Voice of Bengal

2007-03-19T22:54:00.000-07:00

Why Nandigram, SEZs in West Bengal, India

Why are the Indian states encouraged to forcefully take over farmers’ lands at the cost of state exchequer and tax-payers’ money, to be distributed free of cost to any who barely promises to bring few million dollars, that too many times to firms of dubious local and global reputations, irrespective of how much money is actually brought to the table? That too, when global liquidity seems to be on the higher side (well, now may come the tightening cycle, which always is uncertain…but usually follows).

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Somehow in Indian billionaires’ portfolio, there isn’t still 25% of India’s land. How unfair! They own 25% of India’s GDP in wealth, shouldn’t they deserve to own 25% of India’s land. Oh…yeah goes the duo from Oxford-Cambridge-Harvard. Justice must be prevailed for the marginalized sections as they have advocated reservations for under-represented lot, in similar argument earlier. So why not reserve up to 25% of Indian land, that’s ‘their’ share in GDP… slowly… just like share of backward castes in jobs or merit-based positions is decided by their caste population share for ineffective reservation by sacrificing the legitimate demand for the real poor and needy.

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So as if existing growth rate of 8-10% is not adequate and sustainable, as if industries like the world’s largest grass-root refinery didn’t take place without such policies, government emulates Chinese model of Special Economic Zone, not six giant ones like China has with trillions of dollars of capital investments; with hundreds here in India, few with hardly $25,000/acre (how come this figure…please follow the article) of proposed chemical-hub SEZ investments that demands 40 million acres for trillion-dollar investment to ensure even faster growth rates, that too nearly three decades after China started, as if our policy came from God as a panacea for growth, faster growth, ‘inclusive’ growth.

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And one source[1], I didn’t search enough, reported ‘From 1979 to the end of 1996, a total of $175 trillion had actually been invested in China by foreign entities’. So at that rate, we need 7000 million acres of land to accommodate that capital investment. Valuation of that dollar was 1999 basis as it was a 1999 research conference paper, one may take equivalent dollar value today, and thereby may further inflate above 7000 million acres (7 billion) by 1.5 times.
Let me state honestly that above figure did blow my mind off too – it’s almost four times of present nominal global GDP. So one gets more surprised when one reads the next line ‘This figure is less than half of the total pledged amount of US $ 469 trillion’.

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So to accommodate above figure (US $ 469 trillion, to attract capital investment, isn’t it?) at $25,000/acre, one needs around 15 billion acres, if not more due to other stated reasons. Available land in India, as per CIA Factbook[2] is 2,973,190 sq km, which comes to less than 1 billion acre.

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It’s simple arithmetic if we get the units right - 1 sq. km = 100 hectares, and one hactare, equivalent to some 2-3 acres (1 sq. km = 247 acres, to be precise). I took the higher one (300 acres = 1 sq. km) for my ballpark calculations.

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So to accommodate that kind of investment, Indian parliament, along with WB assembly needs to be converted to SEZ. And Indian democracy was razed anyway on 14th March, 2007 in Nandigram.

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And if this isn’t land grabbing in the name of SEZs, I don’t know what land grabbing can potentially be. Please note SEZs aren’t good or bad, democracy isn’t good or bad, industrialization isn’t good or bad, growth isn’t good or bad - it’s the way we implement those SEZs, we apply that democracy, we have that industrialization, we achieve that growth that makes them good, or bad.

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All these are not causes - they rather are the effects (can be looked otherwise as well). And the causes (how and why) that lead to the effects are equally important.

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I made my stand clear earlier[3] on why I believe concessions’ to industries should be stopped, because this race to the bottom amongst Indian states isn’t sustainable. Because after Singur incident, reports came that Jindals now wanted land-prices to be re-visited for their proposed steel project in WB. And why not? If Tatas can get it cheap land, why not them? And when the proposed investment is Rs. 35,000 crores ($ 8 billion compared to less than half-a-billion dollar for Singur)?

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Does one see here how the race to the bottom continues for the state?

