El Nano: A Perfect Storm
Arvind Panagariya: Although land acquisition for the Singur plant by West Bengal was well within the law, its approach was heavy handed and lacked transparency.
Abstract: A set of weather events that individually give rise to only a mild to moderate storm turn deadly when they occur simultaneously. The result is what meteorologists call a "perfect" storm. The Singur tragedy is such a storm caused by confluence of an aggressive corporation, a zealous government and an opportunist politician.
Until recently, it was a mystery why Tata Motors had chosen West Bengal, a state with a Marxist government, as the site for manufacturing Nano. Partial revelation of a tripartite agreement, signed by Tata Motors, West Bengal government and West Bengal Industrial Development Corporation (WBIDC) in March 2007, has now provided the explanation.
Seeking to maximise profits, Tata Motors went on to pit the states of West Bengal, Uttarakhand and Himachal Pradesh against one another when choosing the production site for Nano. The ensuing competition produced the most lucrative deal for the corporation. The West Bengal government not only agreed to award it prime location at Singur, a town just 30 miles northwest of Calcutta, it also sweetened the pot with subsidy on land, concessional power, a soft loan and gigantic tax breaks.
Until recently, it was a mystery why Tata Motors had chosen West Bengal, a state with a Marxist government, as the site for manufacturing Nano. Partial revelation of a tripartite agreement, signed by Tata Motors, West Bengal government and West Bengal Industrial Development Corporation (WBIDC) in March 2007, has now provided the explanation.
Seeking to maximise profits, Tata Motors went on to pit the states of West Bengal, Uttarakhand and Himachal Pradesh against one another when choosing the production site for Nano. The ensuing competition produced the most lucrative deal for the corporation. The West Bengal government not only agreed to award it prime location at Singur, a town just 30 miles northwest of Calcutta, it also sweetened the pot with subsidy on land, concessional power, a soft loan and gigantic tax breaks.