Ratan Tata's Folly


His Nice New Car

Posted on 1-August-2008

     A few months ago, Ratan Tata, the head of Tata Sons, the company that controls the Tata group of industries in India and abroad, personally presided over the launching of a new mini mini car called Nano, to be manufactured by Tata Motors at a price to suit the lower middle class of India. The announced price is so low that the news attracted notice beyond the borders of India. With a 600 cc internal combustion engine the car will evidently be fuel economic and it was announced that it would meet the latest European standards for exhaust emission--the subtext of both these announced characteristics is that this new car will have none but benign impact on the environment. Not long afterwards competitors of Tata Motors announced their plans to launch their own equally fuel efficient and "environment friendly" Nanettos and Nanettas. Quite unsurprisingly sections of the Indian media have hailed these developments as almost revolutionary.

     Just over two decades ago, one of the many glib people who surrounded Rajiv Gandhi, Prime Minister of India then, started talk of a 200 million strong middle class in India supposedly with the purchasing power of Greece or Portugal. He thought that he would thus make India look an attractive economic and commercial partner for the West. That talk stuck. The middle class, using the same yardsticks as in the years of yore, may have grown, I assume, to 400 million. Of these, we are told, thirty-four last year and forty-six this year are dollar billionaires whose combined net worth may be equal to one fifth of India's GDP. There are reported to be some 100,000 dollar millionaires and some one million people with annual incomes of 100,000 dollars or more. Below this level there is a very wide colour wash occupied by presumably 398.89954 million people who are in different states of being well off--the threshold of relative economic well-being can be rather low in a country where around 70% of the population (between seven hundred and eight hundred million people), according to one official report, live on less than two dollars per day.

     Many among the richest 0.10046 million aspire to and achieve lifestyles similar to those of the rich anywhere else in the world (Rich people of the world unite!). Many of the poorer among the rich indulge in luxuries of different kinds and then there is a large number in the "middle class" for whom an extra television set, a new refrigerator, an air conditioner, a washing machine or a 1600 cc car are still greatly prized acquisitions--this is the new class of consumers celebrated by those for whom India is shining, on the march, poised to become an economic super power. The Nano and its competitors are for people at the level below--office clerks, small shopkeepers, petty contractors or not so affluent college students--who make do with crowded, sub standard public transport, battered up rusting old jalopies or motorcycles and scooters but whose desire is to have a proper automobile if they can afford one. At a mundane level, Tata Motors have shown shrewd entrepreneurship in building a motor car that can respond to the aspirations of this numerous class. This is also socialism of a kind in the sense that it helps improve the life of a very large number of people whose desire for an automobile or for other material goods is as legitimate as that of any others. There were reasons therefore for good cheer at the launching of the Nano.

     Alas, so many happy moments are marred by killjoys of one kind or another. Amidst the hoopla about the launching of the Nano, at least one notable person, R. K. Pachauri who had presided over the United Nations' Intergovernmental Panel on Climate Change talked of the negative impact of the Nano on the climate. It is only meet that he should have spoken thus. From one point of view Pachauri's objections run counter to Government of India's positions in international negotiations about setting global mandatory limits on the emission of greenhouse gases. Government of India argues cogently and with ample justification that a developing country like India with a yet very low per capita impact on the environment cannot be expected to agree to the burden of limiting the emission of greenhouse gases at the same rate as the developed countries with many times greater per capita impact on the environment  and thus jeopardise its industrial and economic growth. There are good reasons why the Indian government should hold on to this line. A corollary of this position would be that the ordinary people of India cannot justifiably be told that their possession of a small car would not be right because if so many additional, even if small, cars are put on the road they would create an unacceptable level of pollution.

     But Pachauri's concerns cannot easily be brushed aside either because they in one way run counter to India's diplomatic position in various international forums or because they show a disregard for the aspirations of the small man. There can be no contradiction between a country like India adhering to its diplomatic position on greenhouse gases and at the same time voluntarily doing whatever is necessary to improve, for example, the quality of its air, water, soil and forests  in its own interest and in that of its people--all its people, whether alive now or whether yet unborn. Environmental damage caused by human action in one part of the world is eventually harmful for the entire biosphere but its first and most serious impact is in the area surrounding the source of that damage. If there is a large forest fire in Indonesia, for example, the people who would suffer more than any others and before any others would be the people living near that forest. If Indian factories and Indian cars spew large quantities of toxic gases into the atmosphere--whether they are a very small percentage of total global emissions of such gases is irrelevant--it is the people of India who would be the first and the worst affected. When the Nanos, the Nanettos and the Nanettas start being mass produced, a very large number of cars will be brought on the roads of India within a very short time. That they will clog the streets of Indian cities and add more chaos to the already chaotic streets is a minor problem. That, no matter how "clean", large numbers of them will make a very large addition to the already high levels of air pollution should be a major cause of worry. The trick should be to satisfy the demand of the small man and yet protect the environment. This, in our days, can be, but in this case has not been, done.

     Though climate change, environmental degradation, and greenhouse gases have been discussed in diverse international forums during the last four decades, it is only now that these questions have begun to be looked at with a sense of urgency. Hopefully the work of the Intergovernmental Panel on Climate Change and of individuals like Mr. Albert Gore Jr. will  catalyse meaningful action towards the development and adoption of new and clean technologies for power generation and transportation. Mr. Al Gore has already suggested that in about two decades the United States of America should produce all its electricity from carbon free and renewable sources. Two of the Japanese car manufacturers have announced plans for the introduction in the US market in the next three or four years of mass produced battery powered and hydrogen powered cars meeting the same performance criteria as traditional cars. That the world may be at the point of moving away from the internal combustion engine or that it may in the not too distant future get most of its electricity from sunlight or wind or clean coal is no fantasy any longer.

     It is ironic that at a time when in one part of the world people are seriously moving towards electric or hydrogen cars, in another a major industrialist should with such fanfare be introducing a "people's car" based on a technology which is after all one hundred years old. Had Ratan Tata and Tata Motors invested their considerable wealth in the development alone or in partnership with others of a battery or hydrogen powered engine or other no emission engine and modified it for use even on a Nano, and waited till they had done so they would have shown themselves to be visionaries. That kind of Nano even if it came a few years later would delight those for whom it was meant and yet spare everyone the additional environmental damage the present, petroleum powered Nano is sure to cause. The Tatas have instead chosen to mass produce a cheap product now and maximise their profits through large volume sales much as others who make profits from large volume sales of one rupee(2.5 cents) sachets of detergent powder or shampoo. In doing this they and their competitors have shown themselves to be no more than tradesmen.    

 Also on this site:               Introduction to The Waste Sad Time             The Waste Sad Time

  Linked articles:

  Remembering Gandhi

  Tiger, Tiger...

   Not Only Carbon Dioxide

   Changing Capitalism


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