Why ain't anyone talking of Governance and the Small Shareholder in the Tata-Mistry saga

Photo Courtesy +ABPLIVE 

Article first published in +ABPLIVE (Click here)

The Cyrus Mistry saga has been done to death. Normally, fatigue would have set in among both the media and the public. As someone remarked, it does not even have any gossip value like, say, the sacking of the chairman of a liquor company. But the aftershocks of the sacking are still continuing.

Though the epicentre of this quake was Bombay House, the headquarters of Tata Sons, it has shaken entire corporate India and the tremors were also felt in the capital’s corridors of power, especially the Finance and Corporate Affairs Ministry and, some suspect, even the PMO. Per public perception, the Tatas were considered the gold standard among Indian business conglomerates. Now some fundamental questions have been raised about corporate governance in India.

First, on a positive note, it establishes the supremacy of the board. But, at the same time it also makes it loud and clear that in the final analysis the promoters are the ones who call the shots.

Having conducted a silent board room coup the Tata PR machinery went on an overdrive. In a rather intriguing move, they had a slew of top gun lawyers defend their action on television with a series of “exclusive” interviews rather than waiting their turn in court. This was probably triggered by rumours of Cyrus Mistry contemplating legal action (given that Mistry’s father-in-law Iqbal Chagla, son of the famous MC Chagla, is a renowned and respected legal luminary) which also explains the rush to file caveats in courts. But, it was a rather curious way of addressing stakeholder concerns — especially the stock market where the Tata stocks tanked.

In contrast, Mistry’s reactions were both restrained and dignified. Other than what is being popularly called his “letter bomb” (it is not known for certain who leaked the contents) he has not made any public utterances. In fact, his office went out of its way to scotch rumours of potential legal action.

Returning to the root, none can deny the Board’s prerogative to sack or appoint a Chairman. The rest is surround sound. Mistry certainly knows this and it would be surprising if he chooses to pursue a protracted legal tussle that will be a drain on resources and time. He wanted to have his side of the story to be known and has more than achieved that objective through his letter that mysteriously found its way into the public domain. Notwithstanding their self-righteous fulminations, it has clearly put the Tatas on the back foot with a lot of explaining to do and simultaneously put the onus on the Government, tax and regulatory authorities to investigate the charges.

The real battle, however, lies in the Board Room. It should not be forgotten that at the end of the day Mistry represented the interests of Shapoorji-Pallonji who hold 18.6 per cent of Tata Sons’ shareholding. The Trusts, no matter how powerful they are, cannot steam roll over the interests of minority shareholders.

In many off-line conversations it has been remarked that one of the cardinal sins of Mistry was not keeping the Tata Trusts informed of his moves on divestments and acquisitions. A fundamental question that one has not heard being asked is about the legal propriety of sharing “price sensitive” information with majority shareholders. If the Trusts are expected to be kept informed, what about the public shareholders of the concerned companies who are directly affected by these decisions? This is where the ‘Corporate Veil’ has been sharply pierced. It remains to be seen what view Shapoorji-Pallonji takes on similar situations in the Tata Sons board going forward.

At one level it will test the corporate governance framework in the country, in which the role of independent directors will also come under a spotlight. The obligation of the board is not limited to just the promoters and shareholders, but also the larger universe of external stakeholders. It is for this unrepresented constituency the independent directors are expected to act as conscience keepers. But how far the average director is either inclined or equipped to discharge such responsibilities is a matter of debate.

Till the time of writing Mistry has not been dislodged from his position in the Tata flagship companies which were either affected by his decisions or might be impacted by the contingent liabilities that he has highlighted in his letter. Will the ordinary shareholders who had elected Mistry as the Chairman of their companies go along without a whimper if the respective Boards recommend his early separation? If the Tatas try to bulldoze their way through, it will be another travesty of corporate democracy.

It will be interesting to see if after all this corporate paper shredding, what kind of external talent the Tatas are able to attract to replace Mistry. Many are betting that they will have to settle for an “insider-outsider” like TCS’s N Chandrasekaran. If there is even a grain of truth in Mistry’s allegations, the task of his successor is already cut out. It will be a miracle if he/she is able to achieve the turnaround painlessly.

