Singur: What Happened, What Next and Time to Pay the Cost

Since Tata Motors has shifted the Nano project from Singur, the company will have to meet the cost of land acquisition, development and the police protection that was provided for two years. The state government should issue a global expression of interest to set up an automobile plant in the area – the land cannot be used for any other purpose.

D Bandyopadhyay (csdnd@del2.vsnl.net.in) is with the Council for Social Development, New Delhi.

Economic & Political Weekly

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One cannot blame Ratan Tata for his lack of knowledge of the character, trait and heritage of the popular upsurge in West Bengal. Singur was one of the epicentres of the Tebhaga movement in the late 1940s that was led by the old Communist Party of India. There is a famous story by Manik Bandyopadhyay called Chhoto Bakul Purer Yatri on that episode. Its locale was Bara-Kamalapur in Singur. A blue-blooded bourgeois totally alienated from the common people cannot have any awareness about a popular movement against gross violation of their basic right to life and livelihood.

Wealth creates hauteur. Hence we may excuse Ratan Tata for his slightly less than civilised behaviour in slandering Mamata Banerjee in the press conference. He did not show any concern for or kindness to those who lost land at Singur, but it is reported that he donated $50 million to Cornell University only recently.

But what about the Communist Party of India (Marxist)? Did it not take a royal charter of monopoly for representing the “oppressed” who stood in constant opposition to the “oppressor” and who are in a constant fight, “a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes”?

The Government of West Bengal (GOWB) published 13 notifications under Section 4 of the Land Acquisition (LA) Act 1894 in July 2006 declaring its intention to acquire roughly 1,000 acres of land in five mauzas of Singur abutting the Durgapur Express Highway. All the 13 notifications had one identical clause. It stated “that land mentioned in the Schedule below is

Since the government cannot acquire any land for a private company except through the procedure laid down in chapter VII of the LA Act, the GOWB openly committed a fraud on the law and on the public by acquiring the land in the name of the West Bengal Industries Development Corporation (WBIDC) – a government company – for leasing it to Tata Motors Ltd (TML). This chicanery on the part of the GOWB enabled the Tatas to get hold of 643 acres of land on lease without paying a paisa. But under this procedure, land could be acquired only for a “public purpose”. Section 3(f) of the LA Act defines “public purpose”. There are eight items under it. But the caveat to this definition is very significant. It says “but does not include acquisition of land for companies”. Thus the acquisition of land for TML was totally illegal. The issue is now pending before the Supreme Court.

Public Purpose

For the exercise of the doctrine of eminent domain, a “public purpose” is essential. Hence the GOWB tried to make out a case by stating that the small car factory would generate employment and result in socioeconomic development in the area. There is no basis for this assertion. First, it did not disclose how many direct jobs would be created in the factory. Second, it did not specify how many of those who were to lose land would get direct employment. Third, the promise of economic development and the resultant prosperity was a rehash of the discredited and discarded “trickle down theory”. Hence it was an exercise in falsehood. Though not conceding the point, let us accept these contentions for the sake of argument.

The whole proposal was predicated by the fact that the TML would set up a small car factory. Now that they have decided to move out and are relocating the factory outside West Bengal, the whole thesis vanishes into thin air. There is no small car factory. There would be no employment

COMMENTARY

generation. There would be no socio-economic development of the area. Therefore, there would be no “public purpose”. Thus the expenditure of public funds for this non-existing project was a total waste and, therefore, fully unjustified.

Serious Consequences

It has very grave and serious consequences. The whole exercise of acquisition of 1,000 acres of land through the use of force, building up of infrastructure for a project which does not exist, supply of free electricity and water, round the clock police protection for two years, and construction of 18.75 km of a boundary wall with watch towers at regular intervals, were all done for nothing. Who is to bear this cost? Even with a contrived and convoluted argument of “public purpose”, there could have been a fig leaf of justification of such enormous public expenditure. With the withdrawal of the Tatas all these expenses lose validity. Some heads should roll.

The Tatas withdrew from Singur on their own volition. Therefore, they will have to pay for the cost incurred. That is the logic. That is also ethics. In fact, the Comptroller and Auditor-General (CAG) of India should conduct a due diligence audit of the WBIDC, Commerce and Industries Department, the West Bengal Housing Infrastructure Development Corporation (HIDCO) the Bhangore-Rajarhat Area Development Authority (BRADA) and the Police Directorate to compute exactly the loss to the public exchequer due to this abrupt decision of Tatas to move out from Singur. The CAG should also fix responsibility for this wanton waste of public funds. It would be a slightly time consuming process but it has to be done for the sake of public accountability, transparency and good governance.

Cost Tatas Have to Meet

Meanwhile to present a provisional bill to Tatas an attempt is being made here to compute a figure based on the facts and figures as published in the print media about the issue. The Tatas caused enormous loss of public funds for their misadventure in Singur. This provisional figure will be altered once the CAG’s report is made available. But it is fair that the Tatas should have an indication of how much they would have to pay West Bengal.

In the first place, but for the fraud perpetuated by the GOWB, the Tatas would have to pay upfront the estimated cost of land acquisition under Chapter VII of the LA Act 1894. Now that there is no public purpose, they would have to reimburse to the state government a sum of Rs 200 crore which is the paid out cost of compensation for the acquisition with some visible overheads.

Second, the WBIDC or some other state agency constructed the 18.75 km long boundary wall along the outer periphery of the acquired property. We do not know its specifications. It is locally said that the wall is eight feet high with a two feet foundation underground. Estimates made by a couple of A-class CPWD contractors indicated that it would cost Rs 275 per running metre for a wall of this type with supporting pillars at regular intervals. Thus the estimated cost of construction of this wall would not be less than Rs 51.56 lakh. To this, one has to add the cost of five big gates. At a conservative estimate that would cost not less than Rs 25 lakh. Thus the wall with gates will cost not less than 76.56 lakh.

Third, the government provided roundthe-clock police protection, both during the process of acquisition and after the land was leased out to the Tatas. Newspaper reports indicate that approximately 2,000 policemen had been deployed day and night for the last two years and several months for the protection of the property of TML. The government did not come out with any facts about this cost. But the police directorate of West Bengal has a standard formula of the cost of deployment of 1,000 policemen (one battalion strength) excluding the salaries of officers of the rank of an inspector and above. The salary cost per month comes to Rs 80,70,000. To this one has to add cost of the uniforms, and some basic equipment which would come to Rs 16,51,100. Thus the total comes to Rs 97,21,800 per month. This figure does not include the expenses of vehicles, petrol/diesel, and other heavy equipment without which a police force cannot function. Excluding these items, the annual cost of deployment of a battalion of policemen comes to Rs 11.67 crore. For two battalions deployed to protect the Tata property the cost would be Rs 23.33 crore. For two years it would be Rs 46.66 crore. This is basically the salary component. The actual cost is much higher.

Fourth, the GOWB committed another act of deception to give financial benefit to the Tatas. The principal secretary, Commerce and Industry (C&I), Department of GOWB, wrote a letter on 12 October 2006 to the managing director of the HIDCO in which, inter alia, he said:

In order to bring investment (obviously the Nano unit) in West Bengal, we had to face competition from other States, in particular, Uttaranchal which enjoys Zero excise duty benefit in a car proposed to be priced at Rs 1 lakh, the exemption of 16% excise duty makes a major difference. Therefore, in order to make the investment attractive to TML, the State Government has to offer significant support in the form of upfront infrastructured assistance.

So the Tata Housing Development Corporation (THDC) would enter into an agreement with WBIDC to form a joint venture company. Five hundred acres of land belonging to the BRADA would be given at a concessional rate to the THDC+WBIDC combine. And 50 acres of high value land of the New Town Rajarhat should also be given to that combine. The letter clearly mentioned 20 acres should be given for commercial purpose and 30 acres for residential purpose at rates which were half of the prevailing rates. The letter went on to state that profits generated by WBIDC would be used by it “to meet its commitment of infrastructure assistance to TML project without having resort to budgetary support”. The term “infrastructural support” was deliberately used to hide the real intention of giving a subsidy to TML. This directive of the C&I Department violated several laws apart from being ethically unsupportable. But we are not going into that it here.

At one stroke, HIDCO suffered a loss of Rs 60 crore for 20 acres of commercial land and a loss of Rs 75 crore for the residential land, making a total loss of Rs 135 crore.

On the 500 acres of BRADA land, one could make some conjecture in the absence of hard facts. Assuming that the price of land per cottah was Rs 1 lakh and that BRADA had to sell it at Rs 50,000 to ensure profitability of TML, BRADA lost Rs 150 crore straightway (one standard acre = 60 cottah).