Singur & Beyond

The Indian corporate history has umpteen cases where a handful has benefited at the cost of masses. It was the 'Temples of Modern India' - the capital intensive plants that displaced many small farmers and artisans as villages lost their existence. But in the Nehruvian era socialism turned out to be the buzzword that killed all oppositions. Some of the private sector plants also attracted the wrath of the locals. But given the age old licence raj regime, there was little respite as the government used to back such industrials initiatives. However post Sardar Sarovar agitation things changed to a greater extent.

And now it is the time for Singur. This place appeared on the global map when Tata's announced their intention to manufacture a small car- Nano. The land acquisitions took place and the resistance from the local farmers and landowners started to surface in both peaceful and violent agitations against both Tata and West Bengal government. Unfortunately the issue was soon hijacked by the local politicians and the welfare of people took back seat. The battle went beyond the routine corporate against public and became a means of acquisition of power in the state. Hundreds of people were killed and many lost their homes and wealth. Singur turned out to be a place of killings, riots and agitations.

Till last week the picture was painted in colours which made Tatas appear villains. Though the decent faced corporate was backed by the state government and especially by the Chief Minister – Buddhadeb – the public at large was on the streets. When, one says public at large, it means public at large. It includes women, old people and even college and school students, making it a public movement. After trying to settle the issues with locals for more than one year, Ratan Tata gave up and gave an ultimatum last month to the government of West Bengal. But it did not help and today Trinamul Congress activists – the leaders in the Tata opponents, have already started celebrations as Ratan Tata is about to declare exit from West Bengal. It is not if Tata will exit Bengal, but now it is a case of when Tata will quit. Pricewaterhouse Coopers have already announced that exit is the best and only option in front of Tata and have estimated cost of this exit at Rs 350 crore.

If the things would have been only the facts as enlisted above, there was nothing that could have made it a success of people's movement. But as one can see Tatas moving out, there is another set of problems that is cropping up. Yes, what to do with the land acquired is one such problem. But this is the problem for the law makers. There is no provision in the law, that handles the implications of giving back the land to the original owners who have already received compensation for their land. In the first place, there is no provision in the land that allows such giving back of land.

But that is not the bigger problem, as both the judiciary and the legislature can always find out an amicable solution. The real issue cropped up, when a farmer committed suicide hearing Tata's exit. There are many who decided to take advantage of Tata Motor's entry in Singur and have already surrendered their land. This is not a small faction of the society. This segment of society have been fighting with the project opposition for a long time and now when they lose, it is worth watching how they handle the frustration. Social observers in the state are fearing many more such acts on the backdrop of depression. This is going to be a real challenge.

The image of Tatas is the next thing that the corporate house will have to work on. After success of Tata Steel managed Jamshedpur, the corporate house has many things to talk about. Acquisition of Corus has put it on the global map. But with Singur back out, Ratan Tata has to stand straight and explain things to the world, especially when the world is equally curious and suspicious about the small car Nano. The business prospect of the group will face some adverse surprises by their stakeholders, primarily from their suppliers who as of now are talking unconditional support to Tata group. But this picture may change dramatically as the small suppliers cant see the business, even after offering the best rates in an inflationary era.

The worse issue that made us write this piece here is the involvement of political outfits. Mamata led Trinamul Congress played a decisive role in this action. The party workers flooded the roads to Singur in the last fortnight. Though the paradox was seen as they used Tata vehicles to reach the ground zero. Mamata not only denied acceptance of any responsibility for the violence in the locality but also talked multiple things over the last six months. Unfortunately, there is no alternative plan she could offer to locals that would ensure the growth and development of the locality. Opposition for the sake of opposition yields nothing but power that corrupts the beholder of it. Here we do not intend talking about Amar Singh who went to Singur to share the stage with Mamata, as we cant forget the way he invited Tata to Uttar Pradesh two years back with a red carpet treatment.

Mamata initially opposed the corporate entry and later on changed the stance to capping the Nano plant to just 600 acres instead of 1000 acres of land. When told that the remaining 400 acres were required by the supplier entities, she could point to the land belt exactly facing the Nano plant on the other side of Durgapur Expressway. This has brought to surface some facts that the West Bengal government is not keen to talk about. An NDTV report brings out the fact that the hug land tract is owned by many industrialists and real estate players who bought the land at dirt cheap prices sensing the entry of Tata in the state. Some local groups are also underlining this fact and demanding action to that effect. There is a clear demand that says that instead of taking the land from the small farmers, the state government should take the land from the big land boys.

But again this is a classic case of protection of personal interests. It is alleged that many of the industrialists and real estate players owning the large tracts of land are the financiers of the CPI- the rulers of West Bengal. This makes us upset. The masses are made to sacrifice for the gains of classes. This is again a case of cruel face of capitalism. If there is a need of economic growth and economic development of the stare, all the factions of the society should pay for it equally. After all there cant be more equals among equals.

(Though the above post has little to do with the stock markets other than the stock price of Tata Motors, in our opinion Singur will have a long lasting impact on the economic future of India and the future of Corporate India as well. Future policy makers and investors will keep the incident at the back of their mind irrespective of future of Tata Motor's Singur plant.)

Disclosures: We do not have any position on Tata Motors stock. We do not have any monetary interest of any kind in Singur and West Bengal.