Meanwhile, the coming weeks will be a test of credibility between Cyrus Mistry and Ratan Tata. If one were to treat the initial stock market reaction as an ‘Opinion Poll’, the Tatas have reasons to worry.

The Curious Case of Bombay House

Picture from Internet

Article first published in +DailyO India Today

When Ratan Tata talked of “intolerance” rising in the country — at the Founder’s Day function of a public school — he was certainly not referring to what was brewing in the corporate empire that he presided over till a few years ago.

Even in hindsight — it could not have been a diversionary tactic. As the media went on an overdrive trying to interpret the political import of a generally apolitical Tata’s statement and was busy reporting the feud in the ruling political family of Uttar Pradesh , the young chairman of Tata Sons, appointed less than five years back with much fanfare, was removed unceremoniously in a bloodless boardroom coup.

Cyrus Mistry can enjoy quiet meals in dhabas with his chauffeur without the paparazzi chasing him.
Not much is known — or will probably come to light in a hurry — as to what might have preceded such a momentous decision by one of India’s largest (and arguably, the most well known, internationally) business conglomerate, though theories and conjectures are bound to surface.

However, from a lay external observer’s view, the following come across as interesting:

- The move obviously took Cyrus Mistry by surprise just as it apparently caught corporate India and the financial press unawares.
- If there were performance issues , they would have come to the table at board meetings and in a highly porous corporate culture of this country, there would certainly have been a whiff in the air;
- Over the years, despite having started on a tentative note, Ratan Tata had acquired a larger-than-life image and he not only remained the public face of the group, his personality undoubtedly held sway in the Tata empire not just because of his surname;
- While the internal Directors would have easily fallen in line with the group’s thinking, it would have required some very compelling reasons to convince the eminent external directors on the board;
- All things said, Mistry was the nominee of the largest shareholder of the Group (Shapoorji-Pallonji). For the Independent Directors to endorse such an extreme action, there must have been some overriding “ethical” (not necessarily integrity but “governance” related such as “conflict of interest”) considerations; it would be unfair to assume they would have gone along with the majority view.
- In a somewhat intriguing move, it seems Ratan Tata wrote to the Prime Minister apprising him of the Board’s decision. Whether the change of guard in a major corporate house merits such an intimation can be a matter of debate;
- Any shareholder tussle would normally be thrashed out first at a different fora before coming up to the Board — which is normally the place for stakeholders’ dispute resolution;
- Surely, the Tatas would have been alive to the possibilities of legal fall-out, especially with Mistry’s father-in-law being one of the very eminent jurists of India — Iqbal Chagla, son of the legendary MC Chagla. Not surprisingly, there is already talk of Mistry approaching the Bombay High Court for relief;

That brings us to a new development in Corporate India — when aggrieved senior executives are increasingly taking their former employers to court. This can be attributed to a number of factors.
First, high-stake CXO appointments are now stitched with elaborate legal contracts with severance conditions explicitly spelt out. With multi-million paycheques, head honchos are easily able to pay for expensive legal help that their poor predecessors could not afford. In an increasingly litigious society, law firms too are much more willing to take briefs against potential corporate clients.

Mistry’s appointment was prefaced with a much publicised “global search” by an international head-hunting firm stretching over two years. Finally, when Mistry — the scion of the largest shareholder — was brought in from the cold, many felt it was an elaborate charade. Now, that again a “hunt” has been insituted — one wonders what surprise it will throw up this time.

Finally, leadership transition in professional organisations is as prone to withdrawal afflictions as indeed it is in family-owned enterprises. And, it does not help to have a charismatic predecessor keeping a benevolent eye over one’s shoulders.

No matter how the drama plays out in the coming weeks — Mistry can enjoy quiet meals in dhabas with his chauffeur without the paparazzi chasing him.

But, the question people are asking is whether this was Tata Sons’ Samajwadi Party moment — and who is the Amar Singh in Bombay House?

