Compassionate Tata


Ratan Tata, the scion of a prominent business family of India, appears to be a very compassionate man. Just like the prince of Kapilvastu, who renounced his kingdom and all the earthly comforts and wandered in search of a way out of human miseries arising from sickness, old age and death, Ratan Tata, too, became perturbed when he saw an average middle class man riding a bike along with his wife and two kids uncomfortably, without any protection from heat, dust, cold, rain and, above all, fatal accidents, notwithstanding the fact that India was one of the fastest growing economies of the world. In India’s capital, Delhi itself, every year around 1800 people perish in road accidents, one-third of them are bike-riders. As compared to this, only 5 per cent car passengers lose their lives. Thus, Ratan Tata concluded that once a cheap model of car is brought in the market, most present day riders of bikes would shift to it and they would be able to travel safely and comfortably without being troubled by heat, dust, cold and rains. It would be, indeed, a great service to the nation.

There was no stopping this determined man whose name has been touted by a TV channel for Bharat Ratna, the highest civilian award of the country. He mobilised scientists and engineers to help him realise his dream. After continuous devoted work, his team of researchers could bring in the model of ‘people’s car’, named Nano. It may be very small, but it will go a long way to make the life of an ordinary middle class family more comfortable and safe. To quote Tata, India’s ‘People’s Car’ will be a “safe, affordable, all weather vehicle for a family which is today travelling on a two wheeler.” Its price will be Rs 100,000 or slightly more than $2,500. The American news magazine Time has termed it as “a revolutionary price where the average lower middle class income is $200 a month.”

It went on to describe the Nano car as “a cute, short thing, with four doors, tiny wheels placed out at the four corners of the body and what looked like plenty of room inside. The Nano has just enough space for a briefcase or small bag under the hood. The engine—all two cylinders, 624cc and 33 horsepower of it—is in the back, just like the Volkswagen Beetle of old. The speedometer and other instruments cluster in a central pod in the middle of the dashboard rather than directly in front of the driver, the easier (and cheaper) to offer both left- and right-hand versions when Tata Motors starts exporting the car to Southeast Asia and Africa in a couple of years. The top third of the over-sized headlights act as the turn signals (indicators) and look like cheeky yellow eyebrows above the main lights. It has a top speed of 60 miles per hour.” It will be very economical because it will cover 25 kilometres on just one litre of petrol. 

Tata thinks, there may be people who call it a toy, “but if you consider the value proposition I think the car is great.” He hopes, “Nano will help millions of poor people around the world—the “Bottom of the Pyramid” in developing world marketing-speak—switch from two wheels to four.”

The media, both print and electronic, has sung great hymns in the praise of Tata and his innovation. A prominent Hindi daily, owned by the Birlas and edited by a literary writer, is ecstatic and has come out with the headline “Tata ki Nano ne naian hi nahin, dil bhi churaya hai” (Tata’s Nano has stolen not only eyes but heart too). The editor has praised Tata to skies and has exclaimed: what a charisma! Sanjay Dutt, a leading film actor, and Rahul Gandhi, the Congress prince are mesmerized and are eager to acquire it. The editor has taken to task the people who lack enthusiasm in welcoming this great achievement by Tata.

It seems the editor has no knowledge of history. To illustrate this, let us go back to 1719-20 when a British swindler, John Law, lured the Parisian population with his the Mississippi Company, opening before them the prospect of becoming fabulously rich overnight. The crowd that thronged his office was not only much, much bigger than that which came to the exhibition ground in New Delhi and included fashionable feudal lords and ladies in plenty. What happened ultimately has been recorded in detail in both economic history books and fictional writings. This year the 150th birth anniversary of Thorstein Veblen is being celebrated and his The Theory of the Leisure Class is being read and re-read to understand the phenomenon of consumerism in the present era of globalisation. Economists know, the attraction towards Nano is an example of “band wagon” effect, whereby the lower classes are trying to ape the lifestyles of the upper classes.

Tata’s Nano car, in spite of all the praises showered on it, will not run on water or air. It will also require petrol, though the consumption will be lower as compared to other cars. The people switching from two-wheelers to Nano will have to spend more on petrol. Consequently, the total volume of demand for petrol will go up substantially. Indigenous output of crude as proportion of the total volume of crude needed to meet the demand for petrol will go up. Obviously, India will have to import increasingly greater amounts of crude. In the international market, the trend of crude price is upward. It has already touched $100 per barrel. Though it has, at present, come down marginally, experts forecast that in next five years, the crude price will be around $150 per barrel and by 2020, it may cross $200 per barrel.

