India’s Development - Not the Tata Nano
Many of you have been ranting on my previous Tata Nano post about equal opportunity. I will go on record and synthesize my point of view here:
I have no problem if people own cars and don’t drive them. Rich or poor. If the car is a status symbol that they need to show off to their friends and neighbors, then there is no problem. There is also no problem with the Tata Nano’s usage in low-congestion areas, especially rural areas.
The “ban” will come in the shape of taxes and surcharges, tolls, etc. which will naturally weigh much more heavily on the middle class wallet than on the rich. The rich will just pay the tolls and continue to live their lives. The middle class, if they buy nanos, will have to keep their cars at home.
If you call that equal opportunity, well, be my guest.
I don’t call it equal opportunity.
That infrastructure needs to be built is absolutely true. However, the problem is extreme and concentrated urbanization, which I believe is a humongous problem.
Read these articles from this blog and elsewhere if you are truly interested in Equal Opportunity and Economic Development for India.
They discuss models like Microfinance and Microfranchise as mechanisms for development, not the Tata Nano. To me, Harish Hande is a much greater hero, SELCO an infinitely more important enterprise. Yes, rural development that is facilitated AWAY from the urban centers is of extreme importance.
If the Tatas can put together Microfranchise Taxi services that operate in remote areas using the Nano, I would embrace such programs with great enthusiasm.
Also read about the RISC model proposed by Atanu Dey, which spreads out urbanization, and prevents putting all the pressure on a handful of mega cities. Another piece on the same topic is Beyond Bangalore.
Here is a comparison of India’s development and that of China. Highlights issues such as Education, Water, Raw Materials, Electricity.
Finally, here is the story of a social entrepreneur, Tim Grandage, who is really making a difference where the rubber meets the road.
I do agree that the Tata Nano will add to congestion of the Indian roads. In all fairness to the Tatas, they are producing a car, which meets all the emission norms. Like it or not, several Indians buy second hand cars with bad emission standards & are perhaps polluting even more than a Nano would. Agreed that the government needs to provide infrastructure & they need do it quickly. But private enterprises cant be asked to stop providing alternatives or start building metros. I think the Nano is NOT an alternative to infrastructure, but an alternative to your smoky two wheelers , polluting taxis and second hand cars.
FYI
Karan Thapar gets together with Sunita Narain , Director of Center for Science and Environment and discuss related issue here
http://www.ibnlive.com/news/ratan-tata-will-be-a-hero-if-he-made-bus-like-nano/56973-11.html
Oh no !! Nano again !!!
If you take out Nano, this is a pretty good article on India’s development…
Just a point on urban congestion… there are multiple variables adding to the congestion.
Indian cities are growing at a frenetic pace. Take the case of Bangalore. Infosys alone adds close to 8000 folks annually to their Bangalore division. Put together intake by all other IT companies and you see the story. Bangalore’s population has doubled from 3.4 million in 1985 to above 7 million now. These rates of population increase would create problems for any city in the world. I agree that the Govt. could have done more, but lets give them a fair chance given the magnitude of the problem they are facing.
Infosys is planning to add a new center in Bangalore and it might intake 10,000 additional people for that center. It will surely add to the existing congestion. Should we disallow (or “ban”) Infosys from growing in Bangalore ? What about other IT companies ?? Should there be a freeze in recruitment in Bangalore till the infrastructural snarl is sorted out ?
Articles from Atanu Dey, which has been quoted, propose alternative and viable solutions such as the RISC model. Lets not waste time on Nano and the hype surrounding it and concentrate on solutions instead….
Couldn’t agree more. Infosys should go to a different set of cities for its growth. All IT companies should. In fact, this is an issue that doesn’t even require government intervention … Infosys and other IT companies should know that Bangalore is not a good place to grow anymore for all the reasons we have discussed from attrition rates, real estate costs, salary hikes, etc.
In fact, they should go set up shop in Indore, Kanpur, Siliguri, etc.
I agree with you that rich should be paying more in terms of taxes for expesive cars. We can clearly see India going towards a differential Road Tax based on price of car and city of registration.
For ex: Road tax and registration for a Honda City (cost 8 Lks)
Delhi 40,000
Mumbai 80,000
Bangalore 50,000
2nd tier cities ~ 20,000
for cheaper cars the amount is proportionately less. The above shows we are moving towards higher tax for cars esp in big metros.
The opportunity lies in:
a) Providing tax benefits to people who take public transport
b) Highly discourage multiple vehicles per family
c) consistently increasing taxes for vehicles priced at >5,00,000
Excuse me? I never said this, so you can’t be agreeing with me.
