INDIAN POLITICS IV

LAND ACQUISITION AND SEZ

THE CASE OF WEST BENGAL

SUBMITTED BY: ANTARA RAY CHAUDHURY

M.A. IVTH SEMESTER

CPS/SSS

COURSE INSTRUCTOR: PROF.SUDHA PAI

DATE: 26.4.2010

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INTRODUCTION

One of the burning issues that has dominated Indian politics in last three years as far as policy

making is concerned and has been hugely debated in the academic circle is the issue of SEZ and

subsequently land acquisition. With Govt of India approving around 550 SEZ projects so far

questions have been raised regarding the relevance of these zones in the long term economic

policy of India. What has become the bone of contention is the acquisition of agricultural land

for non-agricultural basically for industrial purposes. The situation in West Bengal is of no

difference and the acquisition of agricultural land for industrial purposes in Singur and

Nandigram have met with protests from the peasant community and resulted in violence which

has thrown the entire issue of land acquisition for SEZ into a much deeper controversy as

projects like SEZ require land acquisition which in turn is related with the issue of displacement

and when displacement comes into the picture then automatically the issue of compensation and

rehabilitation come in. It is like a chain reaction one automatically follows the other and

therefore at the policy level whenever a govt decides to go for acquiring land for “public

purposes” these things have to be taken care of. My concern in this paper stems from the fact that

the issue of SEZ today has made the land question one of the central issues of policy making in

India and how to make sense of this particularly when at one level the debate is being pitched in

terms of agriculture vs. industry (particularly in Bengal) and on the other the question of

displacement, depriving people from their means of livelihood and subsequently the question of

resistance come in. Therefore it is quite clear that this is a complex situation and making sense of

the entire issue by taking every aspect of the situation into account is beyond the scope of my

paper therefore I will restrict myself at the policy level mostly and try to assess the politics part

of it. As the title of the paper suggests it will mainly focus on West Bengal as I am more familiar

with that part of the country and the politics of that state and again the massive controversy

surrounding SEZ also came after the Singur, Nandigram agitations. Therefore I have designed

the paper in the following manner: first I will talk about the land acquisition act and its current

status in the legislature, then a brief discussion about SEZ and then in the last section I will talk

about the situation in Bengal.

SECTION I

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LAND ACQUISITION ACT AND ITS CURRENT STATUS

“The genesis of land acquisition in India lies with the Bengal Regulation Act of 1824(I) enacted

to further the British colonial interests.”1 This was replaced by act of 1850(I) extended till

Calcutta town so that any land can be acquired without any legal hazards for public purposes.

Finally the Land Acquisition Act of March 1894 replaced all previous acts and the main purpose

of the colonial ruler becomes to acquire land by paying as minimum as possible amount of

compensation and acquire land for the public purposes the area of which was ill defined. The end

of colonial rule in 1947 and enactment of republican constitution in 1950 did not change the act

and art.372 allowed all the colonial rules to remain in force unless they were explicitly repealed.

After the independence the problem of acute poverty and landlessness were dealt by the govt in

terms of abolition of zamindari act and land reforms where surplus land was distributed to the

landless by respective state govts. Under that situation it was fairly easy for Nehru’s govt to take

land from the rich landlords by paying small amount of compensation for the developmental

purposes. This was not so easy when the question of taking land from the smaller farmers for

heavy industrialization came which actually brought the question of what constitutes fair

compensation? However even in Nehruvian period the govt did not only acquire land for the

public purpose at that time it also acquire land for the private companies .in the land mark

judgment in R.L AURORA VS THE STATE OF UP 1962 the Supreme Court held that the govt

could not justify acquiring land for a textile machinery manufacturer in the name of public

purpose. Instead of revising the act the immediate response of the govt was to amend the act by

land acquisition amendment act 1962 with retrospective effect to supersede the judgment .Thus

the Nehruvian state succeeded in preserving the authority of the govt to acquire land for private

enterprises in the name of public purposes. Lands were acquired not just for projects like

