Bengal out, Karnataka in, Nano on track

West Bengal loses and Karnataka gains. After the fallout of west Bengal’s talks with Mamatha Banerjee, Tata motors has no choice but to look for alternatives. They initially thought of rolling 1000 nanos from their Pune plant. That would not be sustainable as there would be demand supply mismatch. So they have to look out for alternatives. I wouldn’t blame them.  A lot of states jumped (rumored) in to provide the land of  1000 acres. But, things did not materialise.

Finally, Chief Minister of Karnataka BS Yeduriyappa has made a statement that if Tata is willing to come to Karnataka he can allot the land. Bingo said Ratan Tata. Though nothing is finalized yet, the probability of Nano coming to Karnataka is pretty high. Karnataka (Bangalore + Mysore)  has a prominent place on the world map for its software exports. Bangalore (Benguluru) is dubbed as the silicon valley of India. Other than that people do not know much about Karnataka. Many people have criticized that Karnataka’s software exports are skewing the progress and stiffling other sectors. Now those people can have some solace in this recent development.

It would be a matter of pride for Karnataka to roll out the world’s cheapest car. The whole world is waiting for it. This is the first big improvement or step taken by the government in the past 4 years. The reason for this is stable single party government. Earlier they were too busy keep the coalition government in tact.

This could be first of many things to follow for Karnataka. Could karnataka be the next Gujarat? I am referring to the development and nothing else.

Coming to Nano, the price of the car is already increased if you take in the amount invested (drained out) in Bengal. So it is upto Ratan Tata to keep the cost as promised or increase the cost. If he increases the cost, his statement of “promise is a promise” will not hold good. If he absorbs the cost, Nano as a business model does not make any sense. Tata Motors have to sell more than expected cars to break-even. Either way Tata motors does not gain from this.

Depending upon the choice Ratan Tata makes, the world would know Tata either as a socially responsible person  (for having a vision of empowering every Indian with a car and not considering the environmental impact of it) or a astute business man (for increasing the price of the car and hence shareholders trust).

We just have to wait and see.

The perennial question remains. At what price Nano will come out?

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