The Nano’s development is an epochal event because it can make a car affordable to a very large segment of the population.

History has a funny way of repeating itself. Back in the early 1980s, a small car took the country by storm and changed the face of personal transport. The Maruti 800 was the original “people’s car” selling at the princely sum of about Rs 48,000 when it hit the market. A little more than two decades hence, we have an all new “people’s car”, this time of Indian parentage and even more affordable, relatively speaking. The Tata Nano, unveiled in Delhi on Thursday, is set to revolutionise personal transport all over again.

The Nano is a watershed in independent India’s business history for two important reasons. It showcases the country’s ability to develop a low-cost, mass-market engineering product, using what the Renault-Nissan chief Carlos Ghosn calls “frugal engineering”. It is the best example yet of such engineering capabilities and comes at a critical time when automobile, and indeed engineering companies worldwide, are straining every muscle to cut costs in product development. Four years ago, when Mr Ratan Tata first went public with the idea of an affordable, mass-market car, there were few takers, with reactions ranging from amazement to scepticism. Indeed, as late as a month ago, the chief of a rival carmaker which stands to lose most if the Nano succeeds, pooh-poohed the idea, only half in jest. Yet, even before the car hits the market, one can safely say the idea is already a success, going by the alacrity with which other big names are jumping on to the bandwagon. Renault’s Ghosn is working with Bajaj Auto for a similar product while some others are keenly watching the developments.

The second reason why the car’s development is an epochal event is because it has every potential to be an inclusive innovation. For the first time in this country, those on the fringes of the middle-class can hope to fulfil their aspirations of owning a car. The car will cover a very large segment of the population on the affordability parameter. Just as the mobile revolution heralded inclusion in communication, making a telephone affordable to even the street-side hawker, the Nano can make every footloose Indian “transportation inclusive”. For this reason alone, the Nano is the most important innovation of India Inc so far. Yet, the historic development is not without a downside. Environmentalists are up in arms, complaining that these cars will clog roads and highways and increase emissions to unsustainable levels. The answer is not to deride the car but to invest in improving infrastructure. The effort should be to build new roads and bridges, widen existing ones and enforce discipline on the roads, while simultaneously investing in improving public transport. An efficient, affordable and functional public transport is the best guarantee yet of controlling traffic and exhaust emission in our cities.