New Delhi: As evicted farmers square off against giant Tata Motors over land seized to build the Nano, the world’s cheapest car, India’s industrialisation strategy has come under the spotlight.
Work at the nearly completed plant was suspended this week when Tata declared the site in Marxist-ruled West Bengal too risky for staff because of violent protests by farmers who say they were forcibly evicted.
Tata Motors is now seeking new sites to build its $2,260-dollar mini-car, billed as the world’s cheapest.
The decision is seen as a grave blow to India’s effort to attract investors.
“If the House of Tatas can face such resistance, the much-needed fresh wave of industrialisation in the country could suffer,” commented Sunil Mittal, chairman of India’s largest mobile phone company Bharti Airtel.
Industrialisation has been long championed by economists as a way to pull tens of millions out of poverty. But across India, land for factories have turned into battleground.
There has also been violence in Orissa state over South Korean steel giant POSCO’s plans for $12 billion steel plant, and clashes over plans for other Special Economic Zones, a part of the big push for industrial expansion.
The fight at Tata’s $350 million Singur plants is now being projected as a test case for India’s industrialisation.
Critics like Kanchan Chopra, head of India’s Institute of Economic Growth, say there needs to be a major change in the way land acquisition is carried out by government and industry.
Part of the solution could involve treating “people with ownership, shareholding or user rights to land” as “stakeholders” in development and giving them alternative jobs or annual returns from projects, she suggested.
Plan gone wrong
In places like China where the government wields absolute power, “displacement of people from their traditional occupations could take place easily,” noted Economic Times columnist TK Arun.
But “things are different in India” where the democratic right to dissent is celebrated, he said.
The challenge to balancing industrial growth with the needs of farmers is in giving displaced farmers new skills and sources of revenue, economists say.
The Marxist state government in West Begal, which in the past had opposed industrialisation, wooed the Tatas to set up the plant to create jobs in the desperately poor state.
Tata Motors, in turn, “came to West Bengal hoping we could add value, prosperity and create job opportunities in the communities in the state,” a Tata spokesman said.
Tata Motors has said it could have built the Nano plant in other parts of India with better infrastructure, but wanted to develop under-industrialised West Bengal “as our gift.”
“We’ve not come to exploit the people,” Tata Group chairman Ratan Tata told reporters in Kolkata two weeks ago, his voice shaking.
The Singur battle has been complicated by politics - the party spearheading the protests is the regional Trinamool Congress which hopes to break the Marxists’ 31-year rule over the state by winning over the rural vote.
Whatever the outcome of the Singur battle, industry groups say India desperately needs fast industrialisation to create more jobs for its population of more than 1.1 billion.