The road to Gujarat

Chief Minister Narendra Modi with Ratan Tata, who was in Gandhinagar to sign an agreement to set up the Nano plant in Gujarat, on October 7.-PTI

The Tatas retrograde decision to shift the Nano to Gujarat must not be allowed to be used to obliterate the blemish of the state-sponsored carnage of Muslims.

FROM Singur near Kolkata to Sanand near Ahmedabad is a long distance to traverse politically as well as physically. By deciding to shift the Nano car factory to Gujarat in response to the protests over land acquisition in Singur, the Tatas have sent out a clear message: they are unconcerned about the social and political consequences of their action; what is of paramount importance to them is the guarantee of smooth implementation of the car project in Gujarat under Narendra Modis stewardship, and its profitability.

Ratan Tatas unforgettable distinction between the bad M (Mamata Banerjee) and the good M (Narendra Modi), and his confidence in the latters leadership seem to be the main reasons why he preferred Gujarat over alternative sites and competitive concessions with which many States courted him, including industrially developed Maharashtra, fast-growing Karnataka and Andhra Pradesh, and backward Uttarakhand.

As Ratan Tata himself put it, the terms Tata Motors is being offered in Gujarat are even better than those in West Bengal, where it got handsome incentives, including full exemption from excise duty for 10 years, and exemption from income tax for five years, and land virtually at throwaway prices. According to former State Finance Minister and eminent economist Ashok Mitra, these concessions and subsidies add up to Rs.850 crore, or roughly half the cost of the project.

In addition, there are also what Ratan Tata calls the intangibles available in Gujarat such as a peaceful industrial climate (assured by Modis labour policies), good infrastructural backup, policy continuity, Sanands location close to the planned Mumbai-Delhi industrial corridor, and stable law and order (however this might be defined under a thoroughly authoritarian and communal form of governance).

Ratan Tata plumped for Gujarat and spurned West Bengals offer to improve further on the terms, as well as privately suggested formulas, including a modest annual land royalty equivalent to one-quarter of 1 per cent of the annual sales of the Nano, or enhanced compensation for land in Singur by raising the price of the promised one lakh-rupee car by Rs.10,000, which would have made the project more palatable to landowners and sharecroppers.

Ratan Tata cannot of course be blamed for behaving like any other businessman. But the trouble is that the House of Tatas is seen as an enlightened industrial group driven by considerations larger than profit. As his admirers, including commentators who have gone gaga over his decision to move to Gujarat, claim, Ratan Tata can do no wrong. Indians believe in him so completely, so totally, that if he were to contest an election from virtually any constituency hed win hands down.

Breathlessly exuberant as this judgment is, it may not be sound. Ratan Tatas father Naval Tata, also a public figure, but perhaps better liked than him, lost an election he contested as an independent in 1971 from Mumbai South to a relative novice, N.N. Kailas. But it does show how highly the upper middle-class elite think of Ratan Tata. It also speaks of the mystique that surrounds Nano. The elite regard the car as a great managerial and technological achievement, and as something which represents Indias pride in itself.

However, as this column (Frontline, February 15) has argued, Nanos achievement is yet to be demonstrated. Whether it meets contemporary safety standards and emission norms while retaining the Rs.1 lakh price tag remains to be seen. The car may turn out a major contributor to traffic nightmares in city after city, promote rampant consumerism and profligacy, and eventually become a social and environmental liability, not an asset.

But let that pass. What is central in Ratan Tatas decision to move the Nano factory to Gujarat is its implicit endorsement of Modi as a dynamic and efficient, no-nonsense, pro-business leader, a validation of what the Bharatiya Janata Party celebrates as the Gujarat model of development and, above all, as sanctification of Modis communal and divisive politics.

In effect, the decision will be interpreted as a signal to whitewash and forget the post-Godhra massacre of 2,000 Muslims in 2002, planned and sponsored by the state, which was a grievous assault on secularism and democracy, and the worst carnage of its kind in independent India, from which Gujarat has still not recovered.

Ratan Tatas endorsement of Modi must be seen as the culmination of a long process of the Indian industrialist class gradually caving in to and reconciling itself with Moditva and helping erase the memory of the Gujarat pogrom. In some ways, this caving in was worse than the behaviour of the captains of Indian industry during the Emergency when, it was famously said, they were so eager to ingratiate themselves with Indira Gandhis undemocratic regime that when asked to bend, they crawled.

After more than a decade of economic neoliberalism, which was supposed to reduce their dependence on politicians, one might have expected industrialists to distance themselves a little more from the government of the day. Such expectations were rudely belied soon after the carnage.

To start with, the Confederation of Indian Industry (CII) raised an alarm about the anti-Muslim pogrom and the impact of the breakdown of the rule of law on the investment climate. CII director-general Tarun Das, considered a liberal, personally took this initiative. Not just Modi, even the National Democratic Alliance government at the Centre, boycotted and blackballed Das. The CIIs access to officials and Ministers the key to its function as an interest-group and lobbying organisation was cut off. Das flew to Gujarat and apologised to Modi.

