Friday, October 3, 2008

A tragic road map

The following article was published in The Statesman on 30 Spetember 2008. Based on the analysis of land reform expert Mr. Debabrata Bandyopadhyay it shows the estimated rate of profit from the Singur Plant. We believe it is worth reading, although the views reflected in the article do not have full agreement with the views of the blog.

Manos Ghosh



The improper resettlement and rehabilitation package for 2,500 agricultural households of Singur owning 164 hectares (400 acres) of rich multicrop land forcibly acquired by the Buddhadeb Bhattacharya government for the Nano car project would surely lead to their loss of livelihood, starvation, morbidity, social and economic degradation, not to forget a high incidence of untimely deaths. This is the substance of a fact-sheet prepared by Mr D Bandopadhyay, West Bengal’s former land reforms commissioner and secretary, revenue, government of India, on the gross value of production from 400 hectares of land acquired from over 12,000 owners and co-sharers for the Nano project.



Mr Bandopadhyay says that while the shareholders and the corporate house responsible for manufacturing the Nano will reap a windfall profit from this small car project because of a huge amount of visible and invisible subsidies provided by the state government for the project, Singur’s 2,500 households, whose 162 hectares have been coercively acquired for locating ancillaries, will surely face starvation, family disintegration and untimely deaths if the state government continues to ignore the resettlement and rehabilitation policy guidelines laid down by the Union government for land-losers. “This will mark the beginning of a tragic road map charted out by the CPI-M government for West Bengal’s industrialisation.”



According to the fact-sheet, land-losers of 400 hectares, numbering over 12,000, which includes co-sharers, produce crops worth Rs 10 crore annually will be lost. While the paddy crop of 5,220 metric tonnes from 400 hectares annually fetches an annual earning of Rs. 3.50 crore based on the government’s declared minimum support price, potato also fetches an almost identical sum from the sale of 10,000 metric tonnes from almost the same acreage. Income from inter-cropped vegetables is well over a crore of rupees. Oilseeds and pulses, both of which are cultivated over 200 acres, provide an annual income of Rs 42 lakh and Rs 34 lakh, respectively. While 235 tonnes of oilseeds are produced in the acquired land, the yield of pulses is 200 metric tonnes.



The most positive part of the study is that even a marginal Singur farmer, with a holding of just one acre (three bighas) has an earning that puts him well above the poverty line. Highlighting Singur’s economic prosperity from agriculture, Mr Bandopadhyay says this becomes clear when even the area’s marginal farmers and sharecroppers vociferously claim their income from their holdings is good enough to not only meet both ends but also help them enjoy some of the good things of life.



Mr Bandopadhyay says that according to the Centre’s yardstick, a family of five, with an annual income of Rs 22,000 and below, falls below the poverty line (BPL) category. But in Singur, even a marginal farmer and a sharecropper earns an average annual income of at least Rs 32,000, which places him above poverty line (APL) category without any assistance from any quarter.



In other states, according to Mr Bandopadhyay, marginal farmers with such meagre holdings and poor land quality and crop yield have plummeted below the poverty line. “But not in Singur. If proper incentive and price and other forms of support are provided this income is bound to increase significantly in no time”,Mr Bandopadhyay added. According to him an average annual agricultural income of Rs 10 crore, though distributed asymmetrically among 12,000 affected farmers and share croppers, shows the rich quality and high productivity of Singur land on which the Tatas have been allowed to build their car factory. “If the government and the Tatas don’t do anything to provide alternative sources of income, which must ensure higher returns than the existing ones, then a grave human tragedy is about to befall Singur’s 12,000 “unwilling” farmers. What has been announced as an increase in the compensation package by Buddhadeb Bhattacharjee is, unfortunately, less than half of the benefits that must be given to land losers under the national resettlement and rehabilitation policy of 2007. The new compensation package is a sham. “It will pauperise the land losers in no time and eventually force them into penury and extreme hardship”, Mr Bandopadhyay rued. Pointing out that the Singur project is a “job loss growth” Mr Bandopadhyay’s fact-sheet says that whereas the Tata car unit will create employment only for 650 employees (almost all of whom will be outsiders)whose annual wage element will be around Rs.12 lakh per employee, agriculture in Singur provides “unwilling” farmers with an income of at least Rs.32,000 for each of the affected 2500 households with 12000 heads. Even if the creation of 650 jobs at the Tata factory is factored into the Singur employment scene there would still be a net job loss of 11,350 heads which will spell doom for the local economy and social scene. While calculating Tata Motors’ income and expenditure on the Nano project which is based on very liberal assumptions, Mr Bandopadhyay’s projection is that Tata Motors would be earning annually a profit of Rs.600 crore from the project (See table).