Durgapur Steel Plant or DVC but also for building townships such as Durgapur, Chandigarh, and

Gandhinagar etc. Therefore from 1960s tom1980s the state played the role of “venture

capitalist”2. The political climate of the country changed with opening up of the Indian economy

1990. With market coming to play big role it become easier for the govt to acquire more and

more land for private enterprises in the name of public purpose therefore each time invoking the

1 Sanjukta Ray & Sreemoyee Mahapatra: Evolution of Political Economy of Land Acquisition, IIR report 2009.pp 61

2 Ibid.pp.623

Land Acquisition act of 1894. However if the nature of economy has changed and more and

more private companies are coming into the picture then on the other hand there is also

increasing protests that are coming in when people whose livelihood are going to be affected by

land acquisition are not readily giving away their lands everywhere they are rising up in protest

throwing challenge to the state. Now whether this is sign of deepening of democracy with

increasing political awareness about one’s right at the grass root level is a separate question all

together. But what it has done that it has opened up the possibility to revise the colonial act of

1894 particularly to redefine the term “public purpose”.

Before proceeding further we can take a look how the current land acquisition act looks

like in a nutshell what is the procedure to acquire land: “1) one requiring body places a request

for land acquisition before the govt represented by the district collector. 2) The collector after

studying the proposal notifies the same. 3) The probable land losers are identified, their land

measured, compensation calculated. 4) If the govt collector is satisfied, compensation is awarded

notified land is acquired, and transferred to the requiring body even though the land losers may

not have accepted the compensation. 5) Those land losers who are not satisfied with the

measurement of the land, the declared compensation and apportionment of the said

compensation between the interested persons can approach the courts for redressal”3. It is clearly

evident from the existing law that it does not give room to the land losers to contest and prevent

their land from being acquired. The existing law compels them to abide by the decision taken by

the govt. therefore the question arises how a colonial law such as the LAA OF 1894 can still

exist in an independent democratic country ? However the current situation in the country

regarding acquiring land and rising protest among the peasants has forced the govt to take a fresh

look at this age old law and in 2007 the Union Ministry has introduced in December 2007 a new

LAA to replace the old one which is known as Land Acquisition (amendment) Bill 2007. The

bill redefines public purposes as land acquired for strategic defence purposes, infrastructure and

contiguity purposes or for any project useful to the general public where 70% of the land has

already been purchased. The bill bars acquisition for the companies except under the 70%

condition. It has defined person to include company, body, association of individuals whether in

corporate or not. But the clause ‘or for a company’ has been omitted throughout the principle act.

3 Mohammed Asif. The land acquisition act, EPW JUNE 19, 1999, PP 1564.4

In February 2009 the govt of India tried to get the bill passed in the parliament but it failed and

currently the bill is lying with the parliamentary committee.

SECTION II

SPECIAL ECONOMIC ZONES IN INDIA (SEZS)

The issue of special economic zone is intricately linked with the process of land acquisition.

Because in order to establish SEZ the first thing the govt needs to do is to acquire the desired

land. A large no SEZs have come into existence in India in the last two-three years and many of

them occupy hundreds of acres of land each. Now any discussion regarding sez first and

foremost requires an understanding about what is SEZ? “A special economic zone is a

geographically bound zone where the economic laws in matters related to export and import are

more broadminded and liberal as compared to rest parts of the country. This area is projected as

duty free area.”4 “Within the SEZ production can be carried out by investing companies utilizing

a large no of concessions-tax exemptions, guaranteed infrastructure and the relaxations of labor

and environmental standards”.5 The world first known instance of SEZ have been found in

industrial park set up in Puerto Rico in 1947. In the 1960s Ireland and Taiwan followed suit but

it is in 1980 that china made SEZ gain global currency with its largest being the metropolis of

