Oct22 Singur

THE SCHOLARS’ AVENUE

FEATURES A V E N U E

² W E D N E S D A Y , O C T O B E R 22 T H 2008

3

SINGUR - A Wake-up Call

KGP

Singur

“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.

The 30 year old Marxist Government finally seemed to have woken up to the changed dynamics of a globalized world. The change was all the more visible when Mr. Ratan Tata announced the setting up of a small car factory at Singur the very day Mr. Buddhadeb Bhattacharya was sworn in as Chief Minister on 18th May, 2006. With a SEZ at Nandigram also planned, Mr. Bhattacharya looked set to change the image of West Bengal into an investor-friendly one. Presently, Tata motors has pulled out of Singur forsaking its Rs. 1500 Crore investment. The Government has accepted

In the eyes of the law While Singur is a particular case in point, land acquisition has n e ve r b e e n e a s y f o r t h e Government. The Land Acquisition Act, formulated by the British way back in 1894 was adapted in more or less the same for after Independence and enables the state to expropriate any private property forcefully for 'public purpose', with due monetary compensation to the owners. The underlying logic lies in the principles of Utilitarianism and the consideration of community welfare over an individual's right to property. Unfortunately, the law is inherently imperialistic and successive Governments have only worsened matters by taking full advantage of the ambiguity of the 'Public Purpose' clause. Whenever conflicts with the judiciary arose (See Box, R. L. Aurora vs. State of U.P, 1962), the Govt. brought about amendments (1962 and 1984) which only strengthened its arm. The term ‘Public Purpose’ was

“The

Land Acquisition Act did not contemplate that the Government should be made a general agent for companies to acquire lands for them for their private profit” - Supreme Court expanded to include “companies that are engaged in or are planning to engage in any industry or work for public purpose''. With this, the state could virtually classify any acquisition of land to be in public interest. Since then, the courts have been indecisive on the issue, with one judgement ruling that 'The Government is the best judge in deciding whether acquisition is for a public purpose or not'

Nandigram as a failed case of forced land acquisition; with a dented image not just in the eyes of the industry but also the workers and farmers whom it claims to represent. So what went wrong? The proposed 997 acres for the Tata small car plant was mostly fertile, multi-crop land, located in one of the most a g r i c u l t u r a l l y p r o d u c t i ve r e g i o n s o f We s t B e n g a l . Unwilling farmers standing to lose their only source of income naturally erupted in protest and the state's ill-preparedness was clear in the inept handling of the

crisis. The Government resorted to brute force to quell protests , involving both the state police and CPI (M) cadres to coerce people into accepting the compensation package offered. Although forcible acquisition of land for a ‘public purpose’ is the state’s legal right under the Land Acquisition Act (See Land Acquisition - A Legal Perspective), there were two major issues on which the Govt. was caught on the wrong foot. (See Box) These let Ms. Mamata Banerjee to creep in and the communists ironically found themselves fighting on the side of a capitalist business house. The agitation claimed its

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 rate of 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 is accounted at the rate of 6%. Such compensation also neglected the expected increase in the value of the land post development. Most of the small farmers are poorly skilled and the absence of a rehabilitation package meant that unemployment was a very real prospect for most of them. Cost of wooing the Tatas The enormous subsidies and incentives provided by the state Govt. has raised several eyebrows. A Rs. 200 crore loan at 1% rate of interest, VAT proceedings being handed back to the company as loan, Rs. 130 crore as compensation to farmers; all add up to a straightforward subsidy of Rs. 12 crore a year on the land purchase. These benefits are required to support the Nano project. But is the state justified in using tax payer money for offering these enormous benefits to a private venture?

What needs to be done? The basic question of SEZs on prime agricultural land still remains unanswered. The Standing Committee on Commerce in its report on The Functioning of Special Economic Zones in June 2007 recommended the use of only waste barren land for SEZs; to use single-crop, rain-fed land in unavoidable situations and to ban altogether the use of multicrop, irrigated land. None of these have found any mention in the amendment bill, an oversight that is too glaring to ignore. Industrialists cannot be blamed for willing their factories to be placed at wellconnected places with abundant resources. It is the Government's responsibility to provide the necessary infrastructure to make it viable for SEZs to be set up on wastelands such as the Thar Desert. Russia's Siberian industrialization (without the

slave labour) and the Shenzhen SEZ (set up on coastal wasteland) are the paths to follow. The Government's callous approach towards basic infrastructural development is the major reason for the failure of the SEZ model in India, as opposed to its success in China. The people affected too have to be taken into account. Slogans like “China was yesterday, India is today” will only remain the empty rhetoric that they are unless the present primeval outlook changes. The corporate world, by itself needs to follow the example of visionary industrialist J R D Tata, who had the courage to set up base in a barren land and convert it into the sparkling, welladministered city of Jamshedpur. India needs more of such visionaries. Let's hope there are more.

victims, the most horrific being the rape and killing of an 18 year old girl inside the factory premises. The culmination of these events was the 'gherao' of the factory which forced the Tatas to pull the plug. The recent events are too fresh to be reiterated here.

The SEZ Question In an overzealous drive to copy China's Special Economic Zones (SEZs) model, more than 500 SEZs have been sanctioned covering around 500,000 acres in total. This has meant widespread acquisition of prime agricultural land for both public and private sector enterprises, often with meagre compensation and no rehabilitation. Small farmers have been the worst hit, with the land going in huge chunks to big corporate houses, a reversal of the Land Reforms era. Singur and Nandigram were only waiting to happen. The Government seems to have woken up to some of these concerns, going by the provisions of the Land Acquisition Amendment Bill 2007. 'Public Purpose' is redefined to include only defense purposes and infrastructure projects. The Government can now acquire land for private companies only if 70% of the required land has already been obtained by the company through direct negotiation with the land owners. The Rehabilitation and Resettlement Bill 2007 has also been simultaneously tabled which è Where should the line be drawn between public good and private profit? è Should land acquisition solely be the responsibility of corporate houses or is state intervention necessary? è Who does the state bear greater responsibility towards– the farmers who stand to lose their livelihood or the private developers?

provides for better compensation packages for tribals, forest dwellers and land tenants taking into account the intended use, future value of land and a social impact assessment. Alternative employment and not compensation is the key issue here as simply handing out a lump sum of money does not serve the purpose. The old adage about teaching a person to fish rather than giving him a fish holds. Companies and the Government should ensure that all displaced people are given sufficient training to make a living.