SINGUR - A Wake-up Call

The 30 year old MarxistGovernment finally seemed tohave woken up to the changeddynamics of a globalized world.The change was all the more visiblewhen Mr. Ratan Tata announcedthe setting up of a small car factoryat Singur the very day Mr.Buddhadeb Bhattacharya wassworn in as Chief Minister on 18thMay, 2006. With a SEZ atNandigram also planned, Mr.Bhattacharya looked set to changethe image of West Bengal into aninvestor-friendly one.

Presently, Tata motors haspulled out of Singur forsaking itsRs. 1500 Crore investment. TheGovernment has accepted

victims, the most horrific beingthe rape and killing of an 18 yearold girl inside the factorypremises. The culmination ofthese events was the 'gherao' ofthe factory which forced theTatas to pull the plug. The recentevents are too fresh to bereiterated here.

“I am telling my workers — you have to change. If you fail to change, your company may fail."

"We are not fools to ignore the changes taking place in the World".

Quotes from a pro-reform Left front Chief Minister signaling a change on the horizon for West Bengal.

Compensation Package

The initial compensation package was fixed as follows:

1. Rs. 8.70 Lakhs per Acre for the mono crop land

2. Rs. 12.76 Lakhs per Acre for the multi-crop land.

This Rs. 12.76 Lakhs, if put in a Fixed deposit at the current rateof interest, would earn Rs. 9,750 per month, ignoring inflation,which comfortably exceeds the income from any multi-crop land.The return drops to nearly Rs. 3,000 per month if inflation isaccounted at the rate of 6%. Such compensation also neglected theexpected increase in the value of the land post development. Mostof the small farmers are poorly skilled and the absence of arehabilitation package meant that unemployment was a very realprospect for most of them.

Cost of wooing the Tatas

The enormous subsidies and incentives provided by the stateGovt. has raised several eyebrows. A Rs. 200 crore loan at 1% rate ofinterest, VAT proceedings being handed back to the company asloan, Rs. 130 crore as compensation to farmers; all add up to astraightforward subsidy of Rs. 12 crore a year on the land purchase.These benefits are required to support the Nano project. But is thestate justified in using tax payer money for offering these enormousbenefits to a private venture? 

Nandigram as a failed case offorced land acquisition; with adented image not just in the eyes ofthe industry but also the workersand farmers whom it claims torepresent.

So what went wrong?

The proposed 997 acres forthe Tata small car plant wasmostly fertile, multi-crop land,located in one of the mostagricultural ly productiveregions of West Bengal .Unwilling farmers standing tolose their only source of incomenaturally erupted in protest andthe state's ill-preparedness wasclear in the inept handling of the

crisis. The Government resortedto brute force to quell protests ,involving both the state policeand CPI (M) cadres to coercepeople into accepting thecompensation package offered.Although forcible acquisition ofland for a ‘public purpose’ is thestate’s legal right under theLand Acquisition Act (See Land Acquisition - A Legal Perspective),there were two major issues onwhich the Govt. was caught onthe wrong foot. (See Box)

These let Ms. MamataBanerjee to creep in and thecommunists ironically foundthemselves fighting on the sideof a capitalist business house.The agitation claimed its

While Singur is a particularcase in point, land acquisition hasnever been easy for theG o v e r n m e n t . T h e L a n dAcquisition Act, formulated by theBritish way back in 1894 wasadapted in more or less the samefor after Independence andenables the state to expropriate anyprivate property forcefully for'public purpose', with duemonetary compensation to theowners. The underlying logic liesin the principles of Utilitarianismand the consideration ofcommunity welfare over anindividual's right to property.

