Discuss the political and social factors because of which TATA has to shift from Singur to Sanand.


Discuss how the decision of a State has changed the fate of a Region (Sanand/Singur), Company (TATA/Ancillaries), People (Sanand/Singur) and an Industry (Infrastructure and others).


A Big Push Decision

Chief Minister of Gujarat Mr Narendra Modi may not know the theory of Big Push but he certainly knows how to give big push to industry and development in the state. He saw the opportunity for Gujarat in the issue of TATA. When TATA’s Nano project was struggling to survive in West Bengal, Mr Modi appeared on the scene as a white knight and offered 1,110 acres of land to TATA to set up a plant in Gujarat.

The real estate business which was experiencing one of the worst recessionary periods received a sudden boost after TATA Motors move to set up a plant near Ahmedabad (Sanand). This has led to the exponential increase in the prices of land around the Nano plant site with the rate of an acre being quoted as high as Rs.  40 Lakh from Rs.  5 Lakh that prevailed a day before the Govt. allocation to Tata Motors. At a time when most property developers are going slow on luxury projects and promoting budget homes, an array of deluxe properties are coming up, which include multi-crore golf villa projects, large integrated townships and premium shopping plazas.

A leading builder Jateen Gupta, who has planned to set up a shopping mall, about 10Km from the Nano plant on the Ahmedabad Sanand Highway has already tied up with retailers, such as, Landmark, Star India Bazaar and Westside supermarkets, a part of the Tata Group. TATA Housing Development Co. Ltd., the property development arm of the TATA Group, wanted to develop a 100 acre plot for housing and retail space for Tata Motors’ employees, who will work on the Nano Project.

The Government’s decision to ramp up the infrastructure facilities around the Nano project too has helped property prices shoot up. To ease the flow of traffic between Ahmedabad and Sanand, the State Govt. has decided to widen the five Km stretch of the Sarkhej-Gandhinagar Highway between Thaltej Gurudwara and Sanand Crossroads. The 17 meter road will be widened to 24.5 metres to convert it into a six-lane stretch.

Ancillary industry is also coming around the Nano Plant to meet the auto component requirements of the small car. TATA motors has decided to allot land to its 55-odd Nano parts vendors at Sanand, which will make 350,000 cars annually in a phased expansion. Among the SMEs that are coming up, is a unit of Durr India Pvt. Ltd. which will paint the body of the car using Robots, Avtec Ltd., which makes cylinder heads, cylinder blocks, connecting rods, crank shafts, hubs and synchro sleeves, round gears, shafts, transmission case and cover for Nano. Other major vendors like Bosch India, Exide, etc. are also coming.

Setting up of ancillary units around the Nano plant is said to have instigated the residents of seven villages adjoining the Nano project to oppose the State Government’s move to acquire their land for setting up an industrial estate by the Gujarat Industrial Development Corporation (GIDC).

The land acquisition process was initiated by the State Govt. following inquiries by some of major industries like Bharat Forge and the US Based company, Alexandria, to set up auto component manufacturing units.

It was the setting up of a vendor park which was the centre of the main dispute at Nano’s original site in West Bengal with Trinamool Congress opposing the move. Tata Motors had planned to have the vendor park adjacent to the production site to keep logistics expenses under control.

Source: Business Environment, Dr Vivek Mittal, Excel Books

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