Editorial:Lessons for West Bengal

West Bengal has lost Tata Motors’ Nano car project, and a factory that would have rolled out perhaps half a million cars a year once fully established. With Nano, it has also lost the best chance that the state has had in four decades to revive its industrial fortunes. What Jyoti Basu and his Communist comrades first did when they drove away both capitalists and capital in the late 1960s, only to realise the folly of their ways a quarter century later, has now been repeated by Mamata Banerjee. For the last 15 years, ever since Mr Basu appointed Somnath Chatterjee to head the West Bengal Industrial Development Corporation and seek out industrial investment, the Left Front government has been trying to attract capital back to the state. After years of trying, under Buddhadeb Bhattacharjee the state tasted the first successes a few years ago, when companies like Wipro decided to set up shop in Kolkata. But with first Nandigram and now Singur, Ms Banerjee has sent out a clear message: industry should not expect to be welcomed, and politics rules. The eagerness with which other states have made overtures to Tata tells its own story.

 

That does not mean West Bengal will not get any projects. There are others already investing in the state, like Jindal with a steel plant; even Tata has projects on which work continues. But the setbacks at Nandigram and Singur raise the level of uncertainty, and therefore the cost. Imagine the chief minister facing potential investors in Mumbai or overseas, to whom he has to sell West Bengal as an industrial location! Indeed, if one looks at the generous (even excessive) benefits that the state had to offer in order to bag the Nano project (virtually free land, permanently subsidised power, massive tax breaks), it speaks of the price that West Bengal has to pay to get back into businessmen’s calculations. That price will now be even higher.

Is there a way to avoid conflict, between the government and people whose land is taken away to house industrial projects? Yes, there is — and, ironically, the West Bengal government made virtually all the right moves. It offered compensation to not just landowners in the project area but also to those whose livelihoods would be affected by the stoppage of farming on 1,000 acres. It paid a price for the land that was in multiples of the prevailing rate in the area, before the project came on the scene and sent local land prices rocketing even further. And, as became clear, the vast majority of farmers was perfectly happy with the terms of the deal. Less than a quarter, and perhaps only a sixth, of the landowners were unhappy. But even those who question the role of the state in taking over land, for handing over to private industry, will have to concede that no project can come up if no compulsion is to be introduced when a small minority of landowners holds out.

As for Tata and all the other companies whose projects are stuck over land acquisition in states like Orissa and Jharkhand, one question that they should ask themselves is whether they can reduce the footprint of their factories. Maruti Udyog functions in Gurgaon with much less land than was given for the Nano in Singur (not counting the land meant for ancillary suppliers); so did Tata take too much land? As for governments, they need to take a clear position on whether prime agricultural land of the kind at Singur should be taken over for industrial projects, when there is so much wasteland that can be used for the same thing. If the Singur experience is not to be repeated, all concerned will have to learn some lessons.