The above calculation of surplus of Tata Motors has not been factored into the benefits that the company got through substantial material resources transferred to it either without cost or at a substantially reduced price. The real value of such transfer has not been made public as, according to both the chief minister and his industries minister Nirupam Sen “these are trade secrets which can not be divulged in the interest of the project which is for public purpose”. But according to valuers’ estimate the benefits so received through below the market price transfer of resources of land, water, electricity, transport, security, local tax concession and a loan of Rs 200 crore bearing one per cent interest would total around Rs 2000 crore.


Not only this, the annexure one and two of the agreement provides that the state government would make good the loss that the TM will suffer if and when there is an upward revision of excise duty and corporate income tax during the current decade. And alternatively if and when the excise duty and corporate tax goes down the benefit will go entirely to the TM with the state government having no share in it.


Thus the company’s net worth/ assets, according to Mr Bandopadhyay, would be far higher than the visible investment made by it as indicated above. The enhancement of net worth would be reflected in the soaring stock prices resulting in creation of instant millionaires and perhaps billionaires.


But this largesse provided to TM has created such an uneven playing field that it is being resented strongly and silently by other leading investors in West Bengal. They say that by doing this the CPI-M government has encouraged and practised a patently unfair trade practice just to favour the TM. It also, according to Mr Bandopadhyay, violates the letter and spirit of the Competition Act. “By having recourse to this the state government has committed a highly unethical and illegal act”. And yet the irony is that both the government and the Tatas are not willing to spend much on proper resettlement and rehabilitation of Singur’s “unwilling” land losers. Gross inadequacies and shortcomings in the state government’s compensation package, which the chief minister and his party as well as their camp followers have hailed as the “best” in the country, come out loud and clear when it is compared with similar package offered by other state governments to their land losers. Their compensation package contains so many provisions that each one of them addresses almost all the concerns connected with acquisition of private property resulting in involuntary displacement of their owners and depriving them of their land, livelihood, shelter and restricting their access to traditional resource base.


For instance, the compensation package offered to those whose 1300 acres had been acquired for building the new privately owned Kochi international airport and 800 acres for constructing the new cargo terminal at Nagpur airport have taken care of the traumatic psychological and socio-cultural fallout on land losers. The package has protected the rights to land, livelihood, and employment besides providing other benefits including financial compensation which is based on four times the price of prevalent market value of land. The Kochi package had such a human face that all the 800 land losers found it hard to resist the offer. Not only one person from each family had been provided with a permanent job, or various contracts but he had also been given shares of the airport company, bus or taxi permits, six cents of land for building a house and a free return air ticket to go to any of the neighbouring metro cities of Tamil Nadu, Andhra Pradesh or Karnataka. In fact the Kochi land losers in the Marxist ruled Kerala have been given more benefits than those prescribed under the National Resettlement and Rehabilitation Policy of the Union government.


Against this backdrop, the package offered to Singur farmers is a pittance. If the barren and gravel land in Tamil Nadu’s Sriperumbudur, where the Korean car major Hyundai has built two huge car manufacturing units on a 500 acre plot, can fetch over Rs 2.10 crore an acre, why should the state government pay between Rs 7 lakh and Rs 12 lakh an acre for Singur’s best alluvial land, which in terms of land quality is the country’s best? Although Singur in terms of connectivity and proximity to Kolkata is better placed than Sriperambudur. The result is that Singur’s “unwilling” farmers are convinced that the Marxist government is cheating them through land acquisition.. Their general feeling is that the package is “highly exploitative” in nature.


What has shocked many IAS administrators of Tamil Nadu and Kerala, which I had recently visited, is the “dehumanised approach” of their service brethren and their political masters in West Bengal. One such officer asked me in Chennai “Does the government’s responsibility towards involuntary land losers end with the collection of compensation cheque?” The officer was reacting after reading “threatening” statements of CPI-M leaders in the Press that the “unwilling” farmers should at once go and collect their compensation cheques from the collectorate.


(The writer is Editor, Dainik Statesman)


Source: TheStatesman 30 September 2008

1 comment:

Sunirban said...

you have no idea about an automobile industry.is this report comming from bajaj or maruti through mamata banerjee?why u people want to rape the future gegeration of bengal