Beyond the Corus

The Tata-Corus deal on Wednesday has created a great sense of euphoria in this country. The celebrations are entirely understandable, since the deal signified the coming of age of the Global India brand. But after the euphoria, a reality check may not be entirely out of order.

The deal begs the question, why must a home-grown company like Tata Steel seek to acquire — at a fairly high price — a concern like Corus which has four times its own capacity? What does this tell us about the manufacturing sector in India? What does it tell us about policy-making in India? What does it tell us about civil society’s response to manufacturing in India? Let us also remember that the India growth story is being fuelled, not by the manufacturing sector, but services. Cutting through the buzz, the unpalatable fact emerges: this country has failed to create the right conditions for the growth of Indian manufacturing and is in fact driving its entrepreneurial talent to explore opportunities located elsewhere in the world. The general negativism to industrial growth manifests itself in different ways — from timid policy-making to raucous protests. This has left its stamp everywhere in the country. Whether it is in Kalinga Nagar or in Singur, attempts are being made to whip up local sentiment for political purposes, when the situation demands rational responses on issues like fair rehabilitation, resettlement and compensation.

In this competitive bid to demonise entrepreneurship, it is the country and its citizens who stand to lose out on the jobs and wealth that such entrepreneurship creates. In an earlier era, India’s manufacturers were tied to hearth and home with red tape. In today’s scenario of economic reform and globalised markets, they are free to try their luck elsewhere. And they are doing so, and doing so handsomely, as the Tata-Corus deal has just demonstrated.

So thank you very much.