Académique Documents
Professionnel Documents
Culture Documents
Did Tata make mistake by believing in West Bengal Government's assurances of smooth business operations? Are
they making same mistake in accepting Gujarat government's invitation to relocate in their state? Why? Why not?
When Ratan Tata stated his vison for the lowest priced car[2] in the world, multiple state governments invited Tata
Motors for setting up manufacturing plant in their states. States envisaged industrial growth and offered special tax
exemptions and other incentives.
Tatas decision to accept West Bengal governments invitation in 2006 and later Gujrat governments invitation in
2008 can be examined by appropriateness in parameters mentioned in the table below:
Land is a state subject under constitution of India. Though each state has its own set of regulations, fundamental
problem is with the land acquisition process outlined by land acquisition Act, 1894 and 1984[1]. The process has
huge scope of interference from middlemen and corrupt politicians because of which farmers are most of the time
under-compensated for their land, resulting in agitation and unrest. Given the nature of the law existent in 2006 and
2008, there were always chances that whichever place Tata might have chosen, some set of farmers would have
been affected. Moreover, Tata, being a company known for its contribution towards Indian society, has moral
obligations to not let farmers affected because of their business.
The state governments track record and
political environment of the state help in VA LU E O F F E R E D C O M PA R I SI O N
identifying whether the government has
W.B. in 2006 Gujarat in 2008
successfully dealt with such issues in past
with collective and consensus based
negotiation with all stakeholders in business
and society.
Hence, Tata Motors did make mistake in believing West Bengal governments assurance and they are doing the
right thing in accepting Gujarats government proposal. However, they should first strike a consensus with farmers
before getting into project setup.
[Word count: 450]
[1]
Laura Alfaro, Lakshmi Iyer, Special Economic Zones in India: Public Purpose and Private Property (A), HBS
[2]
Laura Alfaro, Lakshmi Iyer, Namrata Arora, Tata Motors in Singur: Public Purpose and Private Property (B)
BGS Case Anurag Khandelwal 1611009 Section A
Has the SEZ policy been a good development strategy for India? Why? Why not?
SEZ Act of 2005 was notified in backdrop of following challenges faced by businesses, government and society: