Gets it wrong on Pranab, court snubs her on Singur
Though land acquisition continues to be India Inc’s biggest bugbear—a CMIE study of the top 20 industrial projects shelved last year says 8 were put on the backburner because of land acquisition issues—the Calcutta High Court struck a big blow for India Inc on Friday when it ruled the Act which empowered the Mamata Banerjee government to take back land leased to the Tatas for the Singur Nano car project was unconstitutional and void. While Tata Motors stock saw a spurt when the verdict was announced since the company now has a chance to recover some part of the money it sunk into the project before it moved to Sanand in Gujarat—the West Bengal government will challenge the verdict in the Supreme Court—Mamata remained largely unrepentant. Before the verdict, she told reporters that “unwilling farmers in Singhur (would) get back their land” and that the state was committed to this—on her Facebook page, she said she had no comments to offer.
This makes it the second time in recent weeks when the mercurial Mamata has got it wrong—while carrying her opposition to Pranab Mukherjee’s candidature as President a bit too far, Mamata has risked, at least for now, any chances of the Bengal financial assistance package getting revised upwards. And her continued opposition to Tatas has scared off industry. Though there have been queries and investment proposals worth R80,000 crore in the state, only a handful projects have taken off the ground after the Mamata government came to power. The state government’s confusing signals on land policy—“we will not interfere in land acquisition, private players should buy directly”—has really meant that big-ticket investments are shying away from Bengal. Even with Singur, the state is staring a protracted legal battle, which does not augur well for investment-starved and debt-ridden Bengal. While the Tatas have set up a cancer hospital at Rajarhat since the Singur setback, at last year’s Tata Global Beverages AGM, Ratan Tata had said the company would think of new investments in Bengal only when it was satisfied that “there is no hostility towards us.” Of that, however, there is no sign as yet.
While Mamata’s eclipse in the UPA has thrown up some hope of reviving the reforms she opposed, India Inc’s land acquisition woes aren’t going to go away in a hurry. The Parliamentary Standing Committee on Rural Development that was looking at the new Land Acquisition Bill remains opposed to the government helping in land acquisition for even infrastructure projects that are implemented—as most are going to be now—as public private partnerships. The saving grace, though, is that some leeway—on when the R&R obligations would kick in, for instance—has been given to state governments. While some states may rush to take advantage of this, it’s clear Mamata’s West Bengal isn’t going to be one of them.