Unfortunately, the law isinherently imperialistic andsuccessive Governments have onlyworsened matters by taking fulladvantage of the ambiguity of the'Public Purpose' clause. Wheneverconflicts with the judiciary arose(See Box, R. L. Aurora vs. State ofU.P, 1962), the Govt. brought aboutamendments (1962 and 1984)which only strengthened its arm.The term ‘Public Purpose’ was

In an overzealous drive to copyChina's Special Economic Zones(SEZs) model, more than 500 SEZshave been sanctioned coveringaround 500,000 acres in total. Thishas meant widespread acquisitionof prime agricultural land for bothpublic and private sectorenterprises, often with meagrec o m p e n s a t i o n a n d n orehabilitation. Small farmers have

 been the worst hit, with the landgoing in huge chunks to bigcorporate houses, a reversal of theLand Reforms era. Singur andNandigram were only waiting tohappen.

The Government seems to havewoken up to some of theseconcerns, going by the provisionsof the Land Acquis i t ionAmendment Bill 2007. 'PublicPurpose' is redefined to includeonly defense purposes andinfrastructure projects. TheGovernment can now acquire landfor private companies only if 70%of the required land has already

  been obtained by the companythrough direct negotiation with theland owners. The Rehabilitationand Resettlement Bill 2007 has also

 been simultaneously tabled which

èWhere should the line be drawnbetween public good and private profit?

èShould land acquisition solely bethe responsibility of corporatehouses or is state interventionnecessary?

èWho does the state bear greaterresponsibility towards– the farmerswho stand to lose their livelihood orthe private developers?

The basic question of SEZson prime agricultural land stillremains unanswered. TheS t a n d i n g C o m m i t t e e o nCommerce in its report on TheFunctioning of Special EconomicZ o n e s i n J u n e 2 0 0 7recommended the use of onlywaste barren land for SEZs; touse single-crop, rain-fed land inunavoidable situations and to

 ban altogether the use of multi-crop, irrigated land. None ofthese have found any mention inthe amendment b i l l , anoversight that is too glaring toignore. Industrialists cannot be

  blamed for willing theirfactories to be placed at well-connected places with abundantresources. It is the Government'sresponsibility to provide thenecessary infrastructure tomake it viable for SEZs to be setup on wastelands such as theThar Desert. Russia's Siberianindustrialization (without the

 What needs to be done?slave labour) and the ShenzhenS E Z ( s e t u p o n c o a s t a lwasteland) are the paths tofollow.

The Government's callousa p p r o a c h t o w a r d s b a s i cinfrastructural development isthe major reason for the failureof the SEZ model in India, asopposed to its success in China.The people affected too have to

  be taken into account. Sloganslike “China was yesterday, India istoday” will only remain theempty rhetoric that they areunless the present primevaloutlook changes. The corporateworld, by itself needs to followthe example of visionaryindustrialist J R D Tata, who hadthe courage to set up base in a

 barren land and convert it intot h e s p a r k l i n g , w e l l -a d m i n i s t e r e d c i t y o f

  Jamshedpur. India needs moreof such visionaries. Let's hopethere are more.

“The Land Acquisition Act

did not contemplate that theGovernment should be made a  general agent for companies toacquire lands for them for their

 private profit ”- Supreme Court

provides for better compensationpackages for tribals, forest dwellersand land tenants taking intoaccount the intended use, futurevalue of land and a social impacta s s e s s m e n t . A l t e r n a t i v ee m p l o y m e n t a n d n o tcompensation is the key issue hereas simply handing out a lump sumof money does not serve thepurpose. The old adage aboutteaching a person to fish rather thangiving him a fish holds. Companiesand the Government shouldensure that all displaced people aregiven sufficient training to make aliving.

expanded to include “companiesthat are engaged in or are planning toengage in any industry or work for public purpose''. With this, the statecould virtually classify anyacquisition of land to be in publicinterest. Since then, the courts have

 been indecisive on the issue, withone judgement ruling that 'TheGovernment is the best judge indeciding whether acquisition is for a public purpose or not '

In the eyesof the law 

The SEZ Question

SingurKGP

FEATURES AV E N U ETHE SCHOLARS’ A VENUE  ²WEDNESDAY , OCTOBER   22 TH 2008 3