Whose brakes failed?

Prem Shankar Jha

Hindustan Times, October 05, 2008

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Ratan Tata claims that he has taken the decision to pull the Nano project out of West Bengal with great sadness. He has held one, single, person responsible for his decision — Mamata Banerjee — who "held a gun to his head and pulled the trigger". Industry leaders have queued up behind him to predict a dire future for Bengal. "If it is difficult for the state to ensure security for someone like the Tatas," said R. Seshasayee of Ashok Leyland, "it is easy to imagine what will happen to others."

There is, however, another side to this story. Had you been listening closely to Tata's press conference, you would have heard him say, "We believe compensation has been paid and that it is a fair compensation." Paid by whom? Not by the Tatas. And that is the key to understanding why the company is so casually exiting West Bengal today. The Tatas did not pay for the land. The Rs 131 crore compensation paid to farmers and sharecroppers as of December 2006 was paid by the West Bengal government. The Tatas had taken the land from the West Bengal government on lease and the lease rent is a pittance.

In reality, therefore, the Tatas have pulled out so quickly because they had very little at stake in West Bengal. It is true that their investment in the Nano project runs to around Rs 1,500 crore. But the overwhelming proportion of this money has been spent on machinery — the hugely expensive robots that man the assembly lines, the tool and die, body and paint shops in any car plant today. The Tatas have been moving these out for some time. They will also move out generators, computers, specialised cabling and all other moveable items of office and factory equipment. Their final loss will thus be the flooring of their sheds, their investment in infrastructure, and the actual cost of erection of the plant and installation of machines. This will not be a small sum, and will be a dead loss, but one suspects that it will be much less than what West Bengal's government has sunk into the acquisition of the land.

If the Tatas are not quite the wounded victims that Ratan Tata has made them out to be, Mamata Banerjee is not quite the villain she has been portrayed as being. If the Left and future governments, both in West Bengal and in New Delhi, learn the right lessons from Singur, she may well turn out to be India's saviour. My eyes were opened to this possibility when I was shown Bengali TV coverage of how the land was actually acquired in 2006.

For the better part of 20 minutes, I saw sticks in policemen's hands rising and falling with metronomic regularity to the accompaniment of sickening thwacks of wood meeting flesh. As the beating continued, the policemen leant further and further forward. It was apparent that their prey were on the ground but still being beaten. I saw men in their 60s being led away with torn and bleeding head wounds, and weeping, bruised women being supported out of the villages by social workers and Trinamool cadres. There were endless reels of footage, but I could not take any more.

Very little of this footage had appeared in the national channels. And the media had made it out that it was the Trinamool that had blocked the roads, bottled up the villagers and 'forced' the police to resort to 'lathi charges'. No one bothered to ask just how the villagers' consent had been obtained. No one asked why 400 or so of them were demanding their land back. Instead, we were deluded with 'information' that most of the landowners were absentees, and already had jobs in Kolkata and elsewhere. Not one commentator mentioned that with all new non-agricultural jobs being created in the unorganised sector and absolutely no form of social insurance, the little bits of land that the owners had were their ultimate and only security in life.

Are the blood and tears of the poor a necessary price of 'development'? Was there no way of making the landholders and sharecroppers in Singur beneficiaries of 'development' instead of its victims? There was, but the Tatas never even considered it and took refuge in the legal plea that they were not involved in the acquisition of the land.

To see how easy it would have been to co-opt the landowners and sharecroppers, one needs to ask just one counterfactual question: what would have happened if the Tatas had decided to set aside just one quarter of 1 per cent of their annual sales revenue and distributed it as an annual royalty to the owners and sharecroppers, for the use of their land? With an annual turnover of Rs 5,000 crore (from 500,000 cars), the royalty would have amounted to Rs 125,000 per acre per year to be split between landowners and sharecroppers. To recover this added outlay, the Tatas would have had to increase the price of their car by only Rs 250.

Would Mamata Banerjee really have spurned such an offer? Would the farmers have allowed her to? A senior Trinamool member of the Rajya Sabha told me some weeks ago that if the Tatas were prepared to make such an offer, Mamata would most probably accept it. But the Tatas never made it.

Ratan Tata cannot be blamed for not trying an approach that has never been tried before in this country. But what he has proved, beyond a shadow of doubt, is that he is no Jamshed Tata.

Today it is imperative for industrialists not to draw the wrong lessons from the Nano debacle. The Tatas may be able to leapfrog to Uttarakhand, Haryana, Karnataka or Maharashtra. All those governments are rubbing their hands with glee at the prospect of 'bagging such a prestigious project'. But they haven't faced their people yet, and the poor will also be drawing their lessons from Singur.

The stark truth is that the country is on the brink of class war. Bastar is today its epicentre. The security forces are fighting a losing battle against an estimated 6,000 armed Maoists who are receiving substantial aid from the local people because the state of Chhattisgarh has lined up $7.28 billion of investment in steel plants and iron ore mines in the next five years and has given out more than 150 prospecting licences covering 400-3,000 sq km to companies wanting to mine iron ore, diamonds, gold and other non-ferrous ores.

Development consumes land, and faster development consumes it faster. Singur, and Bastar are only the beginning.

Prem Shankar Jha is the author of The Twilight of the Nation-State