A weekend of awards

Suddenly Omar Abdullah has become the poster boy of Corporate India. He has certainly got “star appeal” and India Inc, as it has come to be fashionably called, seem to have made this great ‘post-Obamatic’ discovery of “younger politicians” as potential agents of change (keeping the butter warm and soft, ready for application on another scion in waiting – should the contingency arise after the forthcoming general elections, à la circa 1984 - if you understand what I mean!!). Otherwise, it is difficult to explain the choice of this third generation Kashmiri “lion” cub as the Chief Guest for an award function of a respected Business Weekly, in Mumbai last Friday (which I had to attend on a call of duty). His only tenuous link with the city, we were told, was that, he went to college at Sydenham and his “corporate” credentials come from his having been a trainee at ITC and a Manager at the Oberois (who then ran a property in Srinagar, by the Dal Lake)before he took his plunge into the family business of Kashmir politics.

The corporate brass turned out in full strength – including a few odd numbers like a leading Urologist, who probably holds some little secrets of their inside tracts. And, strangely young Omar arrived not just with his wife (which would be understandable) but also his father in tow – like protective mothers of young starlets, who accompany their nubile daughters on out-of-town shoots, presumably to keep predators at bay or to ensure that they are not short-changed on pay and perks.

the Pandit and the Sheikh

Personally, I was never enamoured of the Abdullahs. I find them a bit like the Koirala family of Nepal – on whom successive Governments in Delhi (I am advisedly refraining from saying: the ‘Indian Government’) have over-invested in the past 60 years. Until very recently, New Delhi always thought that the Koiralas were our ‘best bet’ – and continued to back them covertly and overtly through the years. But, everytime the Koiralas came to power - Delhi became a distant friend and they found virtue in other neighbourly and regional ties – be it across the Himalyas to the North or a bit further beyond the western borders of India. The Indian establishment tried to retro-justify this ‘lack of reciprocation’ as compulsions of local politics – only to repeat the folly again in future.

Politics on the Golf Course

The long saga of the Nehru-Gandhi family’s fraternal foibles with the old Sheikh is well known. And, one still remembers the National Conference’s minor flirtation with the BJP and NDA. The ascent of the motor-biking Farooq was greeted with as much enthusiasm as we now see over his son – only to realize in no time that, he is a better partner on the Golf Course than in the political mine-fields of Kashmir. Therefore, I am a bit skeptical about this euphoria over the anointment of Omar as the heir of the ‘riyasat’ and was not in the least surprised, when he declared at the same august gathering ( in the course of an otherwise very impressive speech) - “Pakistan is not an enemy of India …but there are elements within Pakistan ( comprising about 99.9% of the population, I would reckon) who do not want normal bi-literal relations with India”.

The Corporate ‘Dada Saheb Phalke’

If the choice of Omar Abdullah as the G-o-H was intriguing, the selection of Bikki (P.R.S.) Oberoi as the “Businessman of the Year” was equally baffling. I wouldn’t have had a problem if he was awarded a “Dada Saheb Phalke” equivalent award of the Corporate world for his “Lifetime Achievements”. But what was his special achievement in the last year to merit this recognition ? I couldn't simply get it. From the various laudatory speeches, one almost got the feeling that he was being honoured for the 26/11 attack on his flagship property – which, by their own public admission, was the favourite haunt and watering hole of many of jury members (some, infact, had their offices and homes right next to it and, so, had witnessed first-hand the events of those 3 fateful days). By the same token Ratan Tata should be nominated for Bharat Ratna for the onslaught withstood by The Taj.

But, the real entertainment of the evening was 6 top businessmen coming on stage to offer their prescription on how to tackle terrorism. It was hard to believe that, people of their stature with extraordinarily sharp minds could come up with such puerile analysis of and even more banal suggestions. I thought, 6th grade students would have done better if they were asked to write an essay on the subject. The first – an young steel baron – talked of how industrial development was the only way to solve the terrorist problem and offered to fly down with some of his business cronies to suggest ways of industrializing the state. (In his speech – Omar was quick to point out that, he hadn’t come to invite people to set up industries in Kashmir – as his state couldn’t offer the infrastructure and skilled manpower required for it. He would, instead, like them to provide vocational training that would help Kashmiris find jobs in main-land India. A sure conduit for Pakistan to export terrorists from across the border and infiltrate our industries – some security experts might argue!!)

