Starting trouble

The West Bengal government hopes that the Tata car project can usher in the much-awaited industrial revival in the State.

"You cannot make an omlette without breaking an egg."

- Vladimir Lenin

FOR long, Kolkata has been perceived as a city of processions that big business houses prefer to avoid. It is therefore ironical that when Tata Motors wanted to launch its "people's car" project at Singur in West Bengal's Hooghly district, barely 50 kilometres from Kolkata, all hell seemed to break loose. A motley group of notable personalities, including Trinamul Congress leader Mamata Banerjee, who is a principal opponent of the State government, Gandhian social activist Medha Patkar, some retired and disgruntled civil servants, and even a small section of the Left Front, appears to have strong reservations about different aspects of the project.

The small-car factory, to be set up on 997.11 acres [1acre = 0.4 hectare], plans to roll out cars that will cost around Rs.1 lakh, the cheapest in the country, and the initial target is 2.5 lakh cars by 2008. The proposed plant is expected to generate employment for 2,000 people directly and 10,000 people indirectly.

The importance of the Rs.1,000-crore project for West Bengal goes beyond the value of the initial investment or the employment it will generate. In the words of Ravi Kant, managing director of Tata Motors, this project will "kick-start" the re-industrialisation process of West Bengal. "In Pune," he said, "the whole landscape has changed within three years of setting up our plant. Uttaranchal has become the hub of the automobile industry within 10 months of our setting up a unit there."

For the Tatas this is a precious project as the world is watching its experiment of bringing out the cheapest and most fuel-efficient car. It will also involve the setting up of first-tier ancillary units that Tata Motors itself will bring in to supply components. The mother plant will come up on about 700 acres and the ancillary units on the remaining portion of land. According to Kant, as of December 10 machines have been ordered and 60 per cent of the vendors have been finalised.

Beyond the first-tier ancillary units will be the second-tier units in the small and medium sector (SME), with forward and backward linkages, mostly run by local entrepreneurs and employing local workforce. As elsewhere, these SME units are expected to be the largest provider of employment, and the State government has declared the expansion of employment opportunities to be its prime objective for reform and industrialisation.

The small-car project will be the flywheel that will set in motion the other wheels of industrial progress in the State. As Chief Minister Buddhadeb Bhattacharjee put it, "The project will change the face of not only Singur, but also of the whole of West Bengal."

While there appears to be no difference of opinion in principle about the need for development of industries in West Bengal, the Tata project's location has stirred up a controversy. The State government has pointed out that the Tatas made the final choice of the site from among five or six sites, including some in backward districts, presented to them.

Critics of the project were upset about double-cropped land being given away for industrial purposes. According to official statistics, which are based on the original Record of Rights (the change in classification is noticed during actual survey and payment of compensation), however, out of the total project area of 997.11 acres, 910.61 acres is mono-cropped and only 39.08 acres is under more than one crop. The rest of the land is non-agricultural.

The project area was reduced from 1,053 acres in the original proposal in order to exclude highly fertile tracts of land. The zig-zag map of the project site is testimony to this effort, says the State government. The project comprises parts of five mouzas (revenue unit for a village) out of 109 mouzas in Singur block, covering 39,075 acres. Thus the project area constitutes only 2.5 per cent of the total block area and the project-affected population (PAP) is only 12,000 out of the total 2.16 lakhs, that is, 0.5 per cent.

The compensation package for farmers is another bone of contention. The State government says that keeping in view similar compensation awarded under the Land Acquisition Act of 1894, it is generous. For land under a single crop, the rate is Rs.6 lakhs an acre; taking into account the solatium and the 10 per cent incentive, the final rate works out to Rs.8.40 lakhs an acre. For land under more than one crop, the rate is Rs.12 lakhs an acre. This total compensation, amounting to around Rs.130 crores, is to be distributed among 12,000 persons.

By the end of the first week of December, more than 9,000 people had received the compensation. The beneficiaries also include sharecroppers - 300 registered and 170 unregistered - who are entitled to 25 per cent of the compensation due to the land owners.

While senior Trinamul Congress leader Sougata Roy lamented the inadequacy of this compensation, veteran peasant leader of the Communist Party of India (Marxist), Benoy Konar, indicated that this amount was more than generous for those having average holdings of 10 decimals of land.

In an article in the Bengali daily Ganashakti (December 6), he furnished facts and figures to show that the compensation amount, if kept in fixed deposits in commercial banks, would earn for land-losers 10-15 times the earnings from their cultivation. Furthermore, he calculated that even if the entire project area was taken to be double-cropped, it could generate about 1.50 lakh acres of man-days of employment, that is, whole-time employment for 300 days in a year for 500 persons only. By contrast, the Tata Motors' unit, when completed, will provide jobs, directly or indirectly, to more than 10,000 people.

As a part of rehabilitating the PAP, the State government has organised a four-month training course for land-losers to impart skills as machinists, in welding, repairing two- and three-wheelers and automobiles, wiring of houses and repairing of electrical gadgets.

For women, the government has entered into agreements with Singer India Ltd for tailoring lessons and already 80 women have enrolled in two batches. The Insititute of Hotel Management, Catering Technology & Applied Nutrition will also start a course in catering for women soon. Moreover, Tata Motors has pledged to procure consumables such as gloves and aprons locally from women's self-help groups.