If this is so, how will India meet its increasing import bill for crude? There are two ways. First, India must increaser its export of food grains, vegetables, fruits, milk products, etc to oil-exporting Arab countries. Second, it must divert the remittances of Indian workers abroad to financing the import of crude and curtail the import of  many essential items. In both cases, common people of this country will suffer directly or indirectly. There is another alternative of reducing the import of crude by producing indigenously more and more ethanol. Already, a beginning has been made.

In America, Europe, Brazil and elsewhere ethanol is being produced from maize, sugarcane, rapeseeds, sunflower seeds, etc. In our country, sugarcane and maize will be used for ethanol production. Sugarcane producers in Bihar and UP have been suffering from the closure of sugar mills, and difficulties in delivering their output and realising their dues from the mills. They will be too willing to produce more sugarcane for ethanol manufacturers. Land from the cultivation of rice, wheat, pulses, vegetables and fruits will be diverted to cater to the needs of ethanol manufacturers. If the experience of America, Europe, Brazil, etc. is any indication, the total supply of food grains, pulses, edible oils, vegetables, fruits, milk and milk products will be falling short of the volume of demand and the people at large will have to bear the brunt of the rising prices.

Speculation in commodities market will further push up the prices. The Government of India has permitted forward trading in agricultural commodities and this will help both domestic and international speculators to manipulate prices and the shadow of the Chicago Commodities will loom large on Indian food grains market. According to the Director-General of the International Food Policy Research Institute, all over the world there was a thirty per cent rise in speculation food grains in 2006. India will be one of the major countries to be affected by rising speculation. As is known, pulses are the major source of protein for the overwhelming majority of the people. The growing shortage of pulses has pushed the average price of pulses by four thousand per cent since 1967. At present, no variety of pulse is selling for less than Rs 40 per kg while in 1966-67 it did not cost more than one rupee per kg.

Nobody doubts that the sale of Nano will increase rapidly and it will make the Tata Motors gather huge profits, yet it will have far reaching implications for the society. Traffic jams will get aggravated because of narrow roads, lack of proper and timely maintenance, encroachments by shopkeepers, mobile vendors, religious outfits and others and gross violations of traffic rules by private commercial vehicles such as buses and lorries. Quite often one finds these commercial vehicles racing on roads or stopping wherever they like to pick up passengers and business. With Nano cars entering the roads, their owners will quite often lose patience when their speed is slowed and they are detained inordinately by traffic jams. It may lead to the exchange of abuses and scuffles, sometimes bloody ones. The incidents of rash and drunken driving have been on the rise and many a life has been lost. There are solid reasons behind this. First, traffic police is in the grip of corruption. Why should not a traffic constable extort when he has got the job after paying a bribe ranging from Rs 3 to 400, 000 and he has to recover this amount and earn something extra? If the person indulging in rash or drunken driving belongs to a wealthy or politically influential family, nobody dares touch him. Look at the notorious BMW case and it will be crystal clear. Second, in India in general and in Delhi in particular, if somebody possesses a driving licence, it does not necessarily mean that he knows how to drive and is familiar with rules of traffic. If one is prepared to cough up money, one can get a driving licence delivered to his house, issued from anywhere in the country. Fines have been enhanced for the violation of traffic rules, but without any impact. In spite of some seeming alertness on the part of traffic police, which has been mainly for the consumption of the media, no impact has been seen. Yes, the rates of bribes by the traffic police have gone up, perhaps to mitigate the rising impact of dearness on their nominal earnings!

Last year, 15,00,000 new cars came onto roads. In Delhi alone, 650 cars daily entered the roads, raising the total number of cars in the city to 54,00,000 while the population is only 16.5 million. By the end of the next two decades, the number of cars will rise five fold. This is certainly going to aggravate the parking problems in public places and in the streets and lanes of the colonies. Already, quarrels are witnessed daily for extremely limited space for parking.

With the entry of the Nano car, the problem of pollution is bound to get aggravated. Whatever strict norms may be enforced, they cannot be implemented when there is rampant corruption in the enforcement agencies.

Of course, Tata will pander to consumerism and gather huge profits because there is a great scope for increasing the sale of Nano. At present only 12 out of 1,000 Indians own a car as against 765 for every 1,000 Americans. Here a very pertinent question has been raised by The Los Angeles Times (January 18): “What happens if, through a combination of its incredibly rapid economic growth and innovations like the Nano, India’s car-ownership ratio hits that of the US? That would put 864 million cars on India’s roads, more than 3.5 times the number in the US.”

The way out in India is the fast development of an efficient and dependable public transport system. But now it is too late and, keeping in view the class character of the people in power and the growing dominance of consumerism, it is next to impossible.

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