This reminded me of an apocryphal anecdote that used to do its round in my old company. A project team had gone to Srinagar – at the behest of the GoI – in the early 80s to explore the possibility of setting up a Detergent Packing plant in the Valley. On asking about the security situation – it seems a government official told them nonchalantly (he was joking - I’m sure) – ‘what’s your problem? You are a multi-national – so your plant will either belong to Hindustan Lever or will go to Lever Bros Pakistan”.

Tackling terror with paranoia and wazwan

The second was a top banker – who provided a brilliant 3P formula for tackling terror: Pillars, Paranoia and Pakistan. First – he said we need to strengthen the ‘pillars’ of society (very original !!), then we need to create enough “paranoia” and finally tackle Pakistan. Tauba, Tauba !!. ( For a moment – when he mentioned 3Ps – I thought he was referring to the Pakistan Peoples Party).

Then came the flamboyant liquor baron turned air-line tycoon and part time politician (who, incidentally – as I gathered from an impeccable source - had just returned from a ‘self-financed’ junket to Srinagar and Gulmarg – gorging on the fabulous ‘Wazwans’ - to celebrate the accession. Some say, he is angling for a rajya Sabha ticket from the state). Speaking with his familiar élan, he didn’t miss the opportunity to plug his airline and spent some time discussing the problem he has in docking his yacht at the Gateway – from which he surmised that the terrorists couldn’t have landed there without the complicity of the locals. He also shared his worry on the very ‘real’ possibility of one of his airliners being hijacked or blown-up. Both fair points – but not particularly luminescent in my limited view.

But that’s all that I could take. I decided to make a quiet exit (seated on one of the last rows being the habitual back-bencher that I always was). While walking out - I reflected that it’s not the business of corporate honchos to hold discourses on terrorism, just as politicians should desist from lecturing on Corporate Governance.


Part II: 'Scams' accha hai

Yesterday was the mother of all corporate awards – the ET(Economic Times) Excellence Awards (which was originally scheduled for October 28th – at The Trident) for which the Prime Minister had flown down. Needless to say that, anybody who is somebody in the corporate galaxy was there. Obviously, I was not one among them. Have been to some of the earlier ET Awards by default - and found them to be exceedingly boring affairs (like most corporate award functions usually are) despite getting the 'glam-quotient' up with the likes of Katrina Kaif to making star appearances (don't forget VJ's clout in Bollywood and the Glamour world) as Corporate 'item numbers'. In this mornings newspaper I read, the PM spoke at length on Corporate Governance apropos Satyam and Corporate India listened in "rapt attention". I'm sure he must have made some very pertinent observations and recommendations (not for nothing Raju Narisetti - former Editor of MINT and now Managing Ed of Washington Post - had written that he would make an excellent 'op-ed writer). But, Singh is not the most inspirational orator even at his best - so I wondered how many in the audience were actually listening.

It was a wonderful gesture - though, on the part of ET to honour The Taj staff - Karambir, Kang, Hemant Oberoi , Raymond Bickson and Mahavir Rathore (the Head of Security) for the 26/11. On behalf of The Oberois, I believe, the award was received by - who else ? - P R S Oberoi himself. But, it was quintessential ET to claim that, Oberoi had specially flown down from Delhi only for the awards !!


Instead, I went for a very different kind of award function in the suburbs billed as the ‘Product of the Year (POY)” Awards. It was more of lively, 'high-voltage' entertainment and the awards were almost incidental. POY works broadly on these lines. They run some kind of a market research (totally “independent” and “not rigged”, Charu – who heads POY in India, assures me) for the Brands that register and on topping the category they are awarded the “Product of the Year” certificate – which the company can use on the payment of a “fee”. (Click here to read the concept) I asked Charu - "isn’t it a 'scam'?". A ‘scam’ it may be – she threw it back at me with her signature laughter - but a “scam that works”. It seems that, empirical evidence has shown, on an average the winners witness a 10 per cent to 15 per cent upwards increase in sales. “Come for the awards”, she told me, “I promise it will be fun”. And, fun it was for sure.

While driving back home I concluded that, 'scams' are far more interesting than the real awards.

