An IIPM Initiative
Friday, December 3, 2021


The Calcutta Closure


The Supreme Court verdict on Singur might have sealed the fate of industrialization of West Bengal, but it has given enough ammunition to Mamata Banerjee to possibly rule for years to come; Rajat Roy reports from Singur
RAJAT ROY | Issue Dated: January 5, 2017, New Delhi
Tags : Durgapur Expressway | SEZ | Mamata Banerjee | Mukesh Ambani | Adi Godrez | Azim Premji |

On the Durgapur Expressway, 40 km away from Kolkata, the sprawling blue sheds of Tata Motors’ half-finished Nano manufacturing plant stood for eight years. Now, after the Supreme Court gave its historic judgement declaring the process of land acquisition made by the erstwhile Left Front government illegal, the sheds have been pulled down. The sheds, broken into smaller parts, have now been kept in piles with other junk on the side of Durgapur Expressway. Majority of the landowners are yet to get back their land as the local administration is still working overtime to make the land cultivable again. In absence of the Nano plant and farming activities yet to begin, the place looks like a scrap yard. Indeed, it can easily be described as the graveyard where Bengal’s dream of industrialization has been buried.

With the Supreme Court’s verdict in her favour, Mamata Banerjee has achieved a historic victory over the corporate-government nexus that began a nationwide land grab movement in the name of SEZ, new industries and mines development. By leading the Singur movement to its successful conclusion, Banerjee has also ensured that the peasants in Bengal would continue to be the major plank of her support base for years to come. While that would be crucial for her party to win elections in years to come, there is no sign of any positive move forward in the industrial sector, where any serious big ticket investment has not taken place in the last five years of Mamata’s rule.

After Supreme Court’s verdict on Singur case, Mamata sent an open invitation to Tatas to come back to Bengal for fresh investment. She also mentioned that there was around 1000 acres of land kept ready near Jhargram, West Medinipur district which the Tatas could take to set up a new industry. Incidentally, at Singur, Tatas were given 997 acres of land, which they had to return to the state government after the court verdict went against them. Besides making some conciliatory remarks that West Bengal would remain in their radar for investment, the Tatas kept quiet about the offer made by Mamata. To show that the state government was urgently pushing the agenda of industrialization, the chief minister further said that the Tatas would have to decide on her proposal within a month. Still she could not elicit any response from them. The land is still lying vacant. Neither the Tatas, nor any other corporate house has come forward to set up any industry there.

It is not an isolated case. The industry is wary of committing to make substantial investment in Bengal. In the last five years, Mamata Banerjee’s government held regular meetings with big and not so big industry houses with a view to coax them into investing in Bengal. The chief minister herself and her finance minister Amit Mitra took the lead in meeting the industry honchos. Meetings were held in Haldia and Kolkata, and also in Delhi and Mumbai. On some occasions, people like Mukesh Ambani, Adi Godrez, Azim Premji and some other big players did attend the show. After those meetings, Amit Mitra would routinely claim that a number of MoUs had been signed between the state government and various business groups. According to Mitra, the total volume of investment proposals received by the state in the Bengal Global Business Summit (held in January, 2016) would go up to more than Rs 2,43,000 crores. On September, 2016, Mitra went on record saying that out of that money, around Rs 91,000 crore was in the process of being deployed . Some companies had already bought land and others were in the process of buying. He would often reel out names of some projects that had been just completed or were about to start production. But, invariably, those projects and the construction work began during the Left regime. Despite the upbeat mood expressed by Amit Mitra, the new big investment in industry during Mamata Banerjee government remained as elusive as ever.

The reason for such apathy from the business houses for any new engagement with the state was not unknown in the government circle. A study conducted on behalf of the WBDIC, the nodal agency of the state government that facilitates the process of investment by business houses, revealed the truth: there is a serious trust deficit between the industry and the state government. The report was not made public. It was circulated in close quarters. The people in the industry circle endorse the observation. But no one from the industry would like to go on record. Sources in Bengal Chamber of Commerce and Industry point out to the findings of the report but offer a cautious remark, ‘’It is too early to pass any judgment on Mamata Banerjee government’s performance in its efforts to attract big investment. The Mamata Banerjee government’s policy towards industrialization is no different from that of its predecessor Buddhadev Bhattacharjee regime. The difference lies in the process adopted by the Left government, which did not get approval from this government. It is true that the chief minister did visit some countries like Singapore, England and Germany, but her visits did not yield a single investment proposal. Still, she had been able to show case Bengal as a possible destination for investment. It might take some time before any real turn around takes place."

In 2013, a little over two years after she came to power, Mamata Banerjee unveiled her government’s industrial policy, textile policy, and medium and small and micro enterprises (MSME) policy all in one go, saying that public-private-partnership was welcome but a blindfold incentive scheme for setting up industries in the state would not be allowed. But that policy statement failed to ignite enthusiasm in the industry circle. Also, her strong opposition to SEZs remained firm. As a consequence, Infosys, the big name in IT industries declined the offer to set up its campus at Rajarhat New Town. Infosys was given land there by the Left government with the promise that it would be given SEZ status. Azim Premji’s Wipro also started dragging its feet in opening its second campus there. Wipro  too had got land there during the last days of Left rule.

