TATA MOTORS TO GET LAND IN WEST BENGAL COME WHAT MAY, SAYS

UNCLAS SECTION 01 OF 02 CALCUTTA 000453

SIPDIS

SIPDIS

DEPT PASS TO USTR

E.O. 12958: N/A
TAGS: EINV ETRD IN ECON EIND
SUBJECT: TATA MOTORS TO GET LAND IN WEST BENGAL COME WHAT MAY, SAYS
WB GOVERNMENT

REF: CALCUTTA 0411


1. SUMMARY: On October 4, 2006, an all-party meeting convened
by West Bengal Chief Minister Buddhadeb Bhattacharya failed to
reach a consensus on the land acquisition policy for the Tata
Motors Car Factory in Singur. With the leading opposition All
India Trinamool Congress (AITC) boycotting the meeting, the
Indian National Congress party (Congress) voiced its opposition
to the Communist Party of India - Marxist (CPM)'s policy, but
there are signs that the opposition is backing down in the face
of CPM determination to complete the deal by early 2007. End
Summary


2. West Bengal's Left parties, led by the CPM, have been in
power for three decades on the strength of land reforms the CPM
carried out in its first two terms between 1977-1988. With
declining agricultural productivity in the state, the CPM has
adjusted its policies to support industrialization based on
large scale manufacturing, hoping to stimulate job creation.
Because industrial infrastructure is generally poor in the
state, potential investors tend to look for suitable land close
to the capital city of Calcutta.


3. In early 2006, Tata Motors announced plans to set up
manufacturing of a low-priced car in India and Chief Minister
Buddhadeb Bhattacharya took a personal initiative in wooing the
company to invest in West Bengal. Tata Motors was shown land in
various parts of the State and chose nearly 1000 acres of land
in the town of Singur in the Hooghly river basin, only 45
kilometers from Calcutta and considered to be the most fertile
land in the state. State opposition parties led by AITC leader
Mamata Banerjee (whose party also represents Singur in the state
legislative assembly) opposed the land purchase for the car
project on the grounds that multi-crop agricultural lands were
being taken for industrial purposes.


4. At the all party meeting on October 4, 2006, the CPM-led
government told the political parties, "We cannot stop acquiring
land at Singur under any circumstances. The Tatas want to start
producing cars by 2008 and they need the land urgently by this
year end. We are committed to handing over the land in the
stipulated period." The government noted that the total 997
acres required by Tata Motors had been acquired by the state
nodal agency, the West Bengal Industrial Development Corporation
Ltd. (WBIDC). The land is ready for sale and the WBIDC is busy
filling in the low lying areas before handing the land over to
Tata Motors.


5. State Commerce & Industry Minister Nirupam Sen, addressing
the Opposition's objections, said that of the 997 acres, 900
acres is "sully" or fallow land with the rest being "suna" or
multi-crop land. Also, he noted that the GOWB had changed the
original site plan submitted by the Tata Motors in order to save
164 acres of fertile land. Sen further pointed out that between
December 2005 and June 2006, 572 acres of land were sold, and
argued that many non-farmers were already buying land from
farmers in the Singur area. So far, the WBIDC has completed the
purchase of 610 acres of the total 997 acres for the Tata Motors
project without any objection from the owners.


6. Although the AITC boycotted the all-party meeting, the
Congress advocated the AITC point of view, making three demands:
1) a policy on the planned use of agricultural land; 2)
creation of a Land Commission; and 3) no hand over of Singur
land to Tata Motors before the planned use of agricultural land
policy is decided. Chief Minster Bhattacharya rejected the call
for a Land Commission on the ground that an Agriculture
Commission already has been established, he rejected the demand
to stall land acquisition since the Tatas had set a deadline,
and he said if land is not handed over to the Tatas by the
stipulated time, the investment project would not come to West
Bengal.


7. COMMENT: While the all-party meeting on October 4 failed to
iron out the political differences on the Singur land
acquisition for the Tata Motors Car project, the CPM has
remained firm in pushing forward Tata's land purchase. A
planned 24-hour strike on Monday, October 9, 2006 called by the
AITC was reduced to 12-hours, ostensibly to avoid greater
inconvenience during the Ramadan period. The opposition
realizes that the government will acquire the land at any cost
in order to showcase W. Bengal's industrialization drive. The

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opposition parties are also keen to avoid the appearance of an
anti-industrialization stance, while still using the convenient
political stick of farmers' rights to bash the Left. The
Congress is caught in the middle, not only because it runs the
central government with CPM support, but also because of the
criticism its ruling coalition is facing from the CPM over the
similar issue of giving agricultural land for Special Economic
Zones that Congress-led governments are implementing in Punjab,
Haryana, and Maharashtra.
JARDINE