Business Today

Singed by Singur

As the Tata Motors drama plays out, should West Bengal worry over future investments?

Somnath Dasgupta | Print Edition: October 5, 2008

Ancillary units of the Nano Project have also stopped work
Ancillary units of the Nano Project have also stopped work
I-d-o! i -d-o! industrial development officer! future aache!” says the man outside the West Bengal government’s New Secretariat building, hawking forms for a government job. The “future aache” (‘It has a future’) is said with a bit of defiance, as if the man himself does not believe it given the conflicts over land acquisition.

Over two years have passed since the government acquired farmland for the Tata Motors’ small car project, which was 85 per cent ready when an agitation and threats of violence forced the Tatas to suspend work. Trinamool Congress leader Mamata Banerjee finally agreed to send her representatives to talks with the state government with Governor Gopalkrishna Gandhi in the chair, and also called off the dharna.

Uncertainty hung over the project’s fate—and that of current and future investments in what is India’s third-largest economy—as this edition went to print. Will the Singur drama slow down the flow of investments? How bad will a Tata Motors pullout be? The Numbers So Far At the New Secretariat, T.K. Dasgupta, Deputy Director for Industries, is worried about the politicisation of the Singur issue. “The project should not be disturbed now as it will send bad signals,” he says, showing off the investment figures. In the 2001-05 period, the value of the total industrial approvals was Rs 38,409.72 crore. In 2006 alone, the figure was Rs 15,479.15 crore and the next year, it zoomed to Rs 64,949.93 crore.

Projects worth Rs 5,072.82 crore were also implemented. As apex industry body ASSOCHAM, the most ardent supporter of West Bengal as an investment destination, pointed out in a recent survey, steel and manufacturing alone accounted for investmnet proposals worth Rs 87,037 crore in the first six months of calendar 2008. Across sectors, steel’s share was 26.77 per cent, that of manubt facturing 22.98 per cent, and oil and natural gas 22.98 per cent.

Haves & have-nots

On the one hand are big ticket investors like Sajjan Jindal, whose JSW Steel is putting in Rs 35,000 crore to build a 10-million tonne steel plant in phases at Salboni in West Midnapore district, and Venugopal Dhoot of Videocon, who has lined up at least Rs 15,000 crore for a clutch of projects. Jindal and Dhoot have had no problems with land acquisition. Jindal’s land requirement was five times that of Tata Motors and although most of it was vested land, he did have to buy around 500 acres from villagers. On a recent visit to Kolkata, Dhoot said: “He (Tata) has to settle it.

This is a small matter…He has to settle with the farmers.” Dhoot pointed out that West Bengal is not dependent on any specific project. Then, there are investors like the Salim Group of Indonesia, whose clutch of mega infrastructure projects with a total land requirement of 28,450 acres, has been put on hold after the Nandigram violence of 2007, when locals rose against a land acquisition move and 14 villagers were killed in police firing.

Farmland for industry

Veterans of the Land & Land Reforms department say Singur and Nandigram happened not because farmers did not wish to part with their land but because they saw themselves being left out of the development process. “The farmer loses three things: land, livelihood and stability,” says an official, requesting anonymity. “

Just paying the present market value of the land is not enough—they must be compensated for the perpetual loss of income and given an alternative livelihood from Day One.” As an insider says, the Singur location would have been better for a food processing hub on the private public partnership model. “The government used old records of the pre-bargadar period when the land was mono-crop. Over the past two decades, the land has become multi-crop.”

Is there a settlement? (L to R) Becharam Manna of Krishi Jami Rakha Committee; Subrata Gupta, MD, WBIDC and Neelam Meena DM, Hoogly at the Singur site
Why Bengal? Why not?

West Bengal and the east in general cannot be ignored, because of the vast deposits of various minerals and its location as a gateway to South East Asia. There is a huge potential for growth that had been suppressed by militant trade unionism over the first two-and-a-half decades of Left Front rule. Rajeev Singh, Secretary General of the Indian Chamber of Commerce, says Singur is a small drop in the flood headed for West Bengal. “But it will be a disaster for fresh investment if the Tatas decide to pull out of Singur,” he concedes, “because it will be a defeat for the Chief Minister.” Sanjay Budhia, ICC President and Chairman of the Confederation of Indian Industry’s National Committee on Trade Policy, says he has no doubt that the Singur project will come up. For over five years now, Budhia and some others like him have largely succeeded in helping the state shed its negative image.

He says a solution will be found since industrialisation has become a peoples’ movement, and the stakeholders have shown a flexibility of approach. “This kind of situation can happen in any state,” says Budhia, pointing to the steady stream of investors who have kept calling on the state. “Investors do not come to make courtesy calls or for charity… they come for hard-core business interests.” The state’s trump card, he says, is Chief Minister Buddhadeb Bhattacharjee. “Once, Jamshyd Godrej, asked me: ‘Sanjay, can you export your chief minister to us?’”. Singh echoes him: “A big factor is the Chief Minister—the way he has gone ahead with very industryfriendly policies... I think that definitely attracted everybody.

Once people found that there is a government and a CM who are willing to help, willing to facilitate, things started to happen.” The Chief Minister himself stresses that Singur is an aberration and not the trend for the future. “West Bengal is not Singur… Some people may create problems in our path of industrialisation. But no one can stop it,” he said.

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