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Though I argued there for no concessions for any, even in Singur, a Tata project; I also firmly feel if anyone at all deserves such concession, it should be like the house of Tatas, and similar reputed business houses (reputation not by size alone, so deserving smaller houses should also get that following this logic). Because this group, other than having strong ethical practices, also did a lot of good for India, in setting benchmarks for Corporate Social Responsibility where the group spends a significant part (and not in single digits of profit here, more than half?[4]) on various CSR policies.

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Having said that, I also fail to understand why Tatas have had to get the land at such a concessional rate? Rs. 150 odd crores isn’t big money for them (hardly $30-35 million, 10% of Tata Sons spending on social causes), when they anyway spend much more than that on genuine social causes? I can understand their logic that when most other business houses do get such concession, why not the Tatas? I also understand that Tata Motors is answerable to its shareholders for bottom line and not on CSR alone, and accounting standards for Tata Sons and Tata Motors may not allow such transfer of funds. But isn’t the last point a job for mere accountants to decide, whereas visionaries like Mr. Ratan Tata can look at the macro-thing, and thereby not miss another chance to set-up another example?

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I will tell you why they should do that. Because if Tatas, even now, by canceling the attractive almost ‘free’ land deal (as it came in few vernacular media, another ‘open secret’) promises to pay WBIDC the real money that WBIDC paid to farmers; they set an example – a benchmark. Well, frustrated Tatas may again argue that Tatas have set so many examples; and what did Tatas get in return? I understand and agree: all their stakeholders in any business benefited, many times the shareholder has not even benefited as much as other peer groups offered, and that’s a track record they carried for a century or more. And when I look at new billionaires like Essar brothers, I rarely know anyone who benefited from their businesses, other than the Ruia family. Shareholders for steel, shipping, oil were mostly taken for a ride, institutional lenders were asked to re-write and write-off many loans and interests; and by that in less than two decades, they have garnered much more wealth than any individual Tata Sons family (probably). If there is one example for Tatas, there are hundreds of examples of Ruias, Agarwals (of Sterlite, who converted school of Balco, Korba, an acquiered PSU to godowns, as reported in the Times of India sometime back, true Sterlite group generated a lots of shareholder wealth, but how?), Dhoots of Videocon…I can go on.

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I hope one would excuse me to cite evidence for everything…certain things people who need to know know.

And thereby we, Indians are here…we are still worse than Sub-Saharan Africa in many measures (true, in many we are better and why compare with SSA always?)…in the bottom of global ladder in most parameters which are good, and in highest order like issues of corruption, difficulties in starting and managing a business, which are bad.

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And one is confused on why government, as a facilitator, does not get rid of corruption, improve good ethical businesses processes which probably would bring more investment than offering monetary or financial sops.

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I am sure in India majority, like the ones who were ‘murdered’ in Nandigram for not knowing WHY, like the one who call bandhs and thereby engage into destructive activities may not understand; but few, who have seen the world, read a lot, worked with the best of the firms, played in financial markets, had the best of education, access internet to enrich their knowledge and stay ‘connected’ with the world do understand. However we, this 2nd category, are too occupied with our individual activities, and we also have the previlige to have selective amnesia which does not affect us directly.

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And that’s why I say it’s YOU & I - yes we all are responsible for all these mess. We, who have been reading this online without engaging ourselves in bare minimum things that we can do from our daily official roles for a better society. We CAN do that - but we prefer keeping quite, even when we know better than those who ‘pretend’ to know (or in bits and pieces, collectively) in the name of law or in the name of democratic opposition, that they aren’t right, always.

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And I request us all to come forward to have our say – loud and clear on what’s right and what’s wrong. You may not agree with me, may pounce me. True, what I have been doing today from academics, I could not have done that from corporate world, where the cream of India still is, other than a small part being in academics. And true, governance is the job of government. But when they fail, should we look at how individually or organizationally we make even more money/profit from those failures…no, not any more. Most of us have made enough money by now by any Indian standard, if I am not mistaken.

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And money never is enough.

