Singur land: Mamata sending the wrong signal; and it’s about propriety

‘A fraud on the Constitution’ — that’s how the Tata Group sees the Singur Land Rehabilitation and Development Act, 2011. Passed on 14 June by West Bengal Chief Minister Mamata Banerjee, the Act empowers the state to take back the land leased to the company at Singur. The government intends to do so in a rather indecent hurry, disregarding the basic procedural decorum. Mamata is keeping her poll promise and there’s applause from the gallery but the development raises serious questions of propriety.

“It is immoral, unethical and unconstitutional for a state to take advantage of its own failures/wrongdoing and cause prejudice to the petitioner,” contended the counsel for Tatas, Samaraditya Pal, before the Calcutta High Court on Wednesday.

The land involved in the case is 645 acres. But it’s no more about the land itself since the original purpose of setting up the Nano factory is long dead and the only logical course for the government, given the political climate, is to hand the land back to the original owners; it is about the approach of the state government towards negotiated agreements with companies and the respect for the legal protection for the latter embedded in such agreements.

Policy continuity is crucial for a stable investment environment. Any shift has to be carefully calculated and if a bitter pill has to be administered, it has to be sugar-coated. Consider this hypothetical question: what if the Left comes to power after five years and scraps the Singur Act and all other agreements it has entered into? It’s a hypothetical situation but such developments erode the investors’ trust in governments.

The circumstances of Tatas’ exit from Singur are well-documented. They were forced out of the state following a Trinamool Congress-led popular agitation over land acquired from farmers. It was not a voluntary decision from the group, it was taken under compulsion.

The letter written by Tata Motors to the West Bengal Industrial Development Corporation (WBIDC) on 28 September, 2010, states that the firm had to “regretfully take the painful decision of relocating the plant outside West Bengal for reasons totally beyond its control”.

The West Bengal government’s position on this reeks of double standards. Citing the reason for re-possession of the disputed land, it puts the blame squarely on the Tatas, saying the project was abandoned by the group and there has been no employment generation nor any socio-economic development. True. But who was responsible for things coming to this pass?

“The people of West Bengal gave a verdict in favour of that political party which was responsible for compelling the Tatas to leave Singur. The same party has assumed charge of the state recently, and through its governing arm is now trying to justify its past actions by coming out with this Act,” Pal told the court.

The gazette notification to the effect makes clear hints at use of force if the Tatas did not relent. “The land belongs to the government, so you will have to vacate it. If you do not hand over possession, you can be driven out by force,” Pal told the court, summarising the content of the notice.

In its petition, the company says it continues to incur an expense of Rs 1 crore every month to maintain the Singur facility. It calculates its losses at close to Rs 1,400 crore and seeks compensation for it. It also argues that the government cannot re-vest the land to original owners as per law. The Singur Act violates the rights granted under Article 14, 300 (A) and the government’s action amounts to “hostile discrimination”.

It is up to the judiciary to take the final call on the dispute. But ham-handed attitude of the West Bengal government on the issue is discomforting. It is always supposed to be a situation of give and take between investors and the governments in question. Governments tend to be more accomodative since they stand to gain more, in terms of revenue, employment generation and positive image etc.

The message being emitted by the West Bengal government might act as a disincentive for potential investors. Mamata should be particularly careful since she is keen on attracting investment from the US and other countries to her state.