Tata Motors threatens to shift its small car project out of Singur if the agitations continue.in Kolkata
WEST BENGALS industrial future seems to be jeopardised with Tata Motors suspension of the construction and commissioning work at its plant in Singur. The Tatas small car project, Nano, was to take off from here, but the continuing agitation at the site by Trinamool Congress chief Mamata Banerjee and other sundry forces bodes ill for its launch.
Although State Industries Minister and Communist Party of India (Marxist) Polit Bureau member Nirupam Sen sees a ray of hope since the Tatas have not formally left, a Tata Motors press release issued on September 2 sent a clear message that it was almost at the end of its tether: In view of the current situation, the company is evaluating alternative options for manufacturing the Nano car at other company facilities and a detailed plan to relocate the plant and machinery to an alternative site is under preparation.
On September 4, at an automakers convention in New Delhi, Ratan Tata, chairman of the Tata group of companies, reportedly said it was up to others to decide whether the Nano would roll out of Singur. This non-committal stand may just be the ray of hope that the State government and the whole of the State needs. It may also give Mamata Banerjee an opportunity to formulate a face-saver and escape the blame for being responsible for hampering her States industrial resurgence and, at the same time, not completely lose her credibility amongst her supporters.
Mamata Banerjee has been holding a violent and indefinite agitation outside the Nano plant since August 24 demanding the return of 400 acres of land acquired from those who were reluctant to part with their land and who refused compensation.
In a last-ditch effort to save the project from exiting Bengal, Governor Gopalkrishna Gandhi initiated a meeting between the State government and the Mamata Banerjee-led Opposition. The CPI(M)-led Left Front governments last hope lies in a resolution emerging from the talks. At the instance of the Governor, retired Chief Justice of the Bombay High Court Chittotosh Mukherjee agreed to be present at the negotiations to offer legal advice to him.
The Governor decided to proceed with the mediation in phases. First, he gave a two-hour hearing on September 4 at Raj Bhavan to the State government delegation led by Nirupam Sen along with officials such as Chief Secretary Amit Kiran Deb and Industries Secretary Sabyasachi Sen. Later on, a Trinamool delegation led by Partha Chatterjee, the Leader of the Opposition in the Assembly, met him. Mamatas team was represented by, among others, Partha Chatterjee, Socialist Unity Centre of India (SUCI) leader Manik Mukherjee, CPI(Marxist-Leninist) leader Purnendu Bose, noted lawyer Kalyan Banerjee and retired civil servant D. Bandopadhyay. The State governments team included, apart from Nirupam Sen, the Chief Secretary, the Industries Secretary and Home Secretary Ashok Mohan Chakravarty. The meeting, though not conclusive, was a positive one.
On September 6, another round of talks brought the deadlock closer to a final resolution. Following the marathon meeting, which began at 11 a.m. and ended at 5:30 p.m., the Governor told the media that the two sides discussed in greater detail a land-based rehabilitation scheme in and around the Singur project. He expressed the hope that a satisfactory solution would be reached in subsequent sessions. All parties were seriously engaged in resolving the issue, he said.
The Rs.1,000-crore Nano project would be the biggest of its kind in West Bengal. If Tata Motors pulls out, it will undoubtedly deter other potential investors from investing in the State.
Ever since the inception of the project in late 2006, the Trinamool Congress and its allies under the banner of Krishi Jami Jiban Jibika Rakshya (Protection of farmland, lives and livelihood) Committee, or the KJJJRC, have been agitating in support of about 2,200 (out of more than 13,000) farmers whose lands were acquired for the project.
Workers at the plant were regularly threatened and beaten up, engineers harassed, repeated attempts made to storm the factory gates, and materials stolen on a regular basis. After more than one and a half years of unrest, Ratan Tata made it clear at a press conference in Kolkata on August 22 that the Tatas would not shy away from abandoning the Singur plant: If anybody is under the impression that because we have made this large investment of about Rs.1,500 crore, we will not move, then they are wrong. [If] any segment of the State feels that we are exploiting them, first of all it is totally untrue, but if that is the feeling, we will exit. Ratan Tatas statement immediately brought forth a spurt of invitations from the State governments of Orissa, Maharashtra, Uttarakhand, Gujarat, and so on.
Mamatas response was: We will not be blackmailed. She went on to call for an indefinite agitation outside the plant site from August 24 but promised that she would not disrupt the work inside. Amid much fanfare and media coverage, the siege of Singur commenced with Mamatas new-found friends, including Samajwadi Partys Amar Singh who as Chairman of the Uttar Pradesh Industrial Development Council had invited the Tatas in 2006 to set up the Nano plant in the State, well before West Bengal clinched the project activist Medha Patkar, and leaders of the SUCI, CPI(ML), and other smaller political parties, a few intellectuals, theatre personalities, and film actors.
