Wednesday, 1 October, 2008

Tata Motors, Singur, Transparency, etc.

Tata Motors, Singur, Transparency, etc.

Recently I happened to read an article in Economic Times:

Normally, I expect ET folks to write stuff that is reasonable and fair. This article half-accuses the Tatas of

  • not being transparent
  • almost exploiting the WB government by getting land on terms which are supposedly very favourable to the Tatas, and at a great cost to the general public

Before I express my views on the matter, let me add a disclaimer - I've not invested in shares of Tata Motors & do not have any personal stake if Tata Motors were to gain something significant from their business dealings at Singur.

Now that the disclaimer is done away, here goes:

  1. Whenever any business house proposes new investments in a state, it asks for a basket of concessions in lieu of its commitments in terms of investments, employment generation, etc. There's no reason why details of a purely business agreement should be available in the public domain. It will certainly go against the business interest of the investor(s) vis-a-vis their business rivals. At the maximum, the details can be made available to the plethora of Audit teams that are bound to scrutinise all such deals at various levels, including any review committees of state / central governments, which can obviously include members from the opposition if appropriate. Why should the details be available to the general public??? Is it to enable the TV channels to gain TRPs or to improve the circulation of business journals?
  2. To claim that the concessions given by the WB government are unwarranted is perhaps within the bounds of tolerable limits - one can always argue for and against such concessions on behalf of the Government; But to blame the Tatas for the same is certainly laughable. Certainly, Tata Motors was not negotiating with a small scale industrial unit with 45 employees from Ambattur or Adityapur Industrial Estates. They were negotiating with powerful and highly educated officials of a State Government. Surely, one doesn't expect them to be bull-dozed or bribed into an agreement to the detriment of the state.
  3. If any reviewing authority finds that the terms are unduly and unfairly favouring the Tatas, it can be only due to inefficient negotiations or corrupt practices on the part of the negotiators. In either case, the negotiating team must be taken to task in accordance with the rules and norms for the same, instead of blaming the Tatas. After all, when one goes even to the vegetable market, if we try to bargain beyond a point, the "choota boy" at the shop asks us to take a walk!

Regards,

N


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