What you are proposing is a wealth tax. It has been tried in countries like France, with disastrous effect. Basically, all the entrepreneurs left France and went to Belgium. I believe, it will be an absolute disaster. Go study France under Chirac, Britain before Thatcher, and you’ll see some case studies of the dysfunctional systems they produced.
However, if you tax people based on emission, that would work. [Goal: control carbon footprint]
If you put congestion taxes, that would work. [Goal: control congestion]
I find the tendency of some of the readers towards penalizing the rich extremely dangerous.
When Atlas shrugs, you will not like the effect. Especially the middle class will hate the effect, since the ones taking the risks are not them. They want “others” to take the risk and create jobs for them … opportunities delivered on a platter.
There are many ways to improve congestion/urbanization and many including you have articulated that. Many of these (good wide network of roads, good wide metro type underground public transport, promoting satellite cities etc) are still not in place because the government cares only about the next election. Why should it have take so long for Delhi metro to be operational? Surely funds for something like this in the capital was not a problem.
Local opposition parties stall/cause delay in these projects because they hope that if they get such projects approved when they are in power, they will get a “piece” of it.
The heart of the problem is our inept, corrupt, myopic leaders. Want to know another reason why the Nano will not be banned? Because the very people who have the power to do that can/will be bribed to do otherwise.
Good clean governance will alleviate a lot of these issues we have. Banning Nano will send a wrong message to innovative businesses and not take care of the root cause of many of these issues.
Think it this way.
TATA is an automobile manufacturing giant which will keep on refining their strategies to sell more. They have got enough infrastructure and capabilities to sustain car manufacturing as low as 1Lakh.
They are in middle of a enormously big exponentially growing market which is going to be one of the largest consumer.
It is rich with people who want a car cant afford it right now… they may be a future customer of some lower end or second hand car.
They made it simple. Any capable organization would do the same. With current rate of increase in young riches, the congestion problem is inevitable what Nano would do is just to catalyze the process.
And why would TATA think of congestion when the cost could be a possible launch of something similar by competitors?
And what are the basis on which Indian government would ban it? I guess, they cant say that because they cant build enough infrastructure to run so many cars that you are going to sell, they are going to ban it.
Or ban it because it is too cheap.
All the issues that you told are concerned but the reality is Coke sells, people proudly use bags made of crocodile skin and many of us have single life… there is no reason why one would look at shining swiftly moving car splashing mud over him and his wife who are on their way to take their from school (they are already late because they were waiting the rain to stop) on their 1992 Bajaj Chetak - which was a thankful outcome of dowry system.
Polythene carry bags are still in use and Al Gore’s global warming curve is really depressing.
Ban Nano… I am sure that the problem you are talking about won’t be solved. At max, it would be delayed. We need awareness not Bandh.
-Nishant
typos: read as…
“take their children from school (they are already late because they were waiting the rain to stop) on their 1992 Bajaj Chetak - which was a thankful outcome of dowry system. And not buy one.”
nano is good… even better would be to allow the import of used cars from japan… because mobility makes money
infrastructure, ha, awaits the demise of corruption, or the contribution of industry (hosur road flyover to electronic city… thought the airport now three hours away, makes me laugh)
if you need banning as an action, i really think banning of the rich and upper middle class would be of the greatest service to the poor, or, as you seem to like taxation, tax them to the hilt … it is ridiculous, of course, but so is stopping innovation….
tata’s next car is the the (compressed) air car, google that if you don’t know about it… and india will be exporting that around the world …
innovation, internal consumption, exports, india will fly, the new generation should not be impeded in any way, let them be proud of the nano, buy, it use it, solve the problems it creates…..
john galt says “go nano”
Sounds like they need zipcars in India’s urban centers. Shared usage through privately-owned or communally owned vehicles will make vehicles available for all of the above mentioned needs at a fraction of the cost. Paying for fractional ownership or rental is a way to share the cost of full purchase price, tax, parking and insurance (if available and customary) over many more families. Of course toll costs will still apply independent of ownership structure.
This may be a huge opportunity for a forward-thinking entrepreneur to start a car fractional ownership/rental business, possibly modeled on the zipcars.com in the US. Even in areas with great public transportation and infrastructure like New York, zipcars are widely used. Through fractional usage models, occasional use of a newer bigger car actually costs much less than each family owning a small inexpensive, or old, less reliable used car. Zipcars does best in urban centers where population density drives up the cost of owning cars, and provides lots off potential users of service.
