03-27-2007, 12:28 AM
www.business-standard.com/common/storypage.php?autono=278671&leftnm=5&subLeft=0&chkFlg=
<b>Catch-22 in West Bengal</b>
Kanika Datta / New Delhi March 24, 2007
The policies that kept the Left Front in power for 30 years are proving major
obstacles in the state's bid to industrialise.
In 2005, the West Bengal government started acquiring farmland in Bhangar, 25
km from Kolkata, for a 100 km, four-lane expressway and township to be
constructed by Indonesian giant, the Salim group.
Soon after, Trinamool Congress leader and former railway minister Mamata
Banerjee lost no time summoning a rally, attended by more than 50,000 people,
to protest the appropriation of farmland for industry. Significantly, Abdur
Rezzak Mollah, the Left Front's land reforms minister, raised questions about
viable rehabilitation packages for farmers who would lose their land.
Subsequently, in state elections in 2006, the Bhangar assembly seat, which had
been a CPI (M) stronghold for decades, was narrowly won by a Trinamool
Congress candidate.
Though the protests were localised, Bhangar was a clear signal that the ruling
four-party Left Front would see turbulent times over land acquisition. Yet,
within the year, Chief Minister Buddhadeb Bhattacharjee announced plans to
acquire larger tracts of farmland as the state's industrialisation drive went
into high gear.
Soon, more vocal protests were heard in Singur, 40 km north of Kolkata, and
Nandigram, 150 km south of the city, respectively, locations for the 1,000-
acre hub around Tata Motors's small car project and the 14,000-acre Special
Economic Zone (SEZ) for the Salim group.
Last week, when villagers in Nandigram were killed in clashes with the police,
West Bengal became a national symbol of the evils of unfettered
industrialisation in general and SEZs in particular.
One of the world's longest-serving Communist governments now suffers the
ignominy of being labelled 'anti-people'. Indeed, as the CPI (M), the leading
constituent of the Left Front, has discovered to its chagrin, its faithful
rural support base is proving inconveniently intractable in the state's bid to
stoke industrial investment.
This has put the Left Front government in a bind. With returns from
agriculture diminishing, the state urgently needs to industrialise. To
bootstrap the process, however, the state needs more than 1,00,000 acres of
land. Half of this must come from agricultural land, which covers 68 per cent
of the state's land mass.
A land ceiling Act, which limits the acquisition of agricultural land to 12.5
acre, has meant that most of the acquisition must be done by the state rather
than the private sector (the Act has now been referred to a standing committee
for possible amendment).
Yet, as Nandigram has shown, the government cannot take the rural support
base, which sustained it for for three decades, for granted in this land
acquisition drive.
Ironically, the spectacularly successful land reforms that handed land to
small farmers and share-croppers (or bargadars) in the seventies (known as
Operation Barga) have become a source of weakness. West Bengal's land reform
programme was unique in that, unlike Punjab and Haryana, it created a green
revolution based on a small peasant economy. With high-yielding seeds and deep
tubewell irrigation provided by the state, Bengal was able to achieve high
yields ' two or three rice crops a year ' with average landholdings as small
as 5-7 acres.
Today, West Bengal produces around 8 per cent of India's cereals and is one of
the country's principal vegetable producers.
The flip side of this unique green revolution was that, as a generation of
landholders passed on, multiple inheritors have acquired even smaller plots of
land. Today many own just three or four bighas (three bighas = one acre).
Over the decades, growing land fragmentation, declining soil fertility and a
falling water table have made farming an unviable business for Bengal's 1.2
crore farming community. This fact is evident in a paradox highlighted by
economist Omkar Goswami. Writing in the Kolkata daily The Telegraph, he
pointed out that despite impressive growth in agricultural productivity and
farm incomes, rural household consumption in West Bengal was 9.6 per cent
below the national average in 2001-02.
'It doesn't speak well of a state that lays claim to agrarian dynamism [that]
its rural households consume only 4.3 per cent more than the average rural
family in Bihar,' he writes.
