Identifier
Created
Classification
Origin
08KOLKATA275
2008-09-23 08:55:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Kolkata
Cable title:  

THE POLITICS OF SINGUR

Tags:  PGOV ECON EINV ELTN EIND IN 
pdf how-to read a cable
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ZNR UUUUU ZZH
R 230855Z SEP 08
FM AMCONSUL KOLKATA
TO RUEHC/SECSTATE WASHDC 2147
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHEHAAA/NSC WASHINGTON DC
RHHJJPI/PACOM IDHS HONOLULU HI
RHEFDIA/DIA WASHINGTON DC
RUEAIIA/CIA WASHDC
RUEHCI/AMCONSUL KOLKATA 2625
UNCLAS SECTION 01 OF 02 KOLKATA 000275 

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON EINV ELTN EIND IN
SUBJECT: THE POLITICS OF SINGUR

REF: KOLKATA 160

KOLKATA 00000275 001.2 OF 002


UNCLAS SECTION 01 OF 02 KOLKATA 000275

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON EINV ELTN EIND IN
SUBJECT: THE POLITICS OF SINGUR

REF: KOLKATA 160

KOLKATA 00000275 001.2 OF 002



1. (SBU) Summary: The conflict in Singur over land acquisition
for the new Tata Motors Nano automobile factory has been the
theater on which the ruling Communist Party of India - Marxist
(CPM) and West Bengal's primary opposition party Trinamul
Congress Party (TMC) have staged their latest epic battle.
Despite historic talks mediated for the first time by a state
Governor and threats of West Bengal losing the world famous Tata
Nano plant, the CPM and TMC appear to both be set on being the
winner of this conflict rather than accepting a political tie.
With national elections coming in the New Year, Singur-like
conflicts are likely to continue in West Bengal. If CPM and TMC
leaders are not careful, there will be no winner from these
destructive battles and, the loser will most likely be the West
Bengal economy. End summary.

Background on Singur Impasse


2. (U) The two and one-half year-old Singur crisis is centered
on the CPM-led Government of West Bengal's (GOWB) acquisition of
land for Tata's famous Nano car. According to post contacts,
when the GOWB granted land concessions to Tata, it believed it
was strong enough to offer land and generous incentives to
corporations without any political opposition. The GOWB was
therefore surprised when the speed and lack of transparency in
the land acquisition process prompted a backlash among farmers
in the area who were unwilling to sell their land. The TMC, a
regional opposition party led by fire-brand Mamata Banerjee,
took up the cause of the farmers and has led a series of
protests against the land acquisition, mainly in Nandigram and
Singur. As a result of protests in Singur, Tata Motors has
ceased construction work on its Nano factory until protests over
land acquisitions are ended.


3. (U) After Tata announced the possibility of pulling out of
Singur and with no prospect of CPM and TMC finding a compromise
that met Tata's requirements, West Bengal Governor Gopalkrishna
Gandhi agreed to mediate talks between the two parties. This is
the first time in Indian history that a state governor has

mediated a political conflict of this kind. The grandson of
Mahatma Gandhi, Gopalkrishna Gandhi commands considerable
respect in West Bengal. Gandhi hosted Chief Minister Buddadeb
Bhattarchee and Banerjee at the Governors Mansion on September 7
and they hammered out a vague arrangement known as the "Sunday
Agreement," which ended TMC's siege of Singur pending a final
settlement for the farmers.


4. (U) Soon after the "Sunday Agreement" was reached, TMC and
CPM announced conflicting understandings of what had been
decided. TMC continued to demand that no less than 300 acres
inside of the Tata project zone plus an additional 100 acres
outside of the zone be returned to the farmers. TMC also
demanded additional cash compensation for the farmers. The GOWB
offered 70 acres within the project zone, unspecified alternate
land outside of the project zone and a 50 percent cash premium
over the original acquisition price to all of the affected
farmers. The GOWB also offered an additional 10 percent premium
to farmers if they accepted the deal by September 22. The GOWB
guaranteed one job per family if a family member failed to find
a job with a private sector company associated with the project.
With no agreement in site, TMC has called for renewed protests
on September 25.

Singur vs. Nandigram


5. (U) There have been numerous comparisons between the current
Singur situation with the previous land acquisition furor in
Nandigram, where an outpouring of violence led to the deaths of
14 people at the hands of police. However, there are
significantly different socio-economic dynamics that play into
the political calculus. Nandigram is 60 percent Muslim;
literacy is very low; it has no industrial base of which to
speak; and it is a rural area far from large urban centers such
as Kolkata. In this social environment, heavy-handed land
seizure by the GOWB without consulting the local population and
without transparency was met with severe resentment, ultimately
enabling TMC to score major gains in local elections.


