Time to define public purpose

Time to define public purpose

Tata Motors has written us a letter to disagree with some of our comments in our 15 September editorial “Confusing the Singur issue". We had written this editorial after the Calcutta high court passed a two-week interim stay on an order by the West Bengal information commissioner where he had asked the state government to make public the entire tripartite agreement between it, Tata Motors and the West Bengal Industrial Development Corporation on the Nano project.

We had pointed to a fundamental inconsistency in Tata Motors’ stance. Its lawyers argued in this case that the agreement between the three parties was a trade secret and could not be entirely put in the public sphere. In effect, they were arguing that the Nano project is a private commercial venture. In stark contrast, the state government acquired land at Singur using an antiquated law that allows the state to take over land for public purpose.

So what does the Nano project at Singur involve: private commercial interest or public purpose?

Tata Motors in its reply, published in today’s letters section, says: “The project will generate about 10,000 direct and indirect jobs. We do not know of many other ‘public purposes’ more important than generating employment in a country like India, and more particularly, in a state like West Bengal."

This argument has wide acceptance in Indian industry. That employment generation is public purpose reminds us of the view of many of our socialist politicians who have overstaffed the public sector. Technically, a public good is non-rival and non-excludable, which means that it is available to all, and use by one does not prevent simultaneous use by another. Think roads or national defence. Employment in a particular project, though welcome, is definitely not a public good.

Indian industry is treading dangerous territory here, since this specious argument can be turned against it in more difficult times. Say, a company wants to lay off workers. Is it undermining public purpose? It will then be easy for politicians to argue that they have the right to take over private property (a company) to protect public purpose (employment).

Is job creation reason enough to acquire private land? Write to us at views@livemint.com