Not surprisingly, the second generation of small-holders has been uninterested
in farming, increasingly turning to the cities for jobs. Today, almost half
the rural population earns its income outside agriculture.
No one understands these inherent contradictions in West Bengal's economic
future better than Buddhadeb Bhattacharjee, who took charge in 2001, and a
small element within his government.
As state industries minister Nirupam Sen told Business Standard, 'The success
in agriculture cannot be sustained. We need to take the pressure off
agriculture and land is required for industrialisation.'
Yet, industrialisation in West Bengal had always been a controversial issue.
Powered by its rural support base in the seventies and eighties, the Left
Front government did little to support industry.
In turn, plagued by state-supported union problems and a chronic shortage of
infrastructure, industry began retreating in favour of more congenial
locations elsewhere in India. Big groups like the Birlas, Hindustan Lever,
Britannia, the Thapars and so on sought to locate their new investments in the
west and north.
Despite being isolated within his party and the Left Front, Bhattacharjee's
efforts have largely been to try and reverse decades of neglect. But
globalisation has changed the nature of the game. Integration and economies of
scale require vast tracts of land to be acquired for industrialisation.
Indeed, the state has attracted numerous projects that require thousands of
acres (see chart), that will displace large numbers of people on fragmented
land-holdings. In Nandigram alone, the Salim group's chemical hub would have
displaced more than 40,000 people.
Till the Nandigram crisis, the pro-changers in the government seem to have
assumed that the Left's stranglehold on the countryside precluded the need for
sensitive and well-crafted communication and rehabilitation programmes ahead
of the land-acquisition drive.
This apart, years of industrial neglect have also meant that, unlike Gujarat
and Maharashtra, there is no credible demonstration of the benefits of
industrialisation. Outside of Kolkata's polluted outskirts, there is little to
convince the rural populace to substitute the seemingly solid assurance of
land ownership for the ephemeral gains of factory jobs.
Certainly, on the outer edges of east Kolkata, where vast tracts of farmland
have been given over to mega-housing projects and factories, there appears to
have been no virulent protests to land acquisition.
At Singur, some 4,000 farmers representing 300 acres of land have refused to
accept compensation. But most other landholders here were absentee farmers
with jobs in Kolkata who were willing to sell their plots. Thus, despite
sporadic protests here, the Tatas have been able to power ahead with the
project, albeit under heavy police protection.
A wall enclosing the land is already up and workers from Shapoorji Pallonji,
the Tatas' major contractor, have started building roads and levelling the
land. The first Rs 1 lakh small car is expected to roll off the ramps by 2008.
Nandigram, however, was a potent demonstration of Bengal's Catch-22 situation.
It is an isolated and starkly backward group of 40-odd villages in which the
inhabitants own land, but little else. Most villages here have no electricity,
few pucca houses, and landholders subsist on three crops of rice and
vegetables.
Betel leaves represent the only commercial crops and brick kilns constitute
the only industrial activity. Annual incomes vary between Rs 18,000 and Rs
20,000. Literacy rates here are as low as 27 per cent, against the state
average of 64 per cent. Many of Nandigram's younger sons travel up the river
to the industrial hub of Metiabruz to work at low-paid jobs.
Certainly, the plan to set up a chemical hub here made both business and
economic sense. Nandigram is close to the port of Haldia through which a
pipeline would import the raw material. The hub would, as Sen said, 'change
the economic pattern of Nandigram'.
For the villagers, however, this transformation is far from evident, not least
because no one from the party has made a case for it. As they see it, they
will lose their land and livelihood. 'What will I do with the compensation
money'? asked Sudarshan Pain, who farms one acre of land and runs Ma Kali
retail outlet selling fertiliser and pesticide.
He and many others, mostly over 30 years, also doubt their employability in
the Salim group project. 'What jobs can they give us? They will need engineers
and computer specialists, we only know how to farm,' said Pain. 'Tell them we
don't want any change, we want to live just as we have been doing for years,'
an elderly woman added.
