For me who was attached with Hindustan Motors for almost 36 years, any good news however small it is becomes exciting. I was very happy to read such a headline in Mint- ‘Hindustan Motors posts Rs75 lakh net profit in FY 2011’.
Car and auto component maker Hindustan Motors Ltd (HM) on Monday said it wasn’t a “potentially sick company” anymore and that it would send an intimation to the Board for Industrial and Financial Reconstruction to that effect, after having posted a net profit of Rs75 lakh in fiscal 2011 as against a net loss of Rs51.1 crore in the previous year.
An exception income of Rs24.27 crore helped HM pare net loss in the quarter till March to Rs6.97 crore from Rs31.82 crore in the same period 2010. For the full year, the company registered an exceptional income of Rs96.8 crore as against Rs57.84 crore in fiscal 2010. This, according to a regulatory filing, came from sale of immovable assets and/or investments.
Hindustan Motors (HM), a Birla company has sold its land to get out of red. HM would have acquired the huge tract of land running into hundreds of acres by the then at nominal price or might have got it free from the then Congress government of Dr. BC Roy who at all cost wanted fast industrialization of the state.
HM grew until early ‘90s when there was hardly any competition from any quarter. But with strong competition from Maruti Udyog, the golden era of monopoly ended. Any growth or even survival demanded better management strategy, better products and better leadership. HM failed and kept on going down the hill.
How can under such circumstances a company sell its land that ethically should not be considered as owned by the company? How can a government allow that to happen? What would have been the money that company would have earned in right and wrong way? I don’t know if some farmers were involved in the land that the government offered to HM. Was there any compensation given? If at all they would have got it, it must be in hundreds of rupees, when today the company would have got back in crores?
Corporate India must have made huge money in the similar manner all over the country. And the farmers who owned the land originally would have lost the track or would have been watching it helplessly from a distance.
The same game is going on all over the country. The government is backing or brokering such land acquisition at much larger scale. Companies demand hundreds of acres for setting up any industrial unit at the cheapest price from the farmers and for the same the companies are paying huge money underhand to those in government who matter for the acquisitions of the land. Is it not a corruption of the highest order? At least for the factories, why can’t the land remain the property of the nation that can’t be sold if the proposed enterprise fails to use the land for the purpose that was allocated? As I know HM has got officially hundreds of crore for the land it has sold. It should not be treated as revenue or earning of the company to take it out of BIFR and any executive must not boast about doing that.
HM is out of business of managing a car factory. All those who are still with the company are like those who wait to accompany the dead to the cremation.
1. Corporate India must take the land as leased one for the period they keep on growing and contributing to national economy. The day they fail they must return it to its right owners.
2. Corporate India also must learn to go vertical in plant design and construction or innovate other ways to require only minimum amount of land and particularly if it is fertile one producing food grains.