Tata’s cheap car woes fuel debate on India’s industrial drive

NEW DELHI, October 5, 2008 (AFP) – A decision by the giant Tata Group to shift a factory building the world’s cheapest car after angry farmer protests has refueled debate about India’s troubled industrialisation push. The company said late last week it was pulling the Nano car project out of West Bengal state, even though the plant near the state capital Kolkota was 90 percent completed.

The decision followed a month of violent demonstrations by evicted farmers and activists, and industry groups warned the move could blemish India’s attractiveness as an investment destination.

Tata has said it will now construct the Nano — set to be priced at about 2,130 dollars — elsewhere in India.

The whole debacle underscores the need for companies “to be much much more careful about doing their homework” when they set up a plant, said Ajai Sahni, head of the New Delhi-based Institute for Conflict Management.

“They have to make sure the local population is amenable to the project and that compensation has been adequately provided,” he said.

The protesters led by Mamata Banerjee, fiery chief of the regional Trinamool Congress party, had accused the Marxist state government of forcing farmers to gi