Ironically, last week's tragedy here took place after Bhattacharjee had
unequivocally announced that the SEZ would be scrapped following virulent
protests in January this year.
But by then poor communication stoked by simmering discontent boiled over into
pure political rivalry. With the local administration cut off from the area by
road blockades, the local CPI (M) strongmen, fearing a loss of control in
other parts of rural Bengal, decided to reassert their power.
The police were ordered in on so-called intelligence that Maoist guerillas
were operating in the area. In the ensuing confusion, they fired on villagers
including women and children who had been pushed to the front. The death toll
is yet to be officially verified. Police sources did not rule out the presence
of lumpen elements of the Left who committed atrocities as well.
After a stormy meeting of the Left Front a day later, Bhattacharjee merely
reiterated what he'd said in January that there would be no SEZ in
Nandigram. Meanwhile, the area has become a green fortress, subject to brutal
political rivalries between the Trinamool Congress and the CPI (M).
In the aftermath of Nandigram, the state government has finally understood
that the success of its industrialisation programme depends on winning the
battle for the hearts and minds of rural Bengal. As Sen has promised, 'The
state will go beyond compensating people. They will be rehabilitated.'
Meanwhile, investors, though worried, appear to be backing chief minister
Bhattacharjee. No one has pulled out yet, though they admit that Nandigram
might set back their plans for a time. The Salim group says it will continue
to look at other sites in the state.
Adds Venugopal Dhoot of Videocon, which has heavy commitments in the state, 'I
believe in Buddhadeb, he is very pragmatic.' B K Birla, who has seen Bengal in
its anti-industry days, says, 'Nandigram may not happen but industrialisation
in West Bengal will continue.'
On the whole, most investors take the view that such problems are inevitable
and, as with all such issues in India, will eventually sort themselves out.
Backed by a state economy that is growing at 7 per cent, a relatively literate
workforce and a growing market, Bhattacharjee has the strong backing of one
set of stakeholders for his reform programme. His challenge is to extend this
mandate to the other major stakeholders to achieve the inclusive growth to
which he aspires.
With reports from Ishita Ayan Dutt and Tamajit Pain
<b>Catch-22 in West Bengal</b>
Kanika Datta / New Delhi March 24, 2007
The policies that kept the Left Front in power for 30 years are proving major
obstacles in the state's bid to industrialise.
In 2005, the West Bengal government started acquiring farmland in Bhangar, 25
km from Kolkata, for a 100 km, four-lane expressway and township to be
constructed by Indonesian giant, the Salim group.
Soon after, Trinamool Congress leader and former railway minister Mamata
Banerjee lost no time summoning a rally, attended by more than 50,000 people,
to protest the appropriation of farmland for industry. Significantly, Abdur
Rezzak Mollah, the Left Front's land reforms minister, raised questions about
viable rehabilitation packages for farmers who would lose their land.
Subsequently, in state elections in 2006, the Bhangar assembly seat, which had
been a CPI (M) stronghold for decades, was narrowly won by a Trinamool
Congress candidate.
Though the protests were localised, Bhangar was a clear signal that the ruling
four-party Left Front would see turbulent times over land acquisition. Yet,
within the year, Chief Minister Buddhadeb Bhattacharjee announced plans to
acquire larger tracts of farmland as the state's industrialisation drive went
into high gear.
Soon, more vocal protests were heard in Singur, 40 km north of Kolkata, and
Nandigram, 150 km south of the city, respectively, locations for the 1,000-
acre hub around Tata Motors's small car project and the 14,000-acre Special
Economic Zone (SEZ) for the Salim group.
Last week, when villagers in Nandigram were killed in clashes with the police,
West Bengal became a national symbol of the evils of unfettered
industrialisation in general and SEZs in particular.
One of the world's longest-serving Communist governments now suffers the
ignominy of being labelled 'anti-people'. Indeed, as the CPI (M), the leading
constituent of the Left Front, has discovered to its chagrin, its faithful
rural support base is proving inconveniently intractable in the state's bid to
stoke industrial investment.