In rural areas, community co-ops could buy vehicles for shared usage in a similar model. Both private and communally owned shared ownership/usage of cars will make vehicles available to the greatest number of people efficiently and have the least impact on traffic and infrastructure as well as family budgets.
OK> Let me recall Gen. Mush-a-ruff’s only sensible statement to date ‘ west suffers from intellectual arrogance ‘. Few articles do really proves his point.
As a ‘Great(Mahan) Indian(Bharatiya)’ here is what we will do -
Burn as much gas we can - lets bring all V8,V12 trucks in Indian road, bring more harleys and gas guzzlars - anyway why should we are for mother EARTH while other children are not caring and we alone can’t save her.
And anybody who is suffering from the above difficulty, pls continue writing in blogs
Well, lemme keep it simple; ask Mr. Harish Hande who is his Hero
BTW, whoever seeing from this angle, India’s Dev = Nano is totally wrong!
~sukhoi
I think we should know the truth about tatas “glorious” past before we “judge” this “noble” venture
http://www.bhopal.net/tata_rapsheet.html
See the ugly face of tata. This is not a communist attempt nor a competitors mudslinging website. These are Bhopal gas tragedy victims and supporters who uncovered the truth about TATA when TATA started to support the DOW company and hinder the process of the Clean of Bhopal tragedy.
A company with such an ugly track record(from murdering tribal to supporting the British Raj in pre-independence days and all their mines were aquired illegally from tribal lands during the British raj no questions asked) could never do something without a profit motive.
As far as I see the statistics of the car, i don’t think it is an engineering marvel. It is stripped down car . I am sure the competitors will prove this point, as anyone can easily churn out a 625cc car for 1 lakh.
A kind gesture would be manufacturing a car just like a maruti 800 or Indica for a Lakh. As a top level car engineer and they will tell you that a maruti 800 manufacturing cost is less than 40000 rupees. It is the taxes and the then ofcourse the profit margin(which is a minimum 60% for any corporation not only cars but food, fmcg etc) that bring the price up. Then ofcourse the multicrore advertising budgets.
If Tata had decided to keep a profit margin of 20% and get the govt. to tax the car less,(of course taxes are less if you keep a less profit) then they would be doing a great thing.
Here the TATA is also keeping a 60% profit margin if not more so there nothing special to it.
Guys Tata’s are not here for social service. They aren’t Robin Hood. They introduced this car only for one purpose i.e. profit. Personally I love that car, but it’s purely mass/profit oriented concept. (Few years back Reliance Introduced their mobile service with same concept [‘mera sapana sapakepass ho mobile apana’ :)]). I am not blaming them; they are just doing their business. They are GOOD.
Now according to Tata this car is developed as a replacement for bike/scooter.
Now as per my knowledge:
So question is should we start spending on roads or should we spend for better public transport?
The problem is that we pretend to be separate and unique county + culture, but we aren’t. We are just copycats, no offense but that’s the truth. Now this time we are directly copying western model of cars i.e. every family member should own at least one car. But do we really need that? Government is spending huge sum of money (our money) in development of bigger and better roads, but at the same time they are scrapping out many public transport systems. Here government indirectly forcing people to use their own cars instead of public transport. It seems that car/bike manufacturer lobbies filling pockets of our politicians. (I live in Pune; here you will find more auto-rickshaw per K.M. than anywhere in the world. Pune has very bad/corrupted public transport system, once upon time it was great).
I think government should not give subsidy to any car manufacturer instead use that money for encouragement of public/private transport e.g. government reduced excise duty on bikes and cars this year (India Budget08). We don’t need subsidy instead of that they could have used that money somewhere else. If your product is good people will buy, that’s for sure.
I don’t support or oppose ‘Nano’. But just think about very basic problems that it creates. More cons than pros. Do we need Westernization? I think we should have better public transport system like European countries or china. They encourage people to use bicycle for small distance and cheap public transport for long. This strategy saves the fuel and the money, indirectly keeps inflation rate low. Also it makes our ecosystem/surrounding healthy.
Increase bus/rail/metro-rail frequency, provide better facilities. I know this task is quite difficult for government but take a look at that article where an IAS officer changed public transport in Indore with help from private sector.
Seriously speaking some comments are really vague and pointless. Don’t show your patriotism in justification of something which can’t be justified.
Finally guys Nano or any other personal car is not for poor India but I think it will make OUR India poor.