The 20,000 residents around this picturesque scene of rice fields, blue hills and a river have been deeply divided for about two years now.

On this village and nine others around it, Tata Steel Ltd plans to build a five-million- tonne (mt), 5,000-acre steel plant; but before it can do that, some 4,000 acres must be acquired by the government from farmers.

The plant proposal has easily convinced some, such as Ram Vilas Shukla, who thinks his future is worth more than his four acres. “The plant is a good idea," he says. “It will give jobs to people."

Others simply don’t think so.

Sumaru Mandawi’s 50 acres in Sirishguda would be swallowed up by a 200-acre artificial lake that will supply water to the plant. “I’ll shed blood, but I won’t give up an inch of land," he vows.

A sense of suspicion and mistrust has washed over this area in southern Chhattisgarh—of government, of Tata Steel, of each other. For its part, Tata Steel is wooing villagers hard with promises of jobs, compensation and development. Some villagers say no amount of money can make them part with their land, and accuse the government of forgetting them. About 23% of the land in Bastar district is for agriculture, mostly paddy.

The naysayers: CPI’s Naren Bhardwaj (left) and Kamal Gajviye (centre) and Hem Kumar Bhardwaj are leading the protests.

About 82% of the people in Chhattisgarh work in agriculture, many of them seasonally, and with little opportunity for year-round employment. To generate jobs, reduce poverty and stem migration, the government is encouraging investors to set up industries.

This week, district officials began disbursing compensation to villagers for their land, on behalf of Tata Steel.

Since Thursday, some 250 of 1,721 total landholders have collected cheques in Jagdalpur, 30km away. About Rs3.5 crore went to villagers of Chindgaon, Kumheli, Beliapal and Dhudagaon, according to collector Deoram Mandawi. The largest single payment: Rs20 lakh.

With a phased investment of Rs15,000 crore, Tata Steel has much at stake—as does a state that has pinned much of its future on a steel boom that will bring needed jobs and infrastructure development.

The Tata group, long known for its corporate social responsibility programmes, has recently tussled with residents in areas where it plans expansion over land. The most visible and violent battle has been in Singur, the West Bengal site of the facility to make the Tatas’ Rs1,00,000 car.

Here, the project alone will employ up to thousands of people and generate other related jobs, says Varun Jha, vice-president of Tata Steel’s project in Chhattisgarh.

On Independence Day, it organized kho kho matches and distributed T-shirts with the Tata logo as part of its strategy to create an “enabling environment", according to spokesman Sanjay Choudhry. Class IX student Parashuram Dewan says teachers asked pupils to attend the match, but villagers blocked them. “We are fearful of both sides," he says. “But T-shirts can’t convince us to give up our land."

But even the young ones are divided. Class XII student Parshuram Bageri, in a neighbouring village school in Chapparbhanpuri, says his family will sell if he can work a job instead of land.

Villagers led by CPI have made 13 demands, including free education, hospitals and burial grounds. There have been demands that the project be a public-private enterprise, with 49% government equity.

Conflicts over land have emboldened CPI to assert itself more in local areas. The party has also said that the government should hold public hearings before any land is sold.

CPI party cardholder Ramnath Sarfe alleges the gram panchayats, or village meetings, were “bogus" because opposition was stifled. Five school teachers were transferred for raising objections, he claims. “Before the third meeting, at least 50 false cases were lodged against protesters," he adds. “A dozen people were sent to prisons to prevent them from attending."

The government denies any wrongdoing. “We are following all the acquire the land," says sub-divisional magistrate Neelkant Tekam.

Local leaders vow to keep fighting. Kamal Gajviye, a CPI leader imprisoned for a week and charged with causing disturbance, threatens dire consequences if Tata Steel goes any further. “It will be worse than Singur," he warns. “Everyone is against the farmer."

Saying the government has sided with industry, locals cite power cuts in Sirishjguda as tactical pressure to give up land. But N.K. Sinha, operation manager at the Chhattisgarh State Electricity Board, said the powerline to the village is illegal.

According to state officials, of the 1,707 land owners in the area, the government has heard 1,051 cases in the process of acquiring land.

Opposition to the project is more intense in pockets where villagers will lose both land and homes. In Kumheli, Chindgaon and Beliapal, areas more amenable to selling, fewer people are losing both. In Kumheli, about 135 people with an average landholding of five acres will lose their land, but only 10 will lose homes. In Chindgaon, 77 people with an average land holding of three acres each, will lose land, but everyone will retain their homes. In Beliapal, at least 185 people will lose a total area of 300 acres. But none will lose their homes as many live in another village.

The project represents progress and has a chance at ending the Naxalite violence that plagues much of the state, says Baliram Kashyap, Bharatiya Janata Party member of Parliament, representing the Bastar district here.

“Nobody is against any project," says A.B. Bardhan, general secretary of CPI, in an interview in New Delhi. “The trouble is whether the relief and rehabilitation of the displaced are taken into full consideration," he adds.