Thursday, March 15, 2007

Avoiding Another Nandigram in the Push for Industrialization

The present Government is in a pretty bad situation when it comes to trying to jump-start industrialization. Everybody quotes China to the Government when it comes to attracting investments to the country; policies followed by the Chinese Government include making massive investments in infrastructure; providing numerous incentives to industries including land, resources, cheap labour and preferential tax treatments.
A lot of these are of course possible because the political structure of China is dictatorial whereby decisions are taken in a jiffy, and then enforced. There is not much choice about whether to agree with these decisions are not, if you disagree, you mainly keep quiet.As an example, if a project on the scale of the Rail line to Tibet was being planned, one could be sure that such a project would never take off in India. It would involve large scale environmental impact, and varied other concerns. Similarly, a mega-project such as the Three Gorges Dam could never come up in India. The environmental impact of the Three Gorges project is truly on a massive scale, and most of the impact is not positive. In India, the Sardar Sarovar dam project (which is on a smaller scale) has undergone massive delays due to concern about the impact, and due to state indifference about resettling of the refugees. This is the price that we pay for democracy. However, I have always felt that India's policies have always been inclusive to a fair degree, giving people an outlet to express their opposition, and this has often been compared to a pressure cooker situation, whereby if you don't give an outlet, the pressure will explode.
This is akin to something that is happening in China on a regular level, with around 80,000 reported incidents of peasant and rural clashes with the authorities over land acquisition (and other policies) in the previous year.
The current situation in West Bengal is threatening to break this inclusive discussion habit that we in India have. In the violent incidents at Nandigram yesterday, there is an eruption of discontent. The whole evolution of the situation shows the wrong policies that have been followed. The West Bengal government wants to bring about industrialization of the state, and that can happen only when agricultural land is taken over for setting up industries. One common myth in this is that taking over agricultural land this way will reduce the agricultural output of India. The truth is that the amount of land sought for such purposes is a miniscule fraction of the total agricultural and (much less than 1%). It is also true that agriculture is at the bottom of the economic scale, and societal income only increases when industrialization happens, with the setting up of ancillary units and more employment.
The problem is, such land acquisition needs to be thought out and done on the basis of the land owners and tillers agreeing to provide the land. What should happen is that the policy of land acquisition should compensate people who will be affected by this move (which means that in addition to land owners, others such as the landless tillers and those getting employment off the land should also be compensated). It is also important that the state not get into this business of acquiring land, instead land acquisition should be done by the private party (subject to the above policy). This will ensure that land compensation is more fair market, and reduce the political pressure that the state faces when a political opposition decides to oppose the policy.
In West Bengal, the CPM has been in power for so long that it believes that it is always in the right (the arrogance of the just). Hence anybody opposing their policy is always politically inspired, and in the wrong. Even when having to buckle down, as the West Bengal CM did when facing tremendous pressure, it has been a very grudging climb-down, and the feeling always has been that the backing down is only short-term. Yesterday's incident, when police fired to prevent a mob from becoming violent, is a result of that fear. It would have been more prudent for the West Bengal Government to user their political organization to convince people of the benefits, instead the cadre has always given an impression of being set for a confrontation. I have always felt that Mamta banerjee's agitation has been politically inspired (refer my earlier post), but the West Bengal Government has made it so easy with their ham-handed tactics.
What will be the net result of this agitation? Political parties, ever so fearful of public pressure and impact on 'aam admi' will try to slow down push towards SEZ. There will be more curbs, SEZ's that are not impacted by such agitations and problems will also get caught in such traps and slowdowns, and will give the impression of another flip-flop. And for the people of Nandigram, in the long term, they will be losers, since the benefits of industrialization and economic growth will happen in another district.

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posted by Ashish Agarwal @ 8:03 AM