LEGAL ELEMENT
West Bengal's Nano Impasse: A Roadblock for Tata
The slogans on signs in Singur -- the West Bengal site where Tata Motors plans to manufacture the Nano, its $2,500 small car -- say it all. Most are in Bengali, but the few in English capture the overriding sentiment. "Nano No No," reads one. "Atta not Tata," says another. Atta, which is flour made from whole wheat, refers to the core question of the dispute: Should fertile farmland be requisitioned for industrial purposes? Does food get priority or factories?
According to faculty at Wharton and the Indian School of Business, the impasse over the plant in West Bengal threatens to increase the Nano's production costs and could delay its entry into the domestic market. Moreover, they say, it will likely impact investment in the region, as outside companies shy away from antiquated land laws and political disruption.
As things stand today, work has been suspended at the Nano plant. Tata has closed shop because, as chairman Ratan Tata told journalists in Kolkata (formerly Calcutta): "I can't bring our managers and their families to West Bengal if they're going to be beaten, if there is going to be violence constantly, if their children are afraid to go to school."
Tata has faced trouble ever since it got the go-ahead for the plant on May 18, 2006. Just a week later, there were angry demonstrations by farmers objecting to the "forcible" acquisition of land for the project. The Trinamool Congress, a political party led by Mamata Banerjee, who has been spearheading the agitation against the Left-ruled West Bengal government and the plant, even staged a hunger strike.
Matters came to a head recently, with the Nano due to roll out in October this year. On August 24, the Trinamool Congress started an indefinite protest at the factory gates and stopped all access to vehicles. On September 3, Tata suspended