Within the CIIs western India chapter, no more than three business leaders HDFCs Deepak Parekh, Thermaxs Anu Agha and Airfreights Cyrus Guzder spoke out between June 2002 and March 2008 on the carnage and Modis role, and on the need to heal wounds. Remarkably, all three are Gujarati speakers, but none of them lives in Gujarat. No Gujarat-based businessmen gathered the courage to support them publicly. Some helped the victims with food and clothing, but did so anonymously. Hardly any third or fourth-generation business family publicly participated in relief activities in Ahmedabad and Baroda. None of the heroes of Gujarats recent business success stories thought the carnage merited their attention.

That was shameful enough. But what happened in Mumbai in January 2003 was even more abominable. The CII organised a huge felicitation for Modi, entitled Gujarat Unlimited. This was more than the usual interaction between a Chief Minister and businessmen (who waited a good 90 minutes for Modis arrival).

It was an occasion to kowtow to and glorify Modi for his dynamism and vision, without even a remote hint that anything had gone wrong less than a year earlier. Das converted the regional event into a national one and celebrated the love affair between Gujarat and business.

Leader after industry leader extolled Modis virtues. The sole protesting voice was that of Jairus Banaji, a social scientist and activist of a Mumbai coalition, Insaaniyat, some of whose members had smuggled themselves into the hall despite strictly regulated entry. Banaji heard Modis 45-minute speech and patiently waited his turn to ask a simple question: How can you talk of a better economy when there is no justice for the thousands of innocent citizens who were killed in cold blood? You have blood on your hands, Mr Modi. Banajis question remains valid to this day: What is the meaning of Modis promise of a modern, forward-looking Gujarat, in which profit-lines get fatter, but citizens are burnt to death?

How can anyone talk about progress and development in Gujarat Unlimited without a reference to the worst carnage since 1947? Why did not the business barons present at the event feel emboldened to ask questions about the rule of law in Gujarat?

The list of business tycoons present read like a whos who of Indian industry: A.M. Naik of Larsen & Toubro; Narottam Sekhsaria, the cement baron; Prashant Ruia of Essar; P.P. Vora of IDBI; Chintan Parikh of Ashima group; Pradip Madhavji of Thomas Cook; Nimesh Kampani of JM Morgan Stanley; Maitreya Doshi of Premier Automobiles. Some gratuitously and cravenly apologised for Modi, saying the carnage was only a storm in a teacup.

The CII event was even more regrettable than the presence of a galaxy of businessmen at Modis ostentatious swearing-in around the same time. Their presence might be considered an expression of their personal closeness to Modi. But the Mumbai event was an institutional initiative taken at the CIIs behest to express business solidarity with Modi, despite the carnage and the subsequent election campaign. The interaction, with a businessman demanding the privatisation of profitable fertilizer companies, and Modi promising high profits, was collusive.

The CII is supposed to represent Indias most modern, globalised, extrovert and technologically savvy companies, many of them allied to multinationals. Unlike the protectionist Federation of Indian Chambers of Commerce and Industry or the Associated Chambers of Commerce and Industry of India, it advocates free competition and liberalised entry for foreign capital.

The CII is also the chosen instrument of the United States Agency for International Development and conservative Western non-governmental organisations to promote democracy plus free markets in India. By legitimising and applauding Modi, the CII showed what kind of contribution it wanted to make to democratisation.

Since 2003, Modi has been increasingly normalised in the eyes of Indian business. By last year, Ratan Tata was lavishing praise upon Modis leadership by saying, You are stupid if you are not in Gujarat. Now, he has put the final seal of approval upon Moditva by relocating the Nano plant.

The modernist, progressive pretensions of globalising capital sound hollow in the light of the Gujarat experience. Big Business has shown no particular attachment to democracy, elementary justice and even the rule of law so long as its own narrow demands (for instance, subsidies and privatisation) are met and the government maintains some minimal infrastructure.

Big Business is taking a myopic view of things. Surely, in the long run, capitalism needs the rule of law, constitutional rights, and inclusive democracy. Without these preconditions, it cannot hope to acquire the bare essentials of social legitimacy. People like Modi will totally undermine that legitimacy just as Hitler and Mussolini did.

In Germany and Italy, industrialists allied themselves with extreme Right forces, because these alone could crush the Left, which threatened the bourgeois order. But once the Left was vanquished, the fascists turned on businessmen too. Even rich Jews who had financed them were not spared. War, destruction, economic collapse and mass misery followed.

Indian business has never taken a universalist, socially responsible view of its role, nor shown much commitment to liberal values, except perhaps during the early 1940s, when it drafted the Bombay Plan. It at best limits itself to charity and some tokenist acts of corporate social responsibility, barring a few exceptions. The seamy, sleazy side of Indian business with its crony capitalist character, prevalence of tax evasion and money laundering, and use of rapacious labour practices, including sweatshops, child labour, and casual, insecure employment, remains unreformed. As do its low ethical standards.

Associated with this lumpen, footloose capitalism is a business class without strong commitment to developing a mass-scale home market. This is not a forward-looking social group or an agency for progressive, democratic change, but a bulwark of privilege and conservatism. The business elite must reform themselves, if they want to be part of a democratising, liberal process of change.