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Not by joining an agitation…we need to do what we are best at (I had academic publication from reports of Kalinganagar and other violences on land acquisition in 2006 where I suggested a better model, forgot…issue was revisited with SEZs, Singur when I wrote to PMO for policy-research on this. Nearly two months now - and expectedly no response. Agreed, very limited effort but I plan to do more with you now). By policy influence, by setting benchmarks that go beyond creations of shareholder wealth and individual wealth, industrial bodies by not inviting tainted industries, media-channels by not taking live TV interviews of same corrupt businessmen and politicians (who blatantly lie too!)…by not false advertisements to pay back a personal friendship at the cost of social responsibility as respected, talented, role model Mr. Bachchan is lately doing, and trying to justify something which fundamentally is not justifiable (personal friendship and social obligation belong to two different spheres and one can’t be compromised for other, it’s not ‘double-role’ original Don movie where he can be any, in advertisements, he is ‘Big B’, India’s pride and best global actor for last century as per a BBC pole).

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Because money may come and money would go, but the standard of society, if deteriorates like as it’s been doing in India lately where in the name of money-making, everything is ‘chalta hai’ (everything is fine in war and love, that was the global version; and in India now, everything is fine in ‘making’ a quick buck); your kids…our kids…their kids inherit an unhealthy society.
And life and businesses should not be a mad race to top the list of billionaires, it’s good but not necessary (well, I don’t belong to the rich, super-rich, billionaire…so easy for me to say any nonsense here). I never even hint at billionaires being bad for society; most of them are great enterprising people, and are role models.

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But I can say, with above examples, that many stink as well! Like many corrupt bureaucrats, politicians, ministers…

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Let’s boycott those who stink, socially…in our circles, in our jobs, in our limited capacities.

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Now is the time…because when ‘aam admi’ and ‘aam admi government’ look at $ 500 million[5] investment for 22,000 acres of integrated one-piece land[6], true the actual figure varies to 27,000 acres, they may find nothing wrong in it . But you who know a lot, and people like me who knows a little? And as a researcher, I don’t take anything just by face value when I know government lies too, and government can make a mountain from a molehill - so simple arithmetic of all these SEZ and ‘Nandigram issue’ (or somewhere else now) boils down to a proposed capital investment of hardly Rs. ten lakhs/acre of investment, for a proposed chemical hub, and more than twenty farmers already killed since January (actual number…no one knows as nearly hundred remains missing. Lately local media reported of rapes and killing of young kids as well, at the hands of party cadres aided by state police).

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This is not land prices, but proposed capital investment/acre. However in any business that uses so much land, to make money one is expected to invest in core business than in land, unless it’s agriculture. So they are likely to pay much less for the land prices if investment figure is right. And just ask any on the streets in Indian metro on what’s the price of land and how is it shooting. Well this was Nandigram and the others are metros. But can the difference anywhere be that high, unless it’s our very own India in its ‘Unity in Diversity’?

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One may argue that the Indonesian group would bring more investments as time proceeds. Then my questions are: has that group got that reputation? It’s not Tatas or Ambanis or Bharti’s Mittals or Infy or Wipro or ITC or similar other Indian groups, or a global GE or Toyota again with both right intention and capability…we give land upfront, and investment will come later…we have heard many things like that before. Where’s the agreement? What’s the penalty clauses if they fail?

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Yes, few of us may have seen Indian media reports on credibility of this investor. I am not drawing any conclusions based on those media reports, but has any studied those in details? I am matter of fact ignorant of this group, but now research and even in-depth research with government resources don’t take much time and money.

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However what most knows is a sort of chemical hub proposed for Nandigram is capital intensive industry, and it’s not for organized farming, which even may demand more investment.
If that’s not land grabbing at the name of industrialization, at the name of attracting capital, I don’t know what it is.

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If this is what the dream of SEZs of our country that will drive industrialization, and thereby India to new highs…I am sorry. I am stupid then, and true, I was always stupid. Yes, I am angry, upset, frustrated since yesterday, and may not be thinking thro’ my head. I also believe in my heart that both our PM of India and the CM of my state, WB, is clean. At least they, to me personally, aren’t corrupt. But is that enough? The answer is both yes and no in present day India.

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But educated as they are, policy makers as they are, responsible as they are…I don’t see them competent enough to head a country or a state with that level of policies regarding SEZs. May be the fault is in their team, but it’s still their team.

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Therefore you and I, all Indians and all like-minded people of the world need to pitch in…in our respective roles…along with our existing roles.

