Gujarat's 'Nano' (Small) Wonder!

Tata Motors' revolutionary new car 'Nano' has changed the rules of the game in the small car segment not just in India but world over. What better reason for Gujarat to be proud of than the fact that the four-wheeler is being manufactured in Gujarat. And that it's a company owned by a Parsi-Gujarati. Hence when Tata's first Nano car rolls out of the Sanand plant next month, its bond with Gujarat will grow stronger. As this article is being written, rumors are rife that Tata Motors will launch the first car on May 1, which also marks the golden jubilee of Gujarat. This is seen as a symbolic gesture towards the administration that bailed the project out of controversy in West Bengal.

The entire credit for getting the Rs.2000 crore plant and the resultant boost to Gujarat's economy goes to the one and only, Mr.Narendra Modi, the proactive chief minister whose vision backed by efficient administration galvanized Tata Motors' decision towards shifting the project from Singer to Sanand. In a departure from the state's industrial policy, Gujarat rolled out the red carpet to Tata Motors and gave it incentives, including prime land, which used to serve as an agriculture and animal husbandry farm. Among other incentives offered include a soft loan at 0.1 per cent rate of interest and repayable over 20 years. With trial runs over, the company will manufacture 250 vehicles a day from next month. Company officials, however, remained tight-lipped about the launch date. Presently, 4,000 units of the world's cheapest car are being manufactured at Tata Motors' plant in Pantnagar in Uttarkhand, which also manufactures Tata's mini-trucks. The fully operational Sanand plant will be able to produce 250,000 Nano cars per annum, with possible expansion to take the figure to 500,000 cars a year. Tata Motors has delivered about 30,000 vehicles since July last year. The company got a total of 2.03 lakh bookings for Nano in May last year. The Tatas also have plans to build electric cars and CNG variants from this plant.

Sanand is located at a distance of 40kms from Ahmedabad. It was chosen because it is centrally located and is close to Rajkot as well as the port city of Mundra. Since most of the transportation of parts and components takes place through the sea, a port being close to the manufacturing plant certainly has its advantages. Gujarat emerged a better choice for logistical reasons and a satisfactory industrial and labor environment in the State. The state, like West Bengal, is well-connected by air, sea and land routes. Besides, the Delhi-Mumbai Industrial Corridor (DMIC) passing two-thirds through Gujarat and the proposed Special Investment Region (SIR) makes it even more attractive.

Modi made sure that Gujarat gave approval to the Tata Motors factory quickly and bagged the project. After the Singur controversy, Ratan Tata had indicated that the Tata Motors factory could move to the states of Maharashtra, Karnataka or Gujarat but it was finally Gujarat, which won the contest.

Sanand, did not have any problems related to agrarian land like Singur and hence Ratan Tata was ready to set up a plant there.

The Tatas inked a memorandum of understanding (MoU) in the form of a 'state support agreement' at the Sachivalay premises at Gandhinagar. And incidentally it was on the same day Modi was completing his seven years in office.

"This is an extremely momentous day for us. We have been through a sad experience but so quickly we have a new home. We now have a chance (to function) in a conducive and friendly environment," said a visibly relieved Mr. Tata while addressing mediapersons in the presence of Modi.

"Aapne aanhiya na chhiye (we belong to Gujarat)," Mr. Tata said in Gujarati while trying to trace back his roots to the state.

"You are stupid if you are not investing in Gujarat!" Mr Ratan Tata had said publicly while addressing a mammoth gathering of industrialists and businessmen at the 'Vibrant Gujarat Global Investors Summit' in January 2007 held in Ahmedabad.

Tata said that the group had opted for Gujarat because it had "already lost a lot of time (in the Singur controversy) and urgency was the need of the day." "We had an urgency to move to a new location." The chairman said that the 'reputation of Gujarat' and the 'speed' at which provisions were made, forced him to opt for Gujarat.

"The land we have been provided is well located, attractive and extremely central," Mr. Tata said while adding that the final decision to move to Gujarat was taken in couple of days.

"We are here to stay," he said. Beyond Nano, the Tatas plan to set up a research institute in agriculture and marine biology and an auto academy and put up ITIs (industrial training institutes) for the development of human resource needed for the plant.

On the occasion Modi said: "We are entering the automotive industry in a big way. I am not seeing this development as inflow of investments, but I feel that the coming of the Nano to Gujarat will begin a new chapter of partnership, which will propel the state in a new direction of growth. I welcome him (Ratan Tata). For me, this project entails nationalistic spirit."

The chief minister also related a 100- year-old incident, when Ratan Tata's grandfather, Jamshedji Tata had helped Gujarat by donating Rs 1,000 during a famine to save cattle.  "Aapne aanhiya na chhiye (we belong to Gujarat)," Mr. Tata said in Gujarati while trying to trace back his roots to the state.