The Cheapest Car Ever Made

As we had often come back to discussing economic benefits/impact of sports I thought it was about time for an economic discussion forum.
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Re: The Cheapest Car Ever Made

Postby prasen9 » Tue Sep 09, 2008 2:00 am

Sandeep, that is quite possible. If they do get a better deal, they will move away. They were not naiive when they selected the site for the project. That WB has labor problems was known by them. They got driven out of Bangladesh, so they took the risk knowing fully well that they would lose some days of work. That is why the government sweetened the pot as much as they did. Now, if indeed, there is a better deal somewhere else, the Tatas will move away.

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Re: The Cheapest Car Ever Made

Postby Kothai » Tue Sep 09, 2008 4:01 am

As guys were saying .. today's morning iBN and TImes now channels were reporting that TATA is not happy with the deal.. Infosys Director, India Inc , etc.. all have mentioned that they are rethinking their plans to expand or invest in West bengal..

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Re: The Cheapest Car Ever Made

Postby prasen9 » Tue Sep 09, 2008 4:26 am

Standard negotiating ploy? Of course, Tata will not be happy with the deal because they want no iota of compromise and they want to get the maximum monetary benefit and convenience out of this. The bottom-line is what is most important. Whether they will move or stay. They have a huge investment to write off if they move. The rest will make the obligatory sounds. If the Singur plant works out, this issue will go away.

The major problem with Bengal according to my randomly sampled statistically not-significant evidence is the productivity of labor. The labor force in Bengal is significantly less productive than that in the other states. The work culture is abysmally poor. That causes companies more significant losses down the road than these piddly negotiations about the last penny. If Bengal can fix the productivity problem, business will automatically come. If not, then, they will not. I have heard and seen that productivity in private industries is better than in the government factories, but, I think that still there is a gap between Bengal's labor and that in other states.

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Re: The Cheapest Car Ever Made

Postby Sandeep » Tue Sep 09, 2008 5:51 am

You are right Prasen, I have noticed that even in my limited experience! Orissa is even worse. I always wondered what could be the problem with the labour of these two states! It is a huge achievement if you can make them work efficiently for 8 hrs a day. And it is not even that these two states are overflowing with jobs. May be the work culture is so.

Sandeep, that is quite possible. If they do get a better deal, they will move away.


More than a better deal, there must be a definite discussion in TATA headquarters on how efficiently they can run the plant if things will be like this in West Bengal. What is the guarantee that the same drama will not happen again when they require land for their expansion? From TATAs perspective it is a complete betrayal in the sense that people of Singur were happy or at least pretended to be happy when the compensation was paid initially. I don't think there was any news on government suppressing an agitation initially when the compensation was handed out. This can repeat again right? That is something which will bother TATA even after they reaching a consensus here.

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Re: The Cheapest Car Ever Made

Postby Kothai » Tue Sep 09, 2008 6:36 am

prasen9 wrote:Standard negotiating ploy? Of course, Tata will not be happy with the deal because they want no iota of compromise and they want to get the maximum monetary benefit and convenience out of this.


Prasen9 as per news cahnnel govt. has agreed to return back around 400 acres (IIRC) . This means TATA has to move its investments in these 400 acres which is already under way (if the news channel are to be believed)..

Inbetween Mamta & co are shown as enjoying their massive victory..

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Re: The Cheapest Car Ever Made

Postby prasen9 » Tue Sep 09, 2008 7:50 pm

Sandeep, yes, this can repeat again, but, I do not think Mamata can come back in good faith after accepting a settlement. Maybe she can find some excuse to come back, but, chances are less. The trick is always to structure some financial incentives that make it in their interest for the plant to continue. That is why it would have been wise to propose a deal that in the next ten years, the farmers will be given a small amount as hardship pension every month as long as the factory is open or good jobs or something like that. Yes, unless the Tatas are assured by Mamata that this will not happen, they will go away. If Mamata and CPIM are not leading things then there will be some crazy guys doing some odd things but there will not be organized mass-scale projects.

Regarding labor, people are just flat-out lazy. It just galls me. I do not understand what satisfaction doctors get by coming to the hospital at 12pm when the time to report is 10am. You have seen Dada come out late for the toss, right? It may have been a brilliant strategy, but, chances are that it is the Bengali culture which thinks punctuality is optional. Of course, there are exceptions, but, by and large ... Then, they do not work. I have seen my relatives get out of home at 11am when they had to report to work at 11am and they live at least half an hour away. Apalling!

Kothai, the settlement is quite murky and nobody knows what it is. All we know is that they want to settle. If Mamata can claim victory and the Tatas are not hampered, then all power to all of them. Without claiming victory no side will back down. The settlement has to be resolved quickly and decisively. The ambiguity in the language on what will be returned has already caused confusion. By my reading, they did not commit to return anything.

