Ok, tata: Bengal throwing good money after bad?

Anindita Chowdhury

KOLKATA, Sept. 15: The Tatas may have finally endorsed the West Bengal government's fresh rehabilitation and compensation package for land-losers to ensure that Tata Motors Limited stays put it Singur and the Nano can roll out in a "congenial atmosphere", but at what cost? Both literal and figurative, not to mention political. For, according to calculations made by The Statesman, the government will not only have to dig deep dig into an already depleted public exchequer once again to keep its enhanced compensation promise, but government investment in Singur will be at least one third of the Tata Motors' Rs 1,500 crore investment. And if the VAT holiday and subsidised electricity given to the Tatas, and the vague promises of jobs to land-losers are factored in, the total public investment in a private firm's project to build a car, even if it's the world's cheapest, could well be close to the amount being spent by the business house itself!The irony is even more pronounced when one keeps in mind that the Singur project is no private-public-partnership enterprise ~ it's rightly, and unashamedly, a commercial venture by one of India's biggest business houses. And whatever Mr Buddhadeb Bhattacharjee may believe in connection with industrialisation in one state, apparently through one project in the vanguard, to mix a couple of socialist metaphors, the question arises: is it worth it?The state government has already paid close Rs 133.10 crore, according to the Comptroller and Auditor General's report, as compensation to land-losers and the fresh package which promises to pay 50 per cent over and above the present compensation paid would mean an additional outflow of Rs 65 crore from the exchequer. Then there is a new commitment to pay accumulated wages of 300 days to landless labourers. According to the government, the number of such registered landless labourers and unrecorded bargadars is 955. The minimum daily wage is Rs 75 a day according to the National Rural Employment Guarantee Act (NGERA), which amounts to Rs 22,500 for 300 days. Multiplied by 955, that's 2.14 crore rupees. And this, only for landless labourers registered with WBIDC; the government has, indeed, gone a step further by stating that those with EPIC and NREGA job cards will also be eligible for this compensation even if they are not registered.The government has also promised to provide "sustainable economic existence" to land-losing families, jobs, in other words, although not spelt out so bluntly, and that's yet another claim on public money. This applies to around 5,000 to 6,000 families (as many land-losing have gone their separate ways over the past two years), a senior official at Writers' Buildings told The Statesman. Whilst some jobs will be provided in the private sector, an overwhelming majority will have to be accommodated in government jobs with all benefits, said the official. The wage bill is likely to be substantial.All of this only adds to government decisions already taken, no doubt in what it perceives as the public interest and geared towards putative job creation, of giving the Tatas land at a throwaway price, a VAT exemption to match that offered by the Uttarakhand state government, and extending a loan of Rs 200 crore to TML (effectively Rs 143.10 crore).Take the effective government, i.e. public, investment in terms of land cost first: At current market value, the price for the 645.67 acres at Singur (that's the deal with the Tatas; the vendors have been given land at a different rate the figures for which, incidentally, have not been provided to the CAG by the state government) is Rs 93.73 crore. Though the Tatas are paying Rs 855.75 crore over a 90-year period, at present value (according to a February 2006 government directive laying down the basis for making such calculations with reference to a 99-year lease) this would be equivalent to paying Rs 18.62 crore. Given the uncertainty over the Tatas commencing work at Singur, forget a 90-year stay, it would be imminently fair and sensible to regard the state's invest­ment as the difference between current market price and what the Tatas are paying in current terms. That amount is Rs 76.11 crore. As for the government, i.e public, investment in terms of VAT concessions, they are substantial, even if it's a fair discount, as the government claims, to attract private investment to Bengal in a competitive environment.
The CAG report has stated that the West Bengal Industrial Development Corporation (WBIDC) incurred a loss of Rs 81.52 crore on account of the Tata Motors plant at Singur. "The company incurred excess expenditure of Rs 2.99 crore towards payment of avoidable interest of Rs 1.44 crore and delayed consent awards of Rs 1.55 crore to landowners beyond statutory provisions. Further, it subsidised TML by 76.11 crore on leasing of 645.67 acres of land for 90 years," the report reads. Government also paid Rs 3.19 crore for direct purchase of land and payment to bargadars, and another Rs 2.96 crore as development expenses and training programme expenses for the land-losers for economic reha­bilitation came to Rs 78.52 lakh.
The state commerce and industries minister has justified the state governments' munificence towards the Tatas say­ing that an auto-cluster would lead to an economic boom for both Singur and the state. It may be recalled that the same state government has now asked the investors to finalise their rehabilitation package for land-losers along with their detailed project report.