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Howard Zinn, Professor Emeritus at Boston University and author of ‘Voices of People’s History of the United States’ said following:

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‘One of the things we can learn from history is that history is not only a history of things inflicted on us by the powers that be. History is also a history of resistance. It’s a history of people who endure tyranny for decades, but who ultimately rise up and overthrow the dictator. We’ve seen this in country after country, surprise after surprise. Rulers who seem to have total control, they suddenly wake up one day, and there are a million people in the streets, and they pack up and leave. This has happened in the Philippines, in Yemen, all over, in Nepal. Million people in the streets, and then the ruler has to get out of the way. So, this is what we’re aiming for in this country.

Everything we do is important. Every little thing we do, every picket line we walk on, every letter we write, every act of civil disobedience we engage in, any recruiter that we talk to, any parent that we talk to, any GI that we talk to, any young person that we talk to, anything we do in class, outside of class, everything we do in the direction of a different world is important, even though at the moment they seem futile, because that’s how change comes about. Change comes about when millions of people do little things, which at certain points in history come together, and then something good and something important happens.’

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I urge you to do that…for our country India…for humanity…for our next generations. While returning from Salt Lake in Kolkata this evening (15th evening), I saw various possessions and slogans for a better ‘Bandh’ (Strike) tomorrow. It’s bad…we don’t want that. But at the same time, let’s also not have a selective ‘bandh (amnesia) in our mindset’ by ignoring ground reality of corruption, wrong doings, mis-administration, a mini-event of ‘Remember Tiananmen Square’[7] being replayed in Nandigram on day-before (14th March, 2007).

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Let’s finally end in Bollywood style…remember ‘Pher Bhi Dil Hain Hindustani’ (We all are Indians?) of SRK…closed to the last scene when SRK appeals all to join him in stopping the hanging of an ‘aam hindustani’ (An ordinary Indian). None of us want to be alone in that journey…you will, when feeling alone, find me behind you and I will find some more in our this campaign. As he said…let’s listen to our hearts for a change.

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I know life is not Bollywood movies…but let’s try…pleaaaase….

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Quick references:

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1] ‘Foreign Direct Investments To and from China’ by Philippine APEC Study Center Network (PASCN), pp3 http://pascn.pids.gov.ph/DiscList/d99/s99-21.pdf. As the figure was astounding, I checked the reference for author, Rosalina Tan in Google scholar, and found evidence to find author credible enough. However one can never be certain about that without long term research, and I am not from this field.
[2] https://www.cia.gov/cia/publications/factbook/geos/in.html
[3] ‘The need of having a government’ http://desicritics.org/2007/03/13/024918.php
[4] As per a TIME-CNN report of 12th Nov, 2006 states ‘Tata Sons, the holding company that manages the group, is 66% owned by 11 charitable trusts, which spent $379 million on social causes in 2003-04’. One can calculate what the group profitability (and from their Tata Sons profitability, as Tata Sons is another share holder of group companies, so a % of group profitability comes to Tata Sons profitability. From ‘India’s Tiger’, http://www.time.com/time/printout/0,8816,1558320,00.html.[5] ‘Centre clearance later, state to go slow on Nandigram SEZ’ http://cities.expressindia.com/fullstory.php?newsid=223886, land requirement as per this is 27,000 acres, whereas for my calculations I assumed lower figure following next reference.
[6] As reported in Washington Post, ‘Indian Farmers Set Fire to Gov’t Office’ of 15th March, (today) http://www.washingtonpost.com/wp-dyn/content/article/2007/03/15/AR2007031500387.html
[7] Ashok Chavda, Mumbai, I believe someone like you and me in ‘Readerspeak: Shocking indeed is the news’ http://timesofindia.indiatimes.com/Shocking_indeed_is_the_news/articleshow/1765276.cms

