Unwilling land-losers to
the Tata Nano project in Bengal remain the biggest victims of the politics that
brought Banerjee to power
By Ishita Ayan Dutt | Kolkata
July 23, 2013
Business Standard, Columns
Singur has always been kind to Mamata Banerjee.
First, it resurrected her political career. Then, just days before the
panchayat elections this month, as angst over an unending wait for the return
of land acquired for Tata Motors' small car project from farmers who did not
wish to sell was growing, the Supreme Court suggested that the company return
the land.
Banerjee and Singur share a history that dates
back to 2006. On May 18, that year, a beaming Buddhadeb Bhattacharjee, who had
just been sworn in for a second term as chief minister, announced - flanked by
Ratan Tata and Tata Sons' brass at Writers' Buildings - that the project to
make the world's cheapest car, the Nano, would be located in Bengal. "How
do you like the beginning?" he asked reporters, a reference to his attempt
to attract big business to Bengal. Little did he know that this signature
project would mark the beginning of the end of the Left Front's 34-year
dominance in the state.
It was Bhattacharjee's ambition to put Bengal
back at the forefront of industrialisation, and he believed the Nano project
was the first step towards realising it. Getting the project to locate itself
on agricultural land about an hour's drive from Kolkata wasn't easy. Tata
Motors' interest came with the rider that the state government should offer
fiscal incentives equivalent to the value of those offered by Uttarakhand,
whose backward state designation allowed it to deliver income tax and excise
duty relief.
Naturally, the incentive package an eager state
government devised for Tata Motors was extremely friendly. It offered the
following:
(a) Industrial promotion assistance from the
state industrial development corporation in the form of a loan at 0.1 per cent
interest for amounts equal to the Value Added Tax and Central Sales Tax the
Bengal government received on Nano sales in each of the previous years ended
March 31. The loan, with interest, was to be repayable in annual instalments
after the 30th anniversary of the plant starting sales.
(b) A 90-year lease for 645.67 acres at Singur
at an annual rental of Rs 1 crore for the first five years. The rent would
increase 25 per cent after every five years for 30 years; Rs 5 crore a year
from the 31st year with an increase of 30 per cent every 10 years till the 60th
year; Rs 20 crore a year from the 61st year to the 90th year.
(c) A loan of Rs 200 crore at 1 per cent
interest repayable in five equal annual instalments from the 21st year.
(d) Electricity at Rs 3 per kwh. If the rates
were raised more than Rs 0.25 per kwh in any block of five years, the
government would provide relief through additional compensation to neutralise
the increase.
It wasn't this package, which would have meant a
significant forfeiture of state revenue, that exercised the politics of West
Bengal as much as Banerjee's decision to make the discontent of 2,000-odd
unwilling land-losers - who accounted for roughly 180 acres of land - the
centre of her political campaign.
But from August 24, 2008, Banerjee and her party
laid an indefinite siege to the area around the plant. She claimed unwilling
land-losers accounted for 400 acres and not 181 acres as the state claimed. The
400 acres, she felt, could be retrieved from the vendors' park, which was
adjacent to the mother plant, and the remaining 600-odd acres could be reserved
for the project.
The demand was untenable to Tata Motors. To keep
the cost of the Nano at Rs 1 lakh, it was imperative to maintain the integrated
nature of the project. With Banerjee's energetic help, the protests reached
such a pitch that Ratan Tata announced the headline-grabbing decision to
relocate the project, which it did with even more fanfare to Sanand in Gujarat.
Despite this, Banerjee as chief minister never
budged from her position. Hours after taking charge at Writers' Buildings, the
state secretariat, she announced the Cabinet decision to return land to
unwilling land-losers. After a flip-flop over an Ordinance, the Singur Land
Rehabilitation and Development Bill was passed in the West Bengal Assembly on
June 14, 2011, vesting the entire land allocated to Tata Motors and its vendors
with the state government.
A week after the Bill was passed, Tata Motors
moved court challenging it. The first round went to Banerjee. A Calcutta High
Court single-judge order declared the Act valid. The Division Bench (moved by
Tata Motors), however, set aside the single-judge order and struck down the
Act, primarily because it was in conflict with the Land Acquisition Act of
1894. The state then filed an appeal in the Supreme Court.
It was while hearing an appeal challenging the
quashing of the Act that the Supreme Court asked the Tata group to make its
stand clear on the leasehold rights over Singur. But it is unlikely that the
Tata group will give up the fight. It's not just about the land; for the group,
it's as important to clear its name from the Banerjee government's allegation
that it had "abandoned" the project, which is the basis for the
Singur Act. In reality, the plant, at the time of pullout, was 80 per cent
ready.
Tata Motors had invested over Rs 1,800 crore in
developing and levelling the land, and constructed the plant in 13 months.
Trial production had even started. "...no stone was left unturned to
ensure that commencement of production happens in time to meet the targeted
launch date of November, 2008," the company's petition to the court said.
Thirteen vendors had also finished constructing their plants, and 17 others
were at various stages of construction.
Hypothetically, even if the Supreme Court
verdict goes against Tata Motors, returning the land would be well-nigh
impossible. The land belonging to the unwilling farmers doesn't add up to 400
acres, as Banerjee has repeatedly claimed, and more importantly, it's scattered
over the 997 acres. Then again, 11,000 farmers who willingly sold are likely to
object if their land were bagged by unwilling farmers, when they had actually
given it for an industrial project. Indeed, they, too, are in court challenging
the Act.
Still, the court's comments have breathed fresh
hope into the "unwilling" farmers of Singur. They have waited seven
years. They took a leap of faith when Banerjee told them their land would be
returned. But so far, they have neither received the compensation offered from
the state government (because they refused to accept the cheques and thereby
became unwilling) nor the land. They remain the biggest victims of Banerjee's
populist politics.