Source: The Statesman, 16 Sept, 2008

We demand return of Singur farmland to the peasants

The West Bengal government, CPM and a section of media have been engaged in campaign that if Tata has to quit from Singur, then it will be a great loss for West Bengal as already chief ministers of five different states invited Tata to shift the nano project in their states.

It is now important to remember that Tata had to quite from Kalinganagar (Orissa) and Dhaka (Bangladesh) because of strong public protest. There is no point to believe that in other states Tata will not face any resistance from the people as the government has to acquire land for the proposed project; none of the chief ministers will donate their paternal property to Tata. These chief ministers and the state machinery are the agents of multinationals and comprador big capitalists. They have engaged themselves in a race to prove their loyalty to their masters.

The CPM says and a section of Bengalee middle class believe that the Singur nano project along with ancillary units will generate a huge job market that could help relieve the problem of unemployment in the state. It is better to remember that having engaged somewhere with a salary not sufficient to meet the ends should be termed as severe exploitation rather than employment. All over the country and in the West Bengal people have to work mostly in contractual basis more than eight hours a day for mere Rs 60 to 80. In Singur project the scenario will not be the different. The project is not to solve the problem of poverty and unemployment, but to maximize the exploitation.

Our critics, at this point will say, if there will be no investment by the multinational or comprador giants, then whatever people can earn now will be stopped. Therefore, for the interest of people we need their investment although the working condition may not be ideal. To improve the condition, we should negotiate with them, but must not oppose.

With due respect to our critics we would like to mention that people simply cannot negotiate with these sharks. They are motivated by maximization of their profit; and it means maximization of exploitation of people. Here negotiation means acceptance of the terms and conditions which favours the interest of the multinationals and comprador capitalists. And we already showed why we should not call the engagement of the people in their projects as employment.

Our intellectual critics sometimes remind us the huge value addition that takes place in a factory. From the same land the annual income must be far less if it is engaged in agriculture. Here we need to mention that we do not consider the issue as a simple matter of industry versus agriculture. In contrast, we see what fraction of the income will be for the people from a given land. In case a factory is built by a corporate giant on a land, the fraction of the income retained with the people is far les than that retained if it were engaged in self-farming. We do not blindly oppose building a factory on a land, but do oppose maximization of the extraction of profit for the interest of corporate sectors.

We have no doubt over the dwindling situation of agriculture. But, it is because of the severe semi-feudal (for example in the form of usury) and imperialist exploitation. Peasants do not have any control over the seeds, fertilizers and pesticides. Introduction of the 'hi-fi' technology actually devastated our crop diversity and organic basis of the farming. Pesticides and chemical fertilizers are being used indiscriminately and unscientifically, which is just to promote their sale (and essentially magnifying the profit). There is no way under the circumstances peasantry can survive. The only way out from this situation is to demolish the semi-feudal basis of the Indian socio-economic foundation which is the support of the imperialist plunder.

Looking for an alternative outside the agriculture only helps strengthening the imperialist clutch over the people.

In order to strengthen the unity against multinational corporations, comprador big capitalists, we support the resistance against any attempt for the maximization of their profit. We therefore demand unconditional return of farmland to the peasantry of Singur.

Singur land lease agreement

[The following report was published in Singur, our previous blog on 11 March 2007. We republish it again considering its importance right now.]

West Bengal government signed the land agreement with TATA for the proposed Singur plant. It’s a good deal for TATA, no doubt.

Government gives the land to TATA with a lease for 90 years.