Special Note added on 23/3: As that $175 trillion (or even more $469 trillion figure) sounded close to impossible, I started crosschecking. And now I believe in cited source, there exists a gap between billion and trillion; these two words may have been interchangeably used at least once in my citation (Reference 1 'Foreign Direct Investments To and from China’ by Philippine APEC Study Center Network). On page 7, it's $469 billion and on page 50, it's $469 trillion. $175 trillion was stated on page 3 and again on page 50. I have been trying to find out actual FDI flow in China which would be more than $ 2-$4 trillion by now (my guess), may even be little higher but likely to be still in single digits. I acknowledge this slip (in my citation, and it's my responsibility to check my citation as well; more so when it's closed to impossible). It's so gross that it should hit any. It did hit me too on that day itself…I should have double-checked. My sincere apologies… more so on what I stated on Indian democracy based on that reference (irrespective of the Nandigram incident in the background). However the broader point of less capital investment for chemical hub, and closed to 25% Indian land needed to bring in equivalent of Chinese FDI may still stand valid.

“Cumulative FDI into China is about $650 billion” - states ‘China’s Economy: Problems and Prospects(2007-2-14)’ @ http://www.danmex.org/spansk/tekst.php?id=327

2006-12-04T06:21:00.000-08:00

Singur pays the price for being left-behind

Singur, a so-long non-descriptive sleeping village in the district of Hooghly, and 40-KM away from Kolkata - erstwhile Calcutta, the capital of India under British rule till 1912 has suddenly become a flashpoint of interest in local politics drawing attentions from NGO activists to academicians and economists. There are three direct stakeholders in it - number one are the local farmers and villagers whose lands are being acquired for a project of Tata Motors (Bloomberg:TTMT@IN, Reuters:TAMO.BO), 2nd one being the Government of West Bengal - a state ruled by CPI(M) led left-winged political parties who's been in the power since 1977, a record seventh time nearing 30-years now, and the 3rd stakeholder is Tata Motors - a flagship company of the Tatas. Tata Motors has been pursuing a dream project of Rs. 100,000/car idea (around $2200/car) for last few years for the larger masses in India, and in other developing countries; for which, prototype being successfully developed; they want to set-up a green-field venture to commercialize this car. Incidentally, it's the same Tata Motors (erstwhile TELCO) who built India's first indigenous automobile.

The ambitious project of Tata Motors deserves Kudos from all over. The ambitious target of West Bengal Government, who were responsible in the de-industrialization of the state for almost 25 years in their ruling period and thereby missed the Information Technology, and India-growth story bus which resulted in better growths in western and southern states and even in northern states, now want to undo their mistake and take on aggressive industrialization. Just like moving against the tide results in wastage of efforts, rapid changes also bring lots of pains. This Government moved against the tide for twenty-five long years, and want to achieve in next ten years what others did in 35 years. In competitive economics, it's never easy playing a catch-up game, and therefore present ambitious policies may be questioned again. And coming finally to the rights of farmers and villagers - a section of it or that of most of them who have been opposing that project because part of Government's land acquisition includes these farmers' 1000-acres (almost 4 million square meters) farmland acquisition.

In India, 70% of people live in rural areas, and they depend on agriculture for their living. Many of these sections of people (as per a late nineties study, closed to 78% of population which even now would be close to 70% due to lopsided growth story) live at less than $2 a day. It's the same left front ruled government who earlier implemented an agricultural reform where part of the right to farmland was given to landless labors farming that land. Many within this body now feel present round of land-acquisitions as done for Special Economic Zones (SEZs) would result in reversal of earlier reforms.

Last week saw some popular show-biz politics around that event in West Bengal, a state in Indian federal system of 29-states now , accounted for more than 25% of India's GDP during its glory days not too long ago, in its state assembly where members fought between themselves, and broke furniture within the assembly. Trinamool Congress, led-by erstwhile firebrand whimsical leader, Ms. Mamata Banerjee who's moved from Congress to set up her own regional political party Trinamool Congress (Trinamool meaning Grass-root) that allied with earlier BJP led NDA, but found increasingly weakening base locally, is opposing the acquisition of agricultural farmland for this project. Next came Ms.Medha Patkar, a famous and respected NGO-activist who has taken up lot many cases in India (and expectedly failed also, like that of the rehabilitation issue for Sardar Sarovar project over the river the Narmada river and Central and western Indian states) who stated that both the politicians breaking furniture in assembly along with administrating subsequently breaking bones of protesting farmers are wrong.