Shenzhen. India was one of the first Asian countries to recognize export processing zone (EPZ)

model in promoting exports .India’s first EPZ was set up in Kandla in 1965. In order to create an

environment for achieving rapid growth in exports the SEZ policy was announced in the EXIM

(EXPORT AND IMPORT) POLICY 2000. The Govt of India enacted the SEZ ACT which

received the presidential assent on June 2005.the act and the rules were notified on February 10,

2006. The preamble to the SEZ Act 2005 says that this is “an act to provide for the

establishment, development and management of the special economic zones for the promotion of

exports and for matters connected therewith and incidental thereto”6. The promise and the

rationale of the act are being captured in the section (5) of the act which says: “5 (1): the central

govt while notifying any area as a special economic zone or an additional area to be included in

4 G.Paramasivan & J.Sacratees: special economic zones in India. Pp.357

5 Ibid.pp.358

6 Naresh kumar Sharma: special economic zones: socio-economic implications. EPW. may 16,2009.pp.185

the special economic zone and discharging its function under this act shall be guided by the

following namely: a) generation of additional economic activities, b) promotion of exports of

goods and services, c) promotion of investments from domestic and foreign sources, d) creation

of employment opportunities, e) development of infrastructure facilities, f) and maintenance of

sovereignty and integrity of India; the security of the state and friendly relation with the foreign

state.”7 So it is quite obvious that SEZs are not just being justified as export promotion

mechanism but also as engine of growth, development, employment generation scheme. But

whatever may be the promise and rationale of the act the most controversial issue that remains

with SEZ is the land acquisition mostly from the farmers which was followed by subsequent

protests. It was argued that the farmers whose lands have been taken away neither have been

properly rehabilitated nor have been compensated. Therefore it seems that SEZS actually

destroys more jobs than it could possibly create. Estimates of the number of people to be

displaced by a proposed SEZs are as yet unavailable and protests against this proposed model of

economic development are increasing which in cases like Nandigram resulted in incidence of

violence. Therefore the very promise and rationale behind establishing SEZS are facing

challenge today. Doubts are being raised that it is development for whom? How this proposed

model can be the “carrier of economic prosperity” which will thought to bring rural

development, more foreign investments, make Indian firms more competitive in the global

market, and help in slowing down rural migrations. Because the fact remains that these enclaves

being virtually special enclaves will not just enjoy exemptions from the govt in terms of lower

tax benefits but also will be able to bypass labor laws because of that laborers working in these

areas will not have job security. Then how this carrier of Indian industrialization will be able to

create all round transformation in the country becomes a million dollar question? The logic of

establishing SEZS are based on the understanding of the magic that can be created in the

economy by growth and competition. In the open market neo-liberal economic paradigm it is a

well established fact that to survive in a global market a country must be competitive but we

should also remember that it is a well known fact that competition in the globalised world itself

is unequal. And in a country like India this has led to another sort of competition that is

competition among the states for attracting more and more FDIs. The far reaching shifts in

Indian policies in the last two decades which has made the entry of global corporate capital in all 7 Ibid.pp.18

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possible economic sector has systematically downsized labor and at the same time it has been

fruitful in systematically marginalizing one section of the population of the country. Then how

far going ahead with SEZs is a feasible idea? Well here one interesting example is most of the

given is that if communist China can follow this model of economic development and their

success story regarding SEZs are well known to all then where lies the problem?

