Technology, industry and politics often play hide and seek to the amusement of none—Tata’s struggles in Singur, India is a case in point.
By Zafar Anjum
29 Sep 2008
There seems to be no end to the worries for Indian industrialist Mr Ratan Tata—the tycoon who oversees and leads the global operations of the Tata empire—from Tata Motors to Tata Consultancy Services to Tata Steel, just to name a few. Incidentally, Mr Tata is also an honorary citizen of Singapore, but that is beside the point.
The source of trouble for Mr Tata is not in a far and away land (though it could well be, in the coming days) but in his own country—India. The potential trouble, emanating from the current financial crisis on Wall Street, cannot be ignored. It was reported that TCS, India’s largest outsourcer, earned 43 per cent of its revenue in the second quarter from the banking, insurance and financial services sector. Now that major companies (read clients) in these sectors in the US are going belly up, or being bought out, TCS’s bottom line might take a hit in the coming quarters, although this is just conjecture. That is also beside the point. Sorry for the digression.
The most current source for trouble for Mr Tata, as I was discussing, arises from its purported operations base for manufacturing the world’s cheapest car—the Tata Nano. If you have been following the news, Tata’s new plant in Singur, West Bengal—has been a scene of much political mayhem, even bloodshed, ever since farm land for its establishment was acquired by the communist government of the state of West Bengal, under a special economic zone (SEZ) scheme.
I think a brief backgrounder is warranted here. On May 18, 2006, Tata group chairman, Ratan Tata, announced the project for a small car at Singur, 40 km from Kolkata, on the same day when Buddhadeb Bhattacharya was sworn in the state’s chief minister. Farmers began to immediately protest over the “forced” acquisition of their land for the Tata car project. On Jan 10, 2008, Tata unveiled the name for small car, the Nano, to the world. Tata said the car would be sold at the unbelievable price of US$2,500, excluding taxes. The world was impressed at this little marvel of technology with such a puny price tag.
But people at Singur were not—even though some family members of the displaced farmers were given jobs at the Tata factory. What followed is now a well-documented saga of protests and strikes, of public action and government reaction, of negotiations and accusations. Go here if you want to follow the twists and turns of the Nano saga.
The latest developments in the last few months were mainly centred on this issue: Out of 997.11 acres acquired for the project and ancillary units, Trinamool Congress leader Mamta Banerjee demanded that 400 acres of land be returned to the farmers. The talks failed and on Sep 3, Tata said that they were suspending work at Singur and were looking for alternatives. Chief ministers of many other Indian states began to woo the Tatas to move the Nano plan to their states. Who would let this windfall pass?
But the result has been crippling for the Tata Motors. Tata had announced that the Nano would be rolled out by October—an auspicious and hot time around the Hindu festival of Deepawali, when Indians usually splurge. All these protests at the Singur plant had thrown a spanner in its works. But Tata remains committed to the October launch plans.
Last heard, it was reported that Tatas were moving the Nano plant to Uttranchal in north India. There were also some media reports that claimed that the Tatas had smuggled the machinery out of Singur to its new plant.
While Tatas grapple with the challenge of manufacturing the first batch of Nanos for the market on time, politicians are busy scoring points from their constituencies. The latest to join the fray is India’s Information and Broadcasting Minister, Priya Ranjan Dasmunsi, who spoke out on the Singur land row on Sunday (Oct 28).
“We will not accept the fact that Tata Motors want to leave Singur after destroying thousands of acres of land in Singur and the Hooghly River,” he said. He also criticized the Tata’s obsession with the scheduled dates of the car’s roll out. Why can’t the dates be extended, he argued.
The politics of SEZ
Industries need vast amounts of land to build their plants and operations bases. But sometimes, what happens is that the interests of the farmers and those of the industrial houses, mediated by politicians and agents, come to a head. This is what happened in Singur, leading to a deadlock for the Tatas.
The Singur saga has become so much talked about in India that the discussion of SEZs has entered Bollywood. Veteran filmmaker Shyam Benegal’s latest release Welcome to Sajjanpur has a street play in the main narrative that very much sounds like what happened at Singur or another SEZ, Kalinga Nagar (more on this later).
But this is not a small matter and in the coming months and years might become a moot political issue for a fast developing country like India, where a huge amount of its population still lives in villages and subsists on farming. These farmers, unable to enjoy the fruits of a trickle down effect from a globalizing India, are not able to grasp the paramount importance of industrial projects from the likes of the ambitious Tata. They think that their lands are being grabbed and their way of life is being threatened forever.
To be fair, all blame cannot be put on farmers and protestors. Assistant professor of Information Systems at the US’ Raider University, Biju Mathew, agrees that the SEZs are a huge landgrab. He has studied the SEZs in India and he thinks that for the Indian industrialists — the Reliances, the Tatas, the Jindals — rural India matters only as a point of resource extraction. “They couldn’t care less about that place,” he says. “India is being recrafted as 20-25 “hubs” as SEZs, all within a 40-50 km from the big metros or on the coast near the ports. To see them as Bihar, Jharkand, Orissa, Chhattisgarh is wrong: it’s one mine, one stretch.”
He points put the danger of carving out these SEZs: “In India, you have gunda or rogue capitalism, which allows the Kalinga Nagar atrocities [where police fired and killed tribals protesting an SEZ]. It would have been very difficult to do a Kalinga Nagar in America. I don’t think it will go on uninterrupted because the protests are mounting. But if it goes on uninterrupted you’ll have a dual India: a formal parliamentary democracy as a certain kind of sham, a nation state in which the nation has vanished and only the state remains. And you will have corporate totalitarianism in these hubs.”
As Somini Sengupta points out in her reportage in the New York Times, the Singur standoff is just the most prominent example of a dark cloud looming over India’s economic transition. To maintain its fast clip of development, Indians—industrialists, politicians, and the civil society—will have to tread carefully and fair-mindedly, to avoid political flashpoints and civil unrest.
Zafar Anjum is the online editor of the MIS Asia portal.
