Saturday, October 04, 2008

Tata leaves Singur, tears into Mamta Banerjee

The Nano project was a dream for Ratan Tata, and he was wooed by many states eager to get this prestigious project to their state. Besides the prestige, the project was also expected to generate jobs (the main project plus ancillaries are expected to be big business). Of course, there was the expectation that land needed to be sought for this purpose. And therein lies the problem. When a project needs a major amount of land, the land acquisition is a problem, and given the increase in industrialization in the country, we will continue to face more problems. Land fragmentation is so high that to get the required amount of contiguous land for a factory or a major project means negotiating with a large number of farmers. And this is where the state steps in - the state, in situations where it is a question of industrialization, can actually acquire land at the market rate from farmers for 'public purpose'. There has been doubt in the past about whether acquiring land for a private company is a public purpose, and a recent Supreme Court judgment has sanctioned this - the court makes clear that public purpose need not mean that land only needs to be used for a Government need, but any project that generates employment and is beneficial for the local economy can be termed as a 'public purpose' project.
For the romantics who worry about a loss of village life, about the loss of land from farmers, and so on; one should ask them to live in villages for some time, especially with fragmented holdings; then they will realize that a village life is not so romantic. The known path for economic prosperity is where an economy moves up the path of industrialization, away from an agricultural focus and more into manufacturing and services where the value added is much greater. This is not meant to say that farmers land should be acquired just like that. Acquiring land for a project needs careful study; I believe Gujarat has a policy whereby there is an evaluation whether waste land can be used for this purpose, and only after that, is land taken from farmers. Farmers and others (landless laborers, sharecroppers, etc who are not compensated for land acquisition) affected by land acquisition all need to get a stake in the project, whether that be through granting them a mechanism like shares in the project, making sure that locals get enough jobs, etc.
Education is also an important part of the whole acquisition ball game. Typically, political parties don't take it very kindly when their policies are opposed by another political party. One way to avoid this is through educating villagers about how this will be beneficial to the local economy and to them (you can only do this if there are actual benefits).
Onto the current case. This is a mystery; you have a Communist Government trying to enforce a industrial project, and you have an opposition maverick politician using the acknowledged Communist methods of protest - use propaganda, rally people, block the local economic movement by blocking the main road artery, and so on. She succeeded to such an extent that the West Bengal Chief Minister could not even question the locus standi if Mamta Banerjee ? Nobody even attempted to ask as to how the Trinamool Congress claimed to be a representative of the local farmers and others. Mamta quite clearly sees this as a way of depicting the CPM as anti-poor and anti-farmer and try to rally the rural votebank behind her. In the short run, this has caused a crisis of confidence in West Bengal's ability to attract businesses:

West Bengal's worst fear has come true. Ratan Tata announced on Friday that he was leaving Singur, taking with him the Nano car project and the state's dream of an economic revival and leaving it with a tattered image in the investor's eye. The Nano project will also take with it all vendors despite the huge shifting costs, leaving a 1,000-acre black hole in the lush green Singur farmlands where Buddhadeb Bhattacharjee had hope to reap a huge political dividend as well.
On Friday, a ''distressed'' chief minister heard Tata Group chairman Ratan Tata's message, loud and clear. He made fervent pleas to Tata to stay back and keep his Rs 1,500 crore investment, even argued with Ratan Tata that his decision wasn't correct but couldn't change the industrialist's mind. The Tata Group chairman said he wasn't the one to blame for things coming to this pass. He squarely blamed Mamata Banerjee for pushing him to take the pullout decision, two years after his tryst with the Nano car factory in West Bengal.

What Ratan Tata says is quite correct. If he is setting up an industry, he would want to do it in an environment which is conducive to business; this is a basic need for having a healthy and prosperous business. The fact that Mamta Banerjee did all sort of things, including tacitly encouraging physical attack on the plant's workers would have terribly shaken Ratan Tata's confidence about the reception his factory is likely to get on an ongoing basis.

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posted by Ashish Agarwal @ 10:21 AM