6. (U) Conversely, Singur is geographically much closer to
Kolkata; it has an industrial history (Hindustan Motors
manufactures the Ambassador automobile in nearby Hooghly
district); the Muslim population is significantly lower (25
percent); literacy rates are higher; and the local population is
much more receptive to industrial development. As a result, 80
percent of the roughly 10,000 landowners willingly accepted the
GOWB's initial offer in Singur, despite the speed and lack of
transparency of the transaction. In contrast to Nandigram, the
GOWB has not used force to remove protestors despite the closer

KOLKATA 00000275 002.2 OF 002


of a national highway and the inability of Tata workers to the
worksite.

TMC: A Formidable Challenger


7. (SBU) Through the force of Mamata Banerjee's personality, TMC
has become the principal opposition party in West Bengal,
winning a significant number of seats in the local panchayat
elections in May 2008 (see reftel). Political analysts describe
Banerjee as autocratic, eccentric, mercurial, and not
particularly well suited for coalition politics. While Banerjee
claims she has no political goals beyond her current seat in
Parliament, a senior TMC member confirmed to CG what is widely
believed -- that Banerjee wants to be Chief Minister of West
Bengal.


8. (SBU) TMC has a long way to go, however, before it can topple
CPM's decade's long hold on power in West Bengal. In the last
state assembly elections in 2006, TMC garnered roughly 21
percent of the vote compared with the CPM's 51 percent. The
remaining votes were split as follows: Congress 15 percent; BJP
8 percent; and all others 5 percent. Officially, the TMC is
part of the National Democratic Alliance (NDA) which is led by
BJP. Unofficially, the TMC has been operating alone and has
made no public appearances with BJP in several years. According
to post contacts, Banerjee has avoided allying herself with BJP
for fear of losing the Muslim vote, particularly since
Banerjee's constituency was recently redrawn to include an
additional 30,000 Muslims. While TMC is closer ideologically to
the Congress Party, it had not joined the United Progressive
Alliance (UPA) because the CPM had been a UPA ally. Even though
CPM has now left the UPA, contacts tell post that Banerjee is
hesitant to partner with the Congress Party because of tensions
created by Banerjee's split from Congress in 1998 and the fact
that both parties target essentially the same voter groups.


9. (SBU) In the Singur standoff, Banerjee has proven to be a
shrewd politician. She entered into talks with the CPM only
after public opinion shifted against TMC after Tata's
announcement that it might abandon its Nano factory in Singur.
According to post contacts, Banerjee sensed that the TMC would
be blamed if Tata leaves West Bengal and quickly made
pro-industry and pro-development comments in an appeal to both
rural and urban constituencies. This shift in approach appears
to have worked, with Banerjee once again being portrayed as a
champion of the people.

CPM: Confused by Strong Opposition


10. (SBU) According to post contacts, the CPM is finding it
difficult to respond to TMC's challenge of CPM's decades-long
hold on power in West Bengal. Land acquisition has become the
field in which this struggle for power is playing out.
Initially, Nirupam Sen represented the CPM in talks with TMC.
Sen, an ally of Prakash Karat (the General Secretary and head of
the national CPM),took a hard line stance against all TMC
demands. However, after the "Sunday Agreement," Sen disappeared
from the negotiations and was replaced by Minister of Housing
Gautam Deb, a former aide of 94-year old former Chief Minister
Jyoti Basu. (Note: Basu still wields substantial political
influence within the CPM and is Buddadeb Bhattarchee's mentor.
End note.) In his capacity as Housing Minister, Deb has
extensive experience in structuring land acquisitions and is
believed to be the chief architect of the CPM's latest offer to
TMC.

Comment


11. (SBU) TMC is clearly gaining support in the battle over
Singur; but if the conflict is not settled soon and Tata pulls
its Nano plant out of West Bengal, Banerjee will most likely
find her hard earned successes slip away. If she is able to win
concessions from the GOWB for local farmers, Banerjee will
solidify her image as the defender of West Bengal's politically
influential small farmers, for whom land ownership has been a
cultural symbol of social and economic status. Still, TMC will
need to ally with other opposition parties to topple CPM's hold
on power and Banerjee's track record for coalition building is
weak. TMC will also have to overcome doubts about its readiness
to govern, given that it has no economic plan of its own and no
organizational infrastructure.
PAYNE