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Re: The Cheapest Car Ever Made

Postby prasen9 » Sat Sep 20, 2008 10:52 pm

I think a skilled negotiator has to fold at a time when there is nothing better possible. I think Mamata's gang will not get much better a deal by prolonging it and there is a huge risk of a backlash at her political aspirations if Tata leaves. Buddha-babu has said as much. I think it is time to wrap up the negotiations and get things resolved. The little sympathy I had for some of Mamata's actions (not the violent kind, but, the supporting of cheated farmers), if she goes on dragging this long, that will evaporate. I do not matter, but, I suspect it will be similar with the Bangalis and other businessmen, especially, in Kolkata, where Trinamul does win some seats. It will then take some rehabilitation and time to get back the other panicked investors.

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Re: The Cheapest Car Ever Made

Postby Sandeep » Wed Sep 24, 2008 6:11 am

So, TATA has begun to move out of West Bengal. They have already packed their basic machinery and the Nano car will now roll out from Pantanagar of Uttarakhand instead if Singur!

Same here. I felt exactly as prasen, and knew this was going to happen. I was only unsure of how soon it would happen, and how much of delay and costs would be there. The script has gone exactly as expected by me too.


Jay and Prasen, I think the climax was completely different to what was there in your scripts :) . This is a sad sad day for West Bengal. Shame Shame Mamata!!

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Re: The Cheapest Car Ever Made

Postby jayakris » Wed Sep 24, 2008 1:55 pm

It seems like you were right, sandeep. I did not expect Mamta to go this far, really. Jay

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Re: The Cheapest Car Ever Made

Postby prasen9 » Wed Sep 24, 2008 3:35 pm

Yes, Sandeep, I must admit you were right. Mamata is really a shame. Buddhadev has also shown remarkable lack of negotiating skills. He should have gone to the farmers directly and taken them out of the picture, but, I guess they got brainwashed by Mamata to stick with her. I have given up. What a sad culmination of events.

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Re: The Cheapest Car Ever Made

Postby prasen9 » Tue Sep 30, 2008 2:37 pm

Rediff publishes some data points, here. I do not know how accurate they are, but, I think the landowners got about 18 lakhs per acre. It does say that the prices went up to 25 lakhs per acre from 3-5 lakhs per acre. Now, as atithee was saying prices change whenever projects were announced and it is difficult to find accurate pricing. If we look at the price before the move, then the prices were handsome indeed as PKB was saying. The funny thing is why the government did not offer land swaps at some other places where the price of land had not gone up by that much and 18 lakhs could easily buy an acre of land because it was substantially high. I thought I would post this, because, I was arguing on the basis of wrong information, based on prices in early 2007. That may not be a fair comparison. In retrospect, it does not look like this was a case of money as I had thought; it was more of a case of one bunch of people protesting against the use of eminent domain because they did not want to move and another bunch who wanted to politicize things for cheap gains. I hope the latter rot in electoral hell in the next elections. I am still queasy about the use of eminent domain as opposed to buying in the free market, but, if eminent domain is the last resort and the gains for the people are substantial, then maybe it is okay.

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Re: The Cheapest Car Ever Made

Postby Atithee » Tue Sep 30, 2008 3:45 pm

Prasen, there is only one rule in these things -- greed rules. Be it the landowners, or be it the politicos. To be fair, it includes the investors too; albeit, to a slightly less extent especially because they are (rightly or wrongly) convinced that their actions are likely to produce the most greater good. On the other hand, the other two parties know very well that they are holding out for more even though they most likely got a pretty good deal.

Having said this, I will guarantee* you that the project will stay put where it is. Do not believe this posturing.

* Suresh -- No, I don't have any inside information. :cool:

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Re: The Cheapest Car Ever Made

Postby prasen9 » Sat Oct 04, 2008 3:39 am

Sad day. Tata officially pulled out. I do not know what Mamata achieved in the end. Everyone lost.

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Re: The Cheapest Car Ever Made

Postby PKBasu » Sat Oct 04, 2008 4:15 am

Mamata will almost certainly lose Singur (a Trinamool constituency) at the next election, but probably gain quite a few seats in the rest of the state -- where disgust with the CPI(M) is running high, as it has gotten increasingly corrupted by three decades of power, apart from being unable to deliver any genuine improvement in living standards to match the rest of the country. Sadly, she is the winner from this pathetic drama.

I had a horrible sinking feeling as the final decision was announced today. This was an iconic project that has put India on the automobile map of the world. The tragedy of India's politics is that it has come to be dominated by small-minded professional agitators with little understanding of anything outside the slum or locality they come from. The CPI(M) was very much in this mould too (albeit with the sheen of an international ideology that was long discredited), but by the time they understood the process of industrial revival (after 25 years in power) they were unable to convince the new Luddites opposing them (and using their erstwhile tactics) of the meaning of progress. Bengal is doomed to another decade mired in depressing decline.

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Re: The Cheapest Car Ever Made

Postby prasen9 » Sat Oct 04, 2008 4:34 am

I don't know if she gained many seats, by preventing Singur, elsewhere. She would have got the anti-CPM vote anyway, or maybe you saying that the CPM's image would have gotten better if Singur functioned and she prevented that. It is really sad and gut-wrenching if that is so.


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