Trinamool Congress called for a 12-hour state 'bandh' (strike) on 1st December after its members created raucous in assembly on 30th November. On 2nd state administrations apparently created raucous at the site to suppress the farmers' agitation. And if al those were not adequate, more bandhs follow now, one being for 24-hours on 5th December by SUCI - a Congress led trade union body and another by state's trade wing on 14th December.

Many showcase the clash as a price to be paid for late industrialization. There's a cost attached to everything - that of being rich to being a celebrity. Increasingly, many of the downtrodden of the society realize that there are costs of being left behind as well. The state primarily was the drivers of their backwardness, and then one fine morning - the state administration realizes their mistakes and tries to undo the damages done through its subjects again. So the people pay for the double whammy of the state.

In this whole affair, state becomes the winner. Tata Motors, following norms of the land would set up a factory and would make profits or losses based on their capabilities. The state, irrespective of Tatas making profits or losses would make money through levies (taxes - direct or indirect) because, at present agriculture is not taxable in India (rather subsidies flow into it). Even at a lower estimate of Rs. 100 crores ($ 22 million) perpetual levy that the state and central governments likely to accrue, with the prices of land expected to go up eventually all over India and more so in Singur with this project, it may be questioned on why the farmers get paid at present market price for forceful evictions.

States also do lie. A recent report 'Maharashtra farmers fight Government with Google earth' showed how Government in another state lied to its farmers in a similar land acquisition to its people - more so to the poorer farmers who consist as the major vote-bank for any Government all over India when it took over double-crop land by declaring it arid or single cropland. In a classic case of necessity is the mother of invention, these so-called farmers, with the help of Google-map showcased that the land was indeed double-crop land. Taking advantages of the ignorance of these backward people, even the state did stoop low in its mad rush of industrialization by depriving the farmers of their legitimate rights.

At the same time, welfare spends - meant for the poorer sections of the society have been dwindling rapidly all over India. The poor farmers are increasingly being de-possessed of their only known assets and over the time, majority of them would turn out to be marginal people in their own age-old land.

Tatas claimed that the project would bring local benefits and opportunities. That's not being questioned, it would happen. However, the skill sets needed, to en-cash on the newfound opportunities would be grabbed mostly by others in a competitive market economy.

It's the same story all over the world - people who join the party early make the most of it. In a program shown in National Geographic sometime back, they showed a tribal chief having an air-look of their land that was taken over from that tribal community days ago and was converted into modern urban society. The tribal chief told the correspondent in his dialect 'You people have stolen our land. All these lands down below are ours, and you have forced us to evict our own age-old land so that you could prosper'. It's been depicted in an article titled '(Red) Indians Owned the United States' . It's a different matter that entire Manhattan state, which was bought for $24 if were invested back in interest earning papers, could have resulted in phenomenal valuations that could buy the island back today. The tribals, expectedly didn't think so (none of us could also think that back in1624) and majority of them still remain marginalized there even today. It's only purely academic interest (The Power of Growth) that shows that $24 invested back in 5%, 7.5% or 10% annualized compounded returns would have been valued at $2.7 billion, $20.7 trillion and a mindboggling $128.7 quadrillion (a new figure to me and may be to many readers!) respectively whereas entire US market-cap stood at $15-20 trillion.

The same voices are repeated all over the world as country after country, society after society makes its effort to join the party of industrialization and development. More so are the voices that still happen to be the left behinds in developing worlds. As the state gets poor, it can't bargain with industries for a better deal. Prospering sttes can bargain, whereas backward states with poor infrastructure and record follow more of a beggars can't be choosers model while vying for investments. And that gets translated to the people of the state. And similar stories are repeated in Singur to lot many tribal-populated areas today as Government suddenly eyes their lands and minerals for industrial usage and growth.

The cost of being left behind is simply not having choices. Even choices to maintain status quo in their own land, which didn't see any development under state administration for years in our quest of civilization, and suddenly the call for development of the state and its demands are forced upon the same underdeveloped lot whose ignorance make them easier targets. It's this lot who don't even which doors to knock for help - they can't go (or afford) to court to get a stay order as otherwise practiced by the other sections who know their rights and would protect it if that's violated. The cost of being left behind is to be easy prey, and thereby suffer in paving away for mostly others developments.