Here I think one should spend little time knowing certain facts about the Chinese

SEZ policy. First of all china’s SEZ policy is Govt driven and ownership of land remains with

the state. In India the private sector will develop most of them and a limitless amount of land is

being handed over to the corporate houses for this purpose. Compared to six big SEZS in china,

in India more than 400 SEZs are already approved. Initially there was a cap of 150 on the total

number of SEZs to be permitted later on the govt removed the cap to permit as many number as

possible. This sort of proliferation is definitely a cause of concern. China’s SEZs are mostly

strategically located in the southeast three of them in Guangdong province alone. These areas are

closed to ports but in India hardly there is any such long term thinking is visible. In china

incentives also vary from zone to zone. India offers tax incentives across the board to all

companies. More than anything else the social cost of the success story of Chinese SEZs are

high including child labor, arable land loss etc. The wages in china are significantly low and

there are various cases of labor unrest that has been taking place so the story is not devoid of

inequality. Keeping these in mind we can now actually proceed to the situation in West Bengal

and the resistance that the projects of SEZs are facing.

SECTION III

THE SITUATION IN WEST BENGAL

What makes the case of SEZS in West Bengal special in terms of area of research is the fact that

apart from the incidence of peasants being up in arms against the state because they do not want

to give away their lands and then the subsequent cases of violence, is the fact that how come a

state ruled by a communist Govt for more than 30 years which is known for its land reforms in

the state can actually go ahead with something like SEZ? How can a govt which has made the

landless empowered can actually go ahead with land acquisition isn’t it reversing its own course

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of work? However the govt version comes in the form that the logical step after land

redistribution is the land acquisition. Well the answer to this question is not so simple and

therefore from land reforms to land acquisition the case of West Bengal becomes special and

interesting. Therefore before going to the current phase of affairs I would like to take a look into

the brief history of the land question in West Bengal.

The first decade of the left rule in west Bengal actually tells us a story of

significant progress in rural sector basically due to three reasons. Firstly, after coming to power

in 1977 the left started embarking upon a series of land reforms. Land reforms were done

basically in two forms- barga and patta. Barga gave the share cropper protection against the

eviction from the land and also assured him a fixed share of the output. Patta means

redistribution of ownership of excess land acquired from the rich landlords through

implementation of land ceilings. “Up to the year 2000 1.6 million bargaders are officially

recorded. Land has been redistributed among 2.745millions pattaders and taken together barga

and patta it has actually covered 41.3% of the total rural population of west Bengal. And in terms

of land redistribution west Bengal accounts for 20% of the total land redistribution in the country

though it only accounts for 3.5% of the total land in India”8. Secondly, new method of cultivation

using high yielding variety of cultivating seeds was introduced. This is called Boro cultivation.

Thirdly there was decentralization of rural power through introduction of three tier panchayati raj

system. This ensures representation of the landless laborers in the local level of decision making.

All of these led to the prosperity and growth in rural west Bengal. West Bengal emerged as the

largest rice producing state in India contribution for more than 15% of the total rice production.

But unfortunately the agricultural growth slowed down in 1990s.This has happened due to

number of reasons- “firstly, frontiers were reached where bringing new lands under Boro

cultivation became impossible. Secondly, productivity increased but it could not sustain longer

agricultural growth. Thirdly, the market strategy did not work to export rice to other states and

abroad. Apart from that west Bengal agriculture has a perennial problem with agriculture and

that is very adverse land to man ratio. Therefore productivity in agriculture is certainly not low

but if the production is divide into number of heads depended on the land then per capita

availability is certainly low. So the matter remains that even after such progressive land reforms

8 West Bengal human development report 20048

and Boro cultivation west Bengal in this new century still remained quite poor and backward.

According to the National Human Development Report 2001in 1999-2000 the All India per

capita rural consumption was RS 486 per month and the corresponding figure for west Bengal

was Rs 454. In the same year the all India rural poverty remained 27.09% whereas that of west

Bengal was 31.85%. But on other aspects like life expectancy and literacy the west Bengal

villages remain ahead. Therefore the west Bengal remained a middle ranking state in the 21st

century. Now the question arose that how to get out of this stagnated situation because there are

serious problems in the agricultural sector and therefore one of the obvious answer that comes is

that any development in the state now requires industrialization. Now industrialization cannot be

pulled out of thin air definitely it will require land and land is required not just for building up