamshed Ji Tata's visionary approach of the upliftment of society and because Tatas have always taken there corporate social responsibility seriously. But it did not happen this time, most of the farmers were not ready to give up their land. They wanted and needed the jobs but also wanted to keep their land which doesn't seem unfair to me. It could have been easily done if Tatas had taken a different view of the scenario. Nobody wants to share the hard earned profits of Tatas. This was a great opportunity for the development of an underprivileged area. Succesful businesses follow the win/win philosophy, unfortunately this became a case of lose/lose.
Its not easy to be like Jamshed ji Tata, Ratan Tata only proved that

Bhaskar Tripathi (hellBoy) said...

I Agree and disagree with you on this.BTW your writing is quite witty.
keep posting i will be a regular reader miss.