Mamata soon reneged on her promise of a peaceful satyagraha. On the third day of the agitation, Trinamool supporters tried to storm the factory gates, heckled the workers on their way to the plant site and manhandled some of them. Many of the workers refused to return to the plant site until the agitation was over, severely hampering the work at the site.
Late in the afternoon of August 28, Trinamool supporters prevented the exit of buses taking home the employees of the plant and the entry of those reporting for the evening shift. Among the victims of the blockade, which lasted over three and a half hours, was a Japanese team of experts. Naxalite leader Purnendu Bose announced that no employee would be allowed to enter the factory premises, thus bringing to a halt all work at the plant site.
After four days of enforced inactivity and threat of violence, on September 2, Tata Motors suspended its construction and commissioning work in the mother plant and in the ancillary units.
Mamatas rhetoric was a mixture of histrionic denunciations and scathing personal attacks against the Tatas and members of the State government. Although Mamata repeatedly said that she was not against the Tata factory, everything she did seemed to prove otherwise. She stubbornly refused to participate in any dialogue with the State government to resolve the issue and rejected all appeals made by Chief Minister Buddhadeb Bhattacharjee; she demanded a copy of the Tatas agreement with the State government, yet skipped an Assembly Standing Committee meeting in which Nirupam Sen disclosed the contents of the agreement; she ignored the Tatas overtures to sit for talks with anybody to resolve the crisis; and she has neither accepted any alternative to her impossible demand for the return of 400 acres of land nor come up with any viable suggestion of her own that does not entail the return of the land.
That Mamatas agitation was not restricted to the cause of the reluctant land-losers became apparent when her supporters targeted those who willingly parted with their land in return for employment at the plant site. Even rickshaw-pullers transporting these workers were not spared.
The agitation paralysed movement of traffic on the Durgapur Expressway on which trucks carrying essential goods remained stranded. She refused to heed the pleas of the truck owners associations, made through a petition, to facilitate movement of trucks. The State government also, fearful of precipitating a situation that would give her a lever to mount a major campaign, bided its time. This trial of patience continued until some people moved the Calcutta High Court, which directed the National Highways Authority of India to clear the road. Even then, the agitators held up traffic now and then.
One of Mamatas claims was that she objected to the special favours shown to the Tatas. Nirupam Sen said no industry had so far approached the State government with the grievance that it was being discriminated against vis-a-vis the Tatas. Other industries in the past have actually got more incentives than Tata Motors. In the case of Singur, our incentives were meant to match the concessions the company would have secured in Uttarakhand, he said.
Initially, the Tatas had decided to set up the plant in Uttarakhand, no doubt lured by the sops provided by the Government of India for investing there, including excise duty exemption for 10 years and corporate income tax exemption for five years. In order to bring the Tatas to West Bengal, the State government had to compete with these factors. We knew this investment would bring about a total transformation in the manufacturing sector in our State a sector that has been thirsting for investments for a long time, Nirupam Sen said.
Eminent economist Dipankar Dasgupta, who was earlier Head of the Indian Statistical Institute, Delhi Centre, points out that it was exactly 100 years ago, in 1908, that Henry Ford came out with the $825 peoples car in the United States, which transformed the automobile industry in that country. Ratan Tata may very well have had that in mind when he chose the figure of Rs.1 lakh for his car. In this context he would probably have wanted an almost costless means of producing his car. And for that reason, Singur, with the Durgapur Expressway running right next to it and its proximity to the port, the railways, the airport and central Kolkata itself, would reduce the cost of production immensely something that would not have been possible in districts like Purulia and Bankura, he said.
Nirupam Sen explained that the so-called concessions to the Tatas largely benefited the Government of India. Is the State government paying excise duty to Tata Motors or to the Government of India? Who is earning the corporate tax? Besides, it is not a grant that we have given the Tatas; it is a soft loan. In the last national Budget, excise duty was reduced from 15 per cent to 12 per cent. The moment that happened, the concession we gave to the Tatas also reduced. The Rs.200-crore soft loan that we had pledged to Tata Motors is now being recalculated by us, and we have communicated this to the Tatas, he told Frontline.
With growing disillusionment within the ranks of not only the unwilling land-losers but also other residents of Singur, many of whom are pro-industry, Mamata finds that she has left no exit route open. With the naxalites tightening their stranglehold on the agitation, Mamata, according to sources, was fast losing control over the crowd. The agitators are raring for a fight and Mamatas fiery speeches have done nothing to quell passions. However, rumblings could be heard even from amongst her supporters in Singur as the impossibility of her demand began to dawn on them. If the Tatas depart, many of them would be left with neither land nor industry nor any other means of livelihood.
Tata Motors has already trained over 762 youth who had passed out of Industrial Training Institutes and employed as apprentices from the region and the State, at its facilities in Jamshedpur and Pune. The majority of the people of Singur who had given up their land willingly for the setting up of the factory felt particularly shaken by the Tatas decision as they would stand to lose everything, from land to scope for business.