The bonanza could be summarized as follows:

We must appreciate the potential of West Bengal government for discovering tricks to make us fool. Apparently, TATA will pay more than Rs 800 crore. But, look at the payments it needs to pay in the first 30 years. Only Rs 56.25 crore. In the next 30 years it will pay Rs ~200 crore. But, if we consider the rate of inflation (currently more than 6%) then this figure will not be that big. The same is true for its payment for last 30 years.

Essentially, TATA doesn’t need to pay anything right now for the land. Although West Bengal Industrial Development Corporation (WBIDC) has borrowed Rs 150 crore with 10% annual interest to acquire this land. WBIDC has to pay Rs 15 crore per year as interest; for 90 years it has to pay Rs 1350 crore for interest only, whereas for 90 years TATA will pay only Rs 800 core.

It means West Bengal government signed an agreement to subsidize TATA for Rs 700 crore over the period of 90 years. Again consider the figures. For the next 90 years, TATA will pay Rs 800 crores and enjoy Rs 700 crore as subsidy. In reality the actual subsidy is far bigger than what is being reflected in those figures. WBIDC has already borrowed Rs 150 crore. Considering the rate of inflation, after 90 years, this amount will be really huge. And it has to pay Rs 15 crore each year as interest. On the other hand right now TATA needs to pay only Rs 1 crore in a year. And it will pay its most of the payment at its last 30 year period of lease.

Who will actually pay the subsidy?

Buddha?

CPM?Or other running dogs of imperialism-comprador capitalism?

No. This subsidy will be paid from our hard earn money. With our hard earn money these running dogs of imperialism and comprador capitalists subsidize crores to Multinational and big companies while letting our people dieing of starvation.

This is what they call as DEVELOPMENT.

We call as LOOT.

Don’t you think it is our duty to make an end of it?

(The detail of the lease agreement is taken from the bartamanpatrika.com, March 11, 2007)

Update

Nirupam Sen, the commerce minister of West Bengal government confirmed the above mentioned lease agreement in assembly on March 15, 2007 (source: ganashakti, March 16,2007). He pointed out that TATA will enjoy other facilities like Tax holidays for Singur plant.

CAG indicts WBIDC for excess expenditure on Singur land

Kolkata, Mar 27 The Comptroller and Auditor General of India has indicted West Bengal Industrial Development Corporation for excess expenditure of Rs 2.99 crore on land acquisition for the Tata Motors' small car project at Singur where land acquisition for the project had sparked violent protests.The WBIDC incurred an excess expenditure towards payment of avoidable interest of Rs 1.44 crore and delayed 'consent awards' of Rs 1.55 crore, the CAG report for the year ended March 31, said.Further, it subsidised Tata Motors Limited by Rs 76.11 crore on leasing of 645.67 acres of land at Singur for 90 years, the report said. The CAG report said that of the total 1,006.45 acres acquired by the WBIDC, 70.78 acres were waterbodies and land meant for internal roads, sub-stations etc. With balance 935.67 acres available for leasing out. Till July, 2007, the company had leased out 645.67 acres to Tata Motors Limited and 190.44 acres to its 30 vendors.''It was noticed (April 2007) that the company suffered a loss of Rs 79.10 crore due to injudicious borrowing, irregular payment of 'Consent Awards' to land owners beyond statutory provisions and subsidising the lease of land to Tata Motors Limited,'' it said.The WBIDC, it said, leased (March 2007) 645.67 acres valuing Rs 96.72 crore to Tata Motors for 90 years against annual lease rent of Rs one crore from the first to fifth year and rising over the years to reach Rs 20 crore from the 61st to the 90th year.As per the government directive (February 2006) for long-term leases for 99 years, the lessee should pay 95 per cent of the market value of the land at one-time premium on commencement of the lease and pay annual rent at the rate of 0.3 per cent of the market value of the land.''Accordingly, on the lease of 645.67 acres to the Tata Motors Limited, the Company should have realised premium of Rs 91.88 crore and lease rent of Rs 29 lakh annually''. PTI

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