The major obstacle that has put off industrialists so far is the government’s land policy. Mamata Banerjee is strongly opposed to any acquisition of land by the government. Be it for the purpose of setting up of new industry units or even government projects that could be said to be for public purpose. In a state, where land is scarce, and average density of population is highest in the country, land is much fragmented in smaller parcels. Average landholding in agriculture sector is less than a bigha (one bigha is equal to one-third of an acre). Singur is a case in point, where for the 997 acre of land, there were around 24,000 stakeholders, either landowner, or people depended on that land as daily wage labour or share cropper. Though Mamata insists that the industry must buy the land in the open market, most of the business houses are reluctant to do so. Their argument is that it would be impossible to negotiate with so many people for the purchase of land, and consequently, it would invariably involve middlemen, resulting into sharp rise in land price. They wanted the government to buy the land and hand that over to them or at to play the role of mediator in the process of land purchase from the open market.

While Mamata Banerjee and her government firmly rejected the proposal, it tried to pacify the industrialists by claiming that the government has built up a land bank and it has sufficient land at its disposal and the industry can choose from the government land bank. Amit Mitra has gone on record saying that the land bank is having 4000 acres of developed land for ready possession, another 4000 acres of land are being developed. Mitra refers to numerous closed industrial units and says that the government is mulling the idea of procuring land of those closed industries. For that a committee has been set up by the government.

After winning the peasants’ support with the successful conclusion of the Singur movement, the Mamata government now feels the need to change the anti-industry image her government has acquired in the wake of the episode. Amit Mitra is dismissive of the idea that the government is against industry. According to him, this is a propaganda initiated by the opposition. He stresses the point that being pro-poor does not necessarily follow that the government would be anti-business. On the contrary, he reminds all that West Bengal is now free from any labour strife and with electricity in surplus, the state is now the right destination for investment. He points out that the Tata Group, under their various subsidiaries, has 30,000 employees in West Bengal and they are recruiting more. Mitra has tried to dispel the allegation that industry has turned its face away from Bengal.

But the anti-industry image stays. Lack of new industry and closing down of sick industries pushed the unemployed youth to look for other sources of income. The political establishment, more so the ruling party has come to their assistance. With protective shield offered by the ruling party, the local youth and local party satraps turned extortion into a business the spread of which covered from industries to small retailers, people working in unorganized sector, rickshaw pullers, hawkers etc. Also, under the patronage of the ruling party, a section of youth have been encouraged to form syndicates that run business of supplying building material to the construction company. What started as a way to provide some alternative sources of income for a section of people who were displaced by the government during the Left regime in Rajarhat New Town, has now spread all over Bengal. The syndicates now compel the builders to buy inferior quality building material from them at a rate higher than the market price. The collapse of a under construction fly over in the heart of Kolkata brought out the fact that these syndicates, where the local leaders of ruling party are having stakes, have now been selling materials to government projects as well. Despite being aware of the growing menace, and causing disruption in business, the government took no effective measure to stop that. Sabyasachi Dutta, the chairman of Bidhannagar Corporation (Rajarhat New Town and Salt Lake are two areas that come under it), had gone on record during last election campaign, saying that the government would fall if it took serious measure to curb the syndicate business.

The opposition, mostly the Left, had time and again asserted that there was no way but to go for industrialization in the state to reduce the growing burden of unemployment. Former chief minister Buddhadev Bhattacharjee and the present CPIM state secretary Surjyakanta Mishra admit now that the process adopted during the land acquisition in Singur and some other places was wrong. But, they believe that eventually some agricultural land would have to be taken for the purpose of industrialization, and the government must play a role of active agent there. But they are yet to formulate a foolproof method of procuring land without creating hostilities among the peasants. Mamata is aware of the problem. One of her confidants tells, on the condition of anonymity, that Mamata realises that she is riding the tiger. The peasants do support her and look upon her as one who guards their interest. Mamata herself has reiterated that time and again. Now, in a land starved state like Bengal it is very difficult to get land for industry without hurting the peasants.

Already the Singur verdict by the Supreme Court has emboldened the farmers and they have started demanding higher prices for land acquired 10-15 years back. At some places Mamata had to bow to the popular demand and return land to the farmers and relocate the industry to other places. The demands for higher price and alternately return of the land to the original owners with some compensation (after the Singur model) are just becoming louder and louder. Since the peasants are the largest vote bank in Bengal, it is well nigh impossible for Mamata to change her "hands off" land policy. Thus Mamata has become a prisoner of her own politics of vote bank that has become a major impediment to industrialization in Bengal.

Rate this article:
Bad Good    
Current Rating 0
Previous Story

Previous Story

Post CommentsPost Comments

Issue Dated: Feb 5, 2017