Pro-industry people from Singur who were also protesting against Mamatas agitation clashed with the anti-plant activists on September 3. The same day, Susen Santra, 61, a farmer who had willingly parted with his land for a compensation and whose sons got employment at the plant, killed himself by consuming pesticide.
The setting up of the plant had improved Santras economic condition significantly. If he was earlier supporting his family on Rs.45 a day through agriculture, the Singur factory had raised his family income to more than Rs.300 a day. With his land gone and uncertainty looming over his sons employment prospects, Santra could not bear to think of what the future may hold for his family and he took the extreme step. The exit of the small car project from West Bengal would mean ruin for thousands like Santra.
Apart from pro-industry farmers of Singur, practically the rest of West Bengal, especially the people of Kolkata, stood behind the State government and the Tatas. Signature campaigns were organised by employees of the information technology sector, and students took out rallies in support of the project. Noted intellectuals such as author Sunil Gangopadhyay expressed disgust at the goings-on in Singur, and celebrities such as cricketer Sourav Ganguly batted for the Tatas.
The corporate and industrial sectors of the State stated unequivocally that the withdrawal of the project from the State would deliver a body blow to Brand Bengal. Even Mukesh Ambani, chairman of Reliance Industries Ltd and widely regarded as a long-time corporate rival of the Tatas, threw his weight behind the project. The Nano project is a unique and innovative initiative that will establish Indias position as a small car hub. A fear psychosis is being created to slow down certain projects of national importance, he said.
Bengal Chamber of Commerce president S. Radhakrishnan urged the Tatas to be a little more patient since a dialogue had been initiated at the highest level. The Jindal group and companies such as Videocon felt that the entire episode was unfortunate and would affect the attractiveness of the State as an industrial destination in the short term. But those who want to come will do so, said Videocon chairman Venugopal Dhoot, whose company is investing in steel and power projects in the State. Sajjan Jindal, vice-chairman and managing director of JSW Steel, who has set a model in providing farmers compensation, hopes to lay the foundation stone for his steel plant project in Salboni in the States Paschim Medinipur district in November.
Nobel Laureate economist Amartya Sen recently stressed the importance of the Tata Motors project, and said, I do not know of any country in the world where development has taken place focussing solely on agriculture. In West Bengal, as the land use pattern will indicate, the net sown area is 62.48 per cent of total reported land area, as against 46.06 per cent in India; 13.48 per cent is under forest; 0.67 per cent is under miscellaneous trees and groves not included in net sown area; and 18.52 per cent is under non-agricultural use. The total land use in the broad categories of barren and uncultivable land, permanent pasture and other grazing land, fallow land other than current fallow, and cultivable wasteland (which is 4.31 per cent for India as against 0.4 per cent for West Bengal) together add up to 1.02 per cent of the total reported area. This makes it clear that there is no way all industrial investments can be accommodated in lands with acceptable infrastructural and locational advantages and without encroaching on farmlands, even those which can grow more than one crop.
A booklet published recently by the State government titled Industrial Land Use in West Bengal, states that the rate of growth of agricultural output over time has been affected by dwindling size of per capita holding of farm land, which has come down from 0.99 hectare in 1976-77 to 0.79 ha in 2005-06. The average size of landholding appears to be one of the smallest amongst the States and much below the national average of 1.33 ha (in 2000-01).
The recent growth path of the West Bengal economy shows a decline in the share of agriculture in total net State domestic product (NSDP) from 27.52 per cent in 1999-2000 to 21.08 per cent in 2006-07, while the share of the tertiary sector increased from 52.61 per cent to 55.59 per cent and the secondary sector from 14.54 per cent to 18.49 per cent. According to the booklet, the rural economy itself has witnessed a distinct shift in occupational pattern and lifestyle, which is reflected in the per capita consumption of non-food items and also in the increasing aspirations for school and higher education.
It is this awareness that has prompted the State government to go for an industrial drive. The Nano project shows that those who have gained employment there are semi-skilled or recently trained labourers. There is no room for such people in the service and IT sectors, nor is income from agriculture sustainable for long. It is only through growth in the manufacturing industry and its ancillaries that employment can be generated for semi-skilled people and thus reduce the pressure on the land. The Singur car factory alone cannot do this, but it is a signal project in the sense that it will act as a catalyst for industrial growth, giving other industries, not necessarily related to the automobile sector, the confidence to invest in the State, Dipankar Dasgupta told Frontline.
Tata Motors departure would be a historical loss of sorts for West Bengal. With the whole world watching with interest the Rs.1 lakh car that is to roll out of Singur, the State would cut a sorry figure on the international stage if the project gets delayed or is abandoned.
But even if the situation is politically resolved, the projects future and the States industrial future will not be secure until and unless the Tatas resume work at the Singur plant.