This has put the Left Front government in a bind. With returns from
agriculture diminishing, the state urgently needs to industrialise. To
bootstrap the process, however, the state needs more than 1,00,000 acres of
land. Half of this must come from agricultural land, which covers 68 per cent
of the state's land mass.
A land ceiling Act, which limits the acquisition of agricultural land to 12.5
acre, has meant that most of the acquisition must be done by the state rather
than the private sector (the Act has now been referred to a standing committee
for possible amendment).
Yet, as Nandigram has shown, the government cannot take the rural support
base, which sustained it for for three decades, for granted in this land
acquisition drive.
Ironically, the spectacularly successful land reforms that handed land to
small farmers and share-croppers (or bargadars) in the seventies (known as
Operation Barga) have become a source of weakness. West Bengal's land reform
programme was unique in that, unlike Punjab and Haryana, it created a green
revolution based on a small peasant economy. With high-yielding seeds and deep
tubewell irrigation provided by the state, Bengal was able to achieve high
yields ' two or three rice crops a year ' with average landholdings as small
as 5-7 acres.
Today, West Bengal produces around 8 per cent of India's cereals and is one of
the country's principal vegetable producers.
The flip side of this unique green revolution was that, as a generation of
landholders passed on, multiple inheritors have acquired even smaller plots of
land. Today many own just three or four bighas (three bighas = one acre).
Over the decades, growing land fragmentation, declining soil fertility and a
falling water table have made farming an unviable business for Bengal's 1.2
crore farming community. This fact is evident in a paradox highlighted by
economist Omkar Goswami. Writing in the Kolkata daily The Telegraph, he
pointed out that despite impressive growth in agricultural productivity and
farm incomes, rural household consumption in West Bengal was 9.6 per cent
below the national average in 2001-02.
'It doesn't speak well of a state that lays claim to agrarian dynamism [that]
its rural households consume only 4.3 per cent more than the average rural
family in Bihar,' he writes.
Not surprisingly, the second generation of small-holders has been uninterested
in farming, increasingly turning to the cities for jobs. Today, almost half
the rural population earns its income outside agriculture.
No one understands these inherent contradictions in West Bengal's economic
future better than Buddhadeb Bhattacharjee, who took charge in 2001, and a
small element within his government.
As state industries minister Nirupam Sen told Business Standard, 'The success
in agriculture cannot be sustained. We need to take the pressure off
agriculture and land is required for industrialisation.'
Yet, industrialisation in West Bengal had always been a controversial issue.
Powered by its rural support base in the seventies and eighties, the Left
Front government did little to support industry.
In turn, plagued by state-supported union problems and a chronic shortage of
infrastructure, industry began retreating in favour of more congenial
locations elsewhere in India. Big groups like the Birlas, Hindustan Lever,
Britannia, the Thapars and so on sought to locate their new investments in the
west and north.
Despite being isolated within his party and the Left Front, Bhattacharjee's
efforts have largely been to try and reverse decades of neglect. But
globalisation has changed the nature of the game. Integration and economies of
scale require vast tracts of land to be acquired for industrialisation.
Indeed, the state has attracted numerous projects that require thousands of
acres (see chart), that will displace large numbers of people on fragmented
land-holdings. In Nandigram alone, the Salim group's chemical hub would have
displaced more than 40,000 people.
Till the Nandigram crisis, the pro-changers in the government seem to have
assumed that the Left's stranglehold on the countryside precluded the need for
sensitive and well-crafted communication and rehabilitation programmes ahead
of the land-acquisition drive.
This apart, years of industrial neglect have also meant that, unlike Gujarat
and Maharashtra, there is no credible demonstration of the benefits of
industrialisation. Outside of Kolkata's polluted outskirts, there is little to
convince the rural populace to substitute the seemingly solid assurance of
land ownership for the ephemeral gains of factory jobs.
Certainly, on the outer edges of east Kolkata, where vast tracts of farmland
have been given over to mega-housing projects and factories, there appears to
have been no virulent protests to land acquisition.
