H & G H M Institute Of Management.

Topic: Tata Nano Shifts From West Bengal To Gujarat Subject: Project Management

Submitted By : Ashwini Mahale - 33 Trupti Malgaonkar - 35 Kalpita Pitale 46

Submitted To: Prof. Diya Udasi

Reasons for shifting Tata Nano from west Bengal to Gujarat

The main challenge of Nano plant in Singur was the land acquisition. The difficulty of land acquisition in India is due to two factors i.e. The type of land to use & the population density over it. According to the land acquisition act, 1894 there are various issues, which became the barriers in the process of acquiring the land by the state government for Tatas The choice of Singur was made by the company among six sites offered by the state government. The project faced massive opposition from displaced farmers. The unwilling farmers were given political support by West Bengal's opposition leader Mamata Banerjee. In Singur there are more than 1100 land holdings and out of it total 6000 families were about to suffer from this land acquisition. The Project was to be spread over 700 acres with another 300 kept aside for ancillary production. Banerjee's "Save Farmland" movement was supported by celebrity environmental activists like Medha Patkar, Anuradha Talwar and Arundhati Roy. The Tatas finally decided to move out of Singur on 3 October 2008. Ratan Tata blamed violence by Banerjee and her supporters for the pullout decision. On 7 October 2008, the Tatas announced that they would be setting up the Tata Nano plant in Sanand, Gujarat.

Reason for selecting Gujarat:

Gujarat is one of the few states to have substantially higher private sector investment than public sector investment. In case of Nano shift, Narendra Modi, Chief Minister of Gujarat made it clear that Nano project is a feather in his cap. The credit needs to be given to Modi for the involvement and speed that his administration demonstrated in bringing the car project to Gujarat.
It has relatively peaceful Industrial relations climate.

Relatively untouched by projects over acquisition of farmland for industry. It has thriving entrepreneurial culture and SME clusters.

Benefits to the state from the shift: 1. Benefit to Component Manufacturers and vendors: Due to this shift some small-scale industries i.e. Manufacturers & suppliers of car components will save about 16 lakh rupees per month as Transportation charges. The vendors in Gujarat will also be benefited by it, as they can save 2% C.S.T. on the components. Earlier the vendors had to pay Rs. 4-5 per Kg. As transportation cost. Now due to the plant in Sanad, vendors will have to pay only 0.50 Rs. Per Kg. 2. New Investment Opportunities: Tatas move to Gujarat has given a perception about the state as an investor friendly state it will attract to even further investment. Although Gujarat was not keen on providing concessions to industry, it made an exception in the case of the Tata Nano project, given the competition between the states to grab the prestigious project and the opportunity to create a good investment climate in Gujarat. 3. Benefit To Real Estate Market: Soon after the Nano project moved to Gujarat, the land prices increased there to an all time high with a 200 per cent hike in just one fortnight. The land prices in Chharodi have gone up to rs. 8-10 lakh per bigah from Rs. 3-4 lakh per bigah. In Sanad the land prices increased as Rs. 3000 per sq. Yard from Rs. 2500 per sq. Yard. By this also the investors will not hesitate from entering in Gujarat. Prices have also risen in surrounding areas like Nal Sarovar due to speculation that the Tatas may build residential colonies for their employees and vendors. 4. Additional Jobs & Training Opportunities: Apart from the Nano plant, the Tatas will also build a research institute in agriculture and a marine biology institute, beneficial for Gujarat and lead to further development and growth in the state. The Tata Nano project is estimated to provide 10,000 additional jobs in the state.