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TATA Motors in Singur

Q1 Should Government acquire private property for public purpose ?



Revival of Industries has been one of the major focuses of the West Bengal
Government since 1994, when the state's industrial policy was announced. Though
industrialization has increased job opportunities for the citizens of Bengal, one of the
key issues with industrialization is the acquisition of land for industries and
compensation for the land owners. After the land reforms, majority of the lands held
by the state was redistributed to small and marginal farmers. Today, 84% of land in
West Bengal is owned by small (2.5 acres to 5 acres) and marginal farmers (less
than 2.5 acres).This being the case industrialization cannot happen without the
acquisition of land from the private parties. Second issue is whether government
should directly involve in land acquisitions on behalf of the corporations. Land
acquisition at Singur for Tata Nano is a case in point. Nano project was a prestigious
one for every state in India. West Bengal managed to provide an attractive
proposition to Tata Motors and became the home for the Nano. For this project large
tracts of land (997 acres) was required and generally in such cases corporates are
out of their depths because of the fragmented nature of lands in Bengal. Thus the
local government has to lend a helping hand which is what the West Bengal
government did.
Having got the power of land acquisition, West Bengal government has to be lucid
on issues like compensation for land owners, use of fertile land for industrialization
etc. Firstly, government has to revise the rates according to the locality in which land
is situated, market price prevalent at that date etc. In this case $80000 per acre was
the market rate in Singur but the West Bengal Government offered only $17000-
$24000 which is an abysmal 30% of the prevalent rate. Secondly, Land Reforms bill
of the state should clearly dictate whether agricultural lands can be used to construct
industries or not.

Q2. Could Tata Motors have avoided the debacle in Singur?

Tata Motors, Indias largest passenger and commercial vehicle manufacturer, under
the leadership of Mr. Ratan Tata, envisioned to build a peoples car in the year
2003. This Tata Nano was priced at $2,500 and was almost half the price of its
nearest competitor in India.
The controversy at Singur in Hooghly district, West Bengal started when the state
government, under 19th-century land-acquisition law, offered Tatas 1000 acres of
farmland. But out of the 13,000 people who claimed a stake in the land, about 2,000
refused the government's compensation. However, the people staying in the
proposed land were forced to evacuate by the government. The compensation given
was considered inadequate and the new housing facilities offered were delayed. This
led to the protest of the peasants backed by opposition political parties.
Tata Motors could have avoided the debacle. The social unrest was not seriously
taken up by the Tata's and they relied on the Government of West Bengal to look
into the land acquisition proceedings. The government lacked talent and negotiation
skills with the opposition Trinamool congress along with civil and human right groups
and social activists.
The Tata Motors site was the most fertile one in the whole of the Singur, and the
Singur block, in turn, was among the most highly fertile in West Bengal.
Consequently, almost the entire local population depends on agriculture with
approximately 15000 making their livelihood directly from it. Tata Motors could have
avoided it as the locals felt threatened for their livelihood. Also environmental
degradation was feared.
The price of the industrial land in Singur shot up to almost $80,000 from $17000 and
$24000 per acre for single crop and double crop land respectively. This left the
farmers resentful as they became unhappy over the payments they received. Tata
Motors could have tried to create an environment of trust and future prosperity
instead of going for a pessimist approach and relocating to the other state.