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A solution to Singur impasse?

The hasty government decision to turn the agriculturally prosperous area of Singur inHooghly district into an industrial zone in 2006 was based on two justifications - one isthe unhealthy but unavoidable 'race to the bottom' pursued by states to woo big businessafter liberalization, and the second is the golden chance to attract big business to Bengal, which witnessed a systematic escape of industrial capital to other states for threedecades.

While both made sense, there's no defence for the method pursued to achieve the goal.The minimum necessity for success in this route is to conduct a detailed socioeconomicsurvey among the residents of the potential project-affected area by experienced socialscientists (a condition which the Centre has been mulling to incorporate in the new billon land acquisition) but that was not done. On the other hand, the then government inBengal suffered from indecision for almost 20 years regarding its stand toward privatecapital, initially domestic later foreign. One cannot expect to win a 100-metre hurdlerace after inaction for such a long period - it needed a gradual change, through creationof infrastructure and land bank and a time-consistent balance among small, medium andlarge industries. Whichever way we see it, the Singur imbroglio had its root in this.

A recent survey in the potential project-affected area in Singur by Maitreesh Ghatak of LSE and his associates reveals that the government erred on several counts. In thesurveyed area, the government assumed that 96% land to be acquired (around 997 acres) was sali (one-crop land) whereas in their survey only 63% turned out to be so. In reality,

it may be still higher since improvement in productivity through irrigation has been widespread in the area in the last two decades.

Thus the survey found that the average compensation was around Rs 8.75 lakh, whichclearly was much less that what the land owners should have got. Also, the survey revealed poor management of the compensation money. Since, almost 89% peoplesimply put it in fixed deposits in bank, which today gives a real return of 2-3% given thehigh rate of inflation. So the residents lost a productive asset but could not acquire acompensating asset for lack of good planning.

And then, the 2011 population census revealed that of the 4,971 households in theaffected moujas, around 1,000 directly owned or rented land. The government claim that9,839 people accepted cheques till December 31, 2006, points to fragmented ownership,absenteeism of landowners as well as complete disregard of the welfare of the majority of the residents who were agricultural and non-agricultural labourers. So the project had anobvious disconnect with the ground reality.

Do we have a way out of the Singur stalemate? After all, the agricultural land there has been transformed into a non-productive asset by the turn of events. Assuming anaverage productivity of paddy of 1,346 kg per acre (as revealed in the survey mentionedabove) and double cropping in 50% of acquired land, the loss due to paddy alone would be around Rs 50 crore in market price over the last six years. If we add potato and

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vegetables, the loss would be still higher. Along with this, one needs to add the monetary equivalence of insecurity and unhappiness of the residents in the area, which is certainly a huge amount as well. This is a loss for Bengal as a whole and we need a solution at theearliest.

There can be a two-pronged approach to solve the impasse -the first gives priority to thesocio-economic aspect and the other to the legal process.

The first requires a negotiated settlement among the government, the Tatas and itsassociates as well as the local residents. When the Tata group moved to Sanand inGujarat - an area having almost 1/4th land productivity as Singur by some estimates -they negotiated with GIDC and paid a purchase price of Rs 36.42 lakh per acre (reportedin newspapers).

In contrast, a calculation by retired IIMC professor Nirmal Chandra in the 'Economicand Political Weekly' showed that the Tatas effectively pays Rs 5.42 lakh per acre for 99- year lease in Singur.

One can negotiate with the Tata group for a commensurate compensation to Singurresidents for outright purchase of land the government has acquired for them. However,they need to abide by the new clauses introduced in West Bengal Land Reforms Act,1955, and set up suitable industrial units within three years of purchase. In the absenceof rehabilitation clause in the existing Act, the government, Tatas and the residents needto evolve a consensus rehabilitation scheme so that land-losers can acquire acompensating asset in the form of physical or human capital or land. In addition, tax benefits need to be carefully capped given the revenue need of the present government.

This case should be taken as an isolated instance since a multi-crop agricultural land wastransformed into a non-productive asset due to past government mis-calculations. In asense, the thought of persuading the Tatas and their associates to give up the lease is analternative, but one that is less attractive.

This is because Tatas and their associates may demand an unreasonable compensationand it may prove quite costly to return the land to the erstwhile owners (if legally possible since one may have to auction it as per current law) since those who have takencheques may only give back fraction of their compensation money and some others may

not be traceable. Alternatively, land may be returned to those who have not takencheques, but in either case it will take substantial additional expenditure and time tomake the land productive again if possible at all.

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