At Singur, some 4,000 farmers representing 300 acres of land have refused to
accept compensation. But most other landholders here were absentee farmers
with jobs in Kolkata who were willing to sell their plots. Thus, despite
sporadic protests here, the Tatas have been able to power ahead with the
project, albeit under heavy police protection.
A wall enclosing the land is already up and workers from Shapoorji Pallonji,
the Tatas' major contractor, have started building roads and levelling the
land. The first Rs 1 lakh small car is expected to roll off the ramps by 2008.
Nandigram, however, was a potent demonstration of Bengal's Catch-22 situation.
It is an isolated and starkly backward group of 40-odd villages in which the
inhabitants own land, but little else. Most villages here have no electricity,
few pucca houses, and landholders subsist on three crops of rice and
vegetables.
Betel leaves represent the only commercial crops and brick kilns constitute
the only industrial activity. Annual incomes vary between Rs 18,000 and Rs
20,000. Literacy rates here are as low as 27 per cent, against the state
average of 64 per cent. Many of Nandigram's younger sons travel up the river
to the industrial hub of Metiabruz to work at low-paid jobs.
Certainly, the plan to set up a chemical hub here made both business and
economic sense. Nandigram is close to the port of Haldia through which a
pipeline would import the raw material. The hub would, as Sen said, 'change
the economic pattern of Nandigram'.
For the villagers, however, this transformation is far from evident, not least
because no one from the party has made a case for it. As they see it, they
will lose their land and livelihood. 'What will I do with the compensation
money'? asked Sudarshan Pain, who farms one acre of land and runs Ma Kali
retail outlet selling fertiliser and pesticide.
He and many others, mostly over 30 years, also doubt their employability in
the Salim group project. 'What jobs can they give us? They will need engineers
and computer specialists, we only know how to farm,' said Pain. 'Tell them we
don't want any change, we want to live just as we have been doing for years,'
an elderly woman added.
Ironically, last week's tragedy here took place after Bhattacharjee had
unequivocally announced that the SEZ would be scrapped following virulent
protests in January this year.
But by then poor communication stoked by simmering discontent boiled over into
pure political rivalry. With the local administration cut off from the area by
road blockades, the local CPI (M) strongmen, fearing a loss of control in
other parts of rural Bengal, decided to reassert their power.
The police were ordered in on so-called intelligence that Maoist guerillas
were operating in the area. In the ensuing confusion, they fired on villagers
including women and children who had been pushed to the front. The death toll
is yet to be officially verified. Police sources did not rule out the presence
of lumpen elements of the Left who committed atrocities as well.
After a stormy meeting of the Left Front a day later, Bhattacharjee merely
reiterated what he'd said in January that there would be no SEZ in
Nandigram. Meanwhile, the area has become a green fortress, subject to brutal
political rivalries between the Trinamool Congress and the CPI (M).
In the aftermath of Nandigram, the state government has finally understood
that the success of its industrialisation programme depends on winning the
battle for the hearts and minds of rural Bengal. As Sen has promised, 'The
state will go beyond compensating people. They will be rehabilitated.'
Meanwhile, investors, though worried, appear to be backing chief minister
Bhattacharjee. No one has pulled out yet, though they admit that Nandigram
might set back their plans for a time. The Salim group says it will continue
to look at other sites in the state.
Adds Venugopal Dhoot of Videocon, which has heavy commitments in the state, 'I
believe in Buddhadeb, he is very pragmatic.' B K Birla, who has seen Bengal in
its anti-industry days, says, 'Nandigram may not happen but industrialisation
in West Bengal will continue.'
On the whole, most investors take the view that such problems are inevitable
and, as with all such issues in India, will eventually sort themselves out.
Backed by a state economy that is growing at 7 per cent, a relatively literate
workforce and a growing market, Bhattacharjee has the strong backing of one
set of stakeholders for his reform programme. His challenge is to extend this
mandate to the other major stakeholders to achieve the inclusive growth to
which he aspires.
With reports from Ishita Ayan Dutt and Tamajit Pain