Case Study

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 ` 40 Lakh from ` 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.

Questions 1. Discuss the political and social factors because of which TATA has to
shift from Singur to Sanand.

2. 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).