Already more than 1,800 people, including land-losers and 443 landless persons, have enlisted for the training programmes. Agencies such as the Confederation of Indian Industry (Eastern region) and G4 Security Agency have evinced interest in training people as masons, machinists and security guards. The entire training cost would be borne by the West Bengal Industrial Development Corporation (WBIDC).

Community development work in the region has also started in earnest. Programmes undertaken include increasing drinking water facilities, repairing school buildings, improving roads, re-excavating the Jhulka canal to improve irrigation potential in the adjoining areas and digging tubewells to improve the cropping intensity in the surrounding region. All this work is being executed with local labour comprising land-losers and landless workers. More than 2,000 man-days have been generated as of the first week of December. The task of fencing the area was also given to the local people, which generated more than 5,500 man-days.

Opposition to the project, though loud, is fragmented, varied and often irrational. Mamata Banerjee has left no stone unturned to stop the project from taking off. She even emulated Mahatma Gandhi's Dandi March with some of her supporters and refused to hold talks with either the Tatas or the State government. She also boycotted the two all-party meets called by the Left Front in September, while Trinamul Congress legislators smashed up furniture in the Assembly and repeatedly disrupted traffic on roads.

Finally Mamata went on an indefinite fast on December 4 and refused to call it off despite requests from the Chief Minister, verbally and in writing, and similar appeals from CPI(M) state secretary Biman Bose, who is also the Left Front chairman, and former Chief Minister Jyoti Basu. Even Governor Gopal Krishna Gandhi visited her but his request went unheeded.

Mamata Banerjee found an unlikely ally in Medha Patkar who also went on a sympathy fast but left for Delhi after unsuccessful attempts to visit Singur. The major agitators, however, were members of the Socialist Unity Centre of India (SUCI), a fringe group with local influence, and naxalite student leaders who wanted to fish in troubled waters. The hapless target of their displaced rage was a Tata Motors showroom in central Kolkata.

The Congress was ambivalent as usual. Initially throwing its weight behind Mamata's agitation, it turned wary when visiting BJP president Rajnath Singh got a warm reception from the Trinamul Congress, his NDA ally.

Addressing a massive rally in Kolkata on December 3, Buddhadeb Bhattacharjee appealed to those opposing the project to revise their stand. "It is not a matter of opposing the State government any longer; the project involves the very future of the State... There can be no going back, especially now that the people have given us the mandate to go forward. There cannot be any progress without industry and commerce," he said.

For Buddhadeb Bhattacharjee this project is a prestige issue. On the day of his swearing in, Buddhadeb and Tata Sons' chairman Ratan Tata announced the project at a joint press conference. "The country has been scanned and the choice of West Bengal reflects the group's faith in the State's investment climate," Tata said at that time.

At a press conference towards the end of November, Ravi Kant pointed out that some of the proposals from other States were more to the advantage of the company, "but Mr. Ratan Tata has a soft corner for West Bengal and therefore we are here".

West Bengal's industrial revival is still in the nascent stage and the government cannot afford to turn down potential investors over the issue of project site. State Industries Minister Nirupam Sen explained to Frontline when opposition to the Singur project was still in the incipient stage: "At present we have to accept this situation and try and avoid multi-crop land as much as possible. But to avoid multi-crop land in all industrial projects is quite impossible."

Another argument that is often heard is the so-called availability of land of closed mills and factories. Nirupam Sen clarified (see interview) why it was near-impossibile to use these lands - on account of the legal tangles arising from the Sick Industrial Companies (Special Provisions) Act, 1985, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the West Bengal Estates Acquisition Act, 1953, and so on. Not only are these vacant lands scattered as relatively small plots, but quite often they are subject to proceedings of the Board for Industrial and Financial Reconstruction (BIFR), which may take up to 15 years for completion. Even otherwise, commercial banks have a lien on these lands.

The State government had got a detailed survey conducted by the consulting agency Webcon. Webcon's report, which came out in 2004, reveals that about 500 large and medium industries have a total of 41,078 acres, including about 20,000 acres in the sick tea gardens of North Bengal. The area may look impressive, but because of the legal formalities, very little of it can be retrieved in the short term and put to industrial use. For instance, until now the State government has allowed 10 sick industrial units to auction 106.39 acres of surplus land for their rehabilitation and thus prevented the redundancy of about 10,000 industrial workers.

In West Bengal, where the land-man ratio is adverse to cultivation and population density is among the highest in the country, no prosperity can be achieved by development of agriculture alone. Such efforts would flounder on the law of diminishing returns. Even for prosperous agriculture in West Bengal, where around 70 per cent of the peasants are small and marginal farmers and sharecoppers, it is imperative to transfer a large volume of the surplus labour force in agriculture to non-agricultural sectors.

Although the service sector, especially Information Technology is thriving in West Bengal, it calls for sophisticated skills and a high level of education. The answer, therefore, is to develop manufacturing activities, with ancillary units, to provide gainful employment and reduce the burden on land and the "disguised unemployment" in the rural economy. The consequent increase in overall productivity is expected to raise the State's income and government revenue.

Besides, the reduced burden on land will make available a larger area under the plough and raise productivity without any loss of food security. For, it is well known that most gains in agricultural output come not from bringing more land under cultivation but from increasing productivity per acre and per person.

Therefore, there is no alternative to rapid industrialisation if West Bengal is to catch up with other advanced States.