Nano-vision II

Like my regard for Ratan Tata has risen manyfold by his marvellous handling of the Press Conference on the Nano pull-out, I was extremely impressed by the panel discussion that was taking place simultaneously on the Bengali News Channel – STAR Ananda – which was far more objective and balanced than the very extreme dismal view of most mainline English News Channels. It was rather refreshing to hear the 2 economists (Abhirup Sarkar of the Indian Statistical Insitute and Dipankar Dasgupta also ex ISI) and 3 politicians (Subrata Mukherjee of the Congress, Saifuddin Chowdhury former CPM MP - now formed his own party PDS and, surpringly - Nepal BHattacharya - from the CPM too) and a lawyer - Arunava Ghosh - reason the entire saga that was played out over the last 2 years very dispassionately. The politicians, perhaps - realising that a strident stand at this juncture would not go down well with the people, also took a very moderte position. But that too indicates a maturity and sense of responsibity one does not normally expect from them.

The announcement didn't come as a surprise - it was the timing and the manner ( the 'when' and the 'how') that most people were waiting for. It was also of interest to many, how the CPM would react to - what would be definitely seen as - a snub on their face.

In all this drama, one major issue was forgotten : whether mere compensation was good enough to ensure the long-term livelihood of the poor marginal farmer deprived of his land, who didn’t have the competence to find an alternate source of employment or income. As Dipankar Dasgupta pointed out, it was not as if they were being offered a compensation based on the NPV of their future streams of earning. The principles of computing the compensation was also not transparent. What was required is a comprehensive rehabilitation package - not just a 'lumpsum' compensation, which was bound to disappear in no time - left in the hands of the poor farmer.



Abhirup Sarkar cited the example of his house-hold help – who comes from that area. She was adamant that she wouldn’t part with her land for any amount of compensation because she wouldn’t know how to deploy the money to see her family through, at least, the rest of her life. (Read Abhirup Sarkar's Interview on Development vs Land Acquisition in the HBL by clicking here)

One politician, - Subroto Mukherjee of the Congress, made another pertinent rejoinder to Ratan Tata’s remark that, the land acquisition was purely a matter between “ the government and the farmers” and the Tatas had no role to play in that. Subroto said that, when even a common man does a “search” before buying a plot of land for building a house – it was difficult to believe that the Tatas didn’t do a "due diligence" before building a plant over 1000 acres.

He was also surprised that, it took both the government and the Tatas 2 years to realize that this won’t be a smooth ride. Therefore, he found it a little odd to hear Ratan Tata to say today, he can’t run an operation with police protection, when that is exactly what they have been doing since the beginning of the project.

On the issue of “governance” all of them agreed that, it was unrealistic to expect the CPM to change their own administrative style built over 3 decades overnight and selectively.

It was again characteristic of the CPM leadership to advise the CM (as reported in the Calcutta newspapers this morning) – “to be firm and avoid being apologetic while presenting his case, and to tell Tata the land issue was the same everywhere and the company would be disregarding popular opinion in Bengal if it pulled out”. That is exactly what Buddhadeb told him – adding he would be making a “mistake” in pulling out.

But, the true colours of the CPM came out in calling for a Bandh next Saturday to protest against the Tata pullout. We may have another Nandigram just waiting to happen as the cadres gather their fire-power - post the Pujas or even before that.

Another sane voice, which emerged was that of Nirupam Sen – the Industries Minister. I thought, he presented the West Bengal governments side of the story very cogently with a humility that is rarely seen in a Marxist. Later, he was quoted to have said " I don't feel like living in West Bengal myself".

But, one question still remains open: what will happen to the 1000 acres of acquired land, which has been rendered non-arable by dumping tons of fly-ash to raise the ground for construction? Even Ratan Tata has maintained a studied silence over it. The land, which has been leased to the Tatas for 99 years, cannot be re-claimed unless the Tatas surrender it back to the government - which one doubts if it ever will.

In a dangerous game of political brinkmanship - all sides overplayed their cards. I, therefore, blame all 3 players (CPM, Trinamul and also the Tatas) for the final (?) outcome. While Mamata's methods may have been reprehensible and her personal style unacceptable to many of us - we cannot forget that she is also a product of a system. In condemning her (which she more than deserves) we are only attacking the symptoms but not the disease. She is merely a manifestation of a malaise, the purging of which is bound to be a very painful and time-consuming process. It is easy to say that, the ultimate loser is Bengal, which is undeniable. But, it could also be true that Bengal isn't ready yet to take that leap into the future.

I had written about this in an earlier post (Nano-Vision I - Click here to read) and I still feel that, we haven't heard the last word on Nano in Singure yet.

Nano Vision

Undoubtedly much of it is posturing. And, almost certainly a compromise would be reached. Buddhadev Bhattacharya has already indicated that there could be a re-worked R & R plan, the Tatas will – possibly – also up their compensation. Overall the stakes are too high for all constituents. The state government cannot be seen to let another committed investor go- away. The Tatas for all their tough talking have gone too far down to pull out at this late stage – especially without a ‘Plan B’ ready they not only have shareholders to answer to but also can’t afford a loss of face internationally by a delayed launch (who might question their ability to run the JLR operations overseas when they have trouble managing their own backyard at home ) and, not to mention, the risk of losing their first mover advantage with competition breathing down their neck with plans for launching similar products soon. Mamata Banerjee too won’t be able to bear the cross of driving away investment from the state (One hears that she has already sent some feelers to the government on what could be some possible alternatives). So, it is a reasonably safe bet to place on the Nano rolling out of Singur – albeit after some breathtaking brink(wo)manship.

Brand Buddha & Mamata's Kurukshetra

Out of all this the CPM’s image will take a further beating, ‘Brand Buddha’ would lose some more basis points and his starched white Kurta ( ‘Punjabi’ as the Bongs call it for some strange reason ) would look a wee-bit crumpled. And, whether the urban intelligentsia likes it or not, either ways, it would be a huge symbolic victory for Mamata which would raise her stock in rural Bengal – her chosen ‘kurukshetra’ against the mighty Marxists . But, the ultimate loser will be West Bengal. Even if the Government is able to avert a pull-out of the Tatas, this will be a huge set-back which will put all but a paid stamp on any dreams of having an industrially resurgent Bengal in the foreseeable future. Forget new investors – even existing industries, the Tatas included, would lose confidence and think twice as hard before increasing their exposure in the state. There is absolutely no question that, the Tatas would not put any more monies behind this plant – possibly reducing its dependence on Singur as they set-up a second manufacturing facility elsewhere – for which they already have open offers from other states.

Singularly Singur

I do not know the facts about the land-acquisition Therefore, I cannot and would not like to comment on whether the land holders were treated fairly and a just and equitable R & R plan had been put in place to start with. Though I have heard – seemingly logical - arguments even within well-informed and knowledgeable circles that, incursion into prime agricultural land could have – perhaps – been avoided, by reclaiming the vast stretches of industrial land along the banks of the Hooghly – now lying unused after the Jute Mills shut-down and Engineering companies relocated to other parts of the country. But, apparently – such an option was not acceptable to the Tatas as the cost of industrial plots (that would have to be purchased from companies and business houses who have been holding on to them as valuable real-estate) would have been much more than agricultural land acquired through a decree of the state government. And, they singled out Singur ( Buddha himsel had said this) of all the locations that were shown to them due to its proximity to Calcutta. Then, there is also a view that, the state has acquired more land than was actually required for setting-up the factory – ostensibly for the ancillary units that might come up near the plant ( so Mamata Banerjee’s 400acre argument may not be entirely unfounded). It also appears a little curious that, the Tatas - who are past masters of land acquisition (with experience of over a century across the country - including troubled spots like Orissa and Bastar) did not engage with the local communities ahead of commencing construction activities, as is there routine practice elsewhere. They were possibly lulled into believing - by the forceful re-assurances of the Chief Minister - that, the land would come to them on a platter. Be that as it may, any which way one looks at it, it is a dismal failure of the government to deliver what was promised - for a flagship investment in the state after years of industrial drought.

Mamta Bashing

While Mamata bashing would be popular both for the media and the cosmopolitan intelligentsia, I would argue that she couldn’t have been expected to behave any differently. Aren’t politicians genetically coded to fish in troubled waters ? Would the CPM have acted any differently had they been in opposition ? Therefore, I wasn’t surprised in the least to see on television yesterday – the ubiquitous Amar Singh suddenly turning up by Mamata’s side addressing a rally in Singur. So, did Buddha underestimate Mamata or was he simply being politically naïve – as people believe he was in Nandigram, where they say he was taken for a royal ride by his own party’s local satraps who misled and misguided him at every step ? I think that at both these places the CPM was victim of its own arrogance – assuming that the party machinery was all powerful and would be able to steam-roll over any challenges on the ground. But, stuffing ballot boxes in successive elections to secure a thumping majority is not the same thing as dispossessing farmers from their land – for a party whose credo has been built by selling the dream of securing land for the landless.

–

Small isn't Bad

In many ways the very successes for which the CPM has been lauded during their three decades of uninterrupted rule in West Bengal has also been the cause of their undoing. First, it is not generally known that West Bengal is one of the best examples of a state where land reform has actually worked. Today, it ranks among the highest in terms of agricultural production among the states. With less than 3% of the cultivable land it accounts for nearly 8% of the country’s food grain production. It is number 1 in Rice and 28% of the country’s potato is produced in West Bengal – much of it grown in and around Singur. And, the biggest beneficiary of this agricultural boom has been the small farmer . West Bengal has become a case-study for the thesis - “Small is not necessarily bad”. With the exodus of industries in the 70s following the Naxalite movement and the natural demise of the Jute Mills, West Bengal has been converted into a primarily into an agrarian economy. Sadly some might say – but that’s the reality. The rise in per-capita income and the consequent increase in Purchasing power one has seen in the recent years have come essentially from the new-found rural prosperity. Therefore, displacement of the agricultural community – without providing alternate source of employment and income is bound to be a Herculean task. Who would have known this better than the CPM, which has thrived for decades on the politics of the land ownership? And, if Buddhadev Bhattacharya or his senior party colleagues didn’t anticipate this – then it can only be described as a monumental miscalculation of their collective leadership.

Either with us or against us

Secondly, West Bengal is almost unequivocally credited to be one state where Panchayati Raj is a reality. While critics my argue that – it was implemented with the sole objective of extending the party’s stranglehold to the village level and it is nothing but an elaborate machinery to ensure successive electoral victory through organized rigging – there’s no denying that grass-root democracy can be seen at work there unlike many other states across the country. But 30 years of rule does create a level of fatigue and an anti-incumbency factor. Besides, while industrialists from across the country – would unanimously vouch for “non-corrupt” credentials of the current CPM leadership at the state level, the same cannot always be said of their local leadership at the village, block or district levels. Instances of diversion of central grants and development funds are no longer unknown or exceptional, as evident from the changing life-style of many a local leader. And, a certain degree of totalitarianism is bound to have set in - with an " you are either with us or against us" attitude.

Shifting Battleground

It is these developing cracks in the CPM’s formidable armour that Mamata has been trying to exploit in the last few years. Recognising the growing disenchantment with the ruling party, she has intelligently shifted her battleground to rural West Bengal. Initially, she had tried to woo the urban elite by enlisting lawyers, doctors, retired bureaucrats and even generals into her ‘A’ team, but was quick to realize that these people were actually a drag on her fire-brand style and did not have the ability to garner votes. She also found that agitating over urban centric issues or getting embroiled in political equations at the Centre did little to add to her mass appeal or enlarge her vote bank in the political hinterland of Calcutta. Instead, she was better off taking on the Left in their own bastion. Much as everyone would like to deny it that, she has been making progress – may be inch by inch – as is evident from Nandigram, Singur and the recent Panchayat elections. She certainly ain't a Mayavati, but however eager her detractors may be to write her off as a misguided and spent force – she is also not going to disappear in a hurry.

Not in a Nano-second

So where does all this leave the Nano ? I believe the Tatas are faced with a Hobson’s choice. In an environment that has been sullied for good, the starting of the plant could just be the beginning of their troubled existence in the state. The CPM cannot undo in a Nano second what it has done over the decades in systematically purging the state of its industrial work-culture. And, Mamata wouldn’t do anything to help them either.