Saturday, August 30, 2008

A WAY OUT FOR SINGUR - Farmers can still be given a stake in the ownership of the plant

- Farmers can still be given a stake in the ownership of the plant

The acquisition of land by state agencies to meet specifications set by private sponsors of industrial projects has emerged as one of the gravest of national concerns. Industry without land to build it upon is inconceivable. Even so, in an overpopulated country where, despite six decades of independence, three-fifths or more of the nation continue to be dependent on agriculture for their livelihood, land acquisition is no easy matter; and this irrespective of the nature of compensation offered. There is a crowding of uncertainty in peasant minds. The process of capitalist development, very often labour-displacing, does not assure those dispossessed from land that a fair number from amongst them would find employment in the factories coming up on the holdings they once tilled.

It is a sensitive issue, needing delicate handling. Such delicacy is additionally called for when it is a Left regime long championing the cause of the deprived, land-hungry peasantry — as in West Bengal — that has to do the acquisition.

Such is the story of Singur. The Tata Group made an overture to the state government to set up a small-car factory with an annual production capacity of 3,50,000; each car was promised to be sold at Rs 1,00,000. The Tatas wanted 1,000 acres of land for the purpose, with good access to Calcutta and the national highways. They chose, with state government approval, a tract of contiguous land in Singur in the district of Hooghly. This consisted of arable plots with quite a few holdings taking two or three crops. According to all accounts, the state government did not do any serious bargaining with the Tatas on the choice of land, nor did it try to persuade them to pick non-arable terrain in the dry, remoter districts.

Much worse, it did not think it necessary to have prior consultations with local panchayat bodies or with representatives of peasant organizations. A statute enacted in 1894 during the colonial heyday was deployed to take over the land. Resistance gathered and soon assumed a truculent form. Political groups of diverse hues coalesced to take advantage of the situation; agitation often tended to go out of hand. The Tatas, with help from the state government, nonetheless managed to take possession of the land. Work has been in progress, even though protests, determined and well-organized, have continued, sometimes leading to violence. As the dateline for releasing the car in the market approaches, the main opposition party in the state has threatened a total blockade in the area. A kind of showdown has been reached over the refusal by owners of holdings totalling up to 400 acres to accept the money offered by the West Bengal Industrial Development Corporation for their taken-over land and their demand to have the holdings back. The price offered by the state agency was, in fact, substantially higher than the prevailing market price; this is true even for the 400 acres at the core of the dispute. Discontent, however, has persisted. Heavy reverses suffered by the Left Front in the area in the recent panchayat polls have further queered the pitch. Opposition groups have mobilized their forces and are adamant regarding the refusal to allow the newly-built cars to move out of the factory site unless the holdings belonging to the recalcitrant farmers are returned. It is, without question, an explosive situation. Should the forces of law and order attempt to clear the blockade by adopting rough, crude measures, it could lead to an extensive bloodbath. That would make the mess a great deal messier.

It is time for a cooling of heads on all sides and for accepting ground realities howsoever distasteful. To restore to unwilling farmers land ‘snatched’ from them is clearly not feasible, but not for the reason the state government has been adducing. The 1894 act, it has been claimed, allows no scope for returning land once acquired. This is a fatuous argument. The government can apply the provisions of that particular act itself and wrest back from the Tatas the 400 acres on the ground of ‘a public purpose’. Restoration and maintenance of law and order in the state are overriding public purposes in all situations.

Still, these holdings cannot be returned for an altogether practical reason. The contentious plots are discrete, scattered all over the factory site and constructions have already come up on them. Even if it were possible to identify the individual plots, to demand them back at this stage is in effect to demand the dismemberment of the plant.

If, because of the doggedness of resistance, the Tatas were to fold up, public opinion, already under intense siege by the media, could well swing against those currently manning the barricade. At the same time, in case no positive gestures are shown towards farmers on whose behalf such sustained mobilization of forces has taken place, antipathy against the Left Front regime is unlikely to abate. The Tatas too would have to consider carefully the burden of cost if circumstances tempt them to abandon the Singur project. It would be far more desirable to aim at a compromise everybody concerned could live with.

A discarding of closed minds is called for. The Tatas have their reasons to act superior, but they could not have acquired on their own the land now in their possession unless the state authorities moved on their behalf. They have made only a token down payment for the acquired land. Moreover, the discounted present value of what they have promised to pay in instalments to the WBIDC in a very distant future is next to nothing. And not just that; the state government has provided them with a cash loan of Rs 200 crore and granted a VAT holiday for the cars rolling out of Singur.

The way out of the Singur impasse lies in re-negotiating the terms of the agreement between the state government and Tata Motors. The latter should be persuaded to make immediate arrangements to give a separate legal corpus to the Singur enterprise. Twenty-five per cent of the equity of this entity may be transferred to the state government as compensation for the land and other facilities promised to the industrial giant. The state administration could follow this up by taking two separate initiatives. First, it could announce a 100 per cent bonus payment over and above the price at which holdings have been acquired for the project. The bonus is to cover all the acquired plots, including those for which payment is outstanding. The state authorities, anxious to get things back to normal, have already hinted at their willingness to consider such a measure.

The second initiative the state government must take is of far greater significance. Of the 25 per cent of the total equity passed on to it, while it could keep 12.5 per cent for itself, the other 12.5 per cent should be distributed among the owners, the sharecroppers and the workers regularly employed in each taken-over holding. Consider the implications of the proposal. The Tatas are on record that they will assemble 3,50,000 cars in Singur every year. Assuming they hold the price at Rs 1,00,000, and the rate of return is about 10 per cent from the sale of each car, the expected annual profit from the project should be around Rs 350 crore with full capacity production; the accrual for the state government would work out to roughly Rs 45 crore; another Rs 45 crore would flow to the farming community.

As part of the total package of the new agreement, the state government could ask for a seat on the board of directors of the Singur corporate unit. It might thereby ensure that the details of the understanding are duly pursued and the planned ancillary units provide satisfactory scope of employment for the neighbourhood youth.

With the peasantry assured of a stake in the ownership of the Singur plant, it is bound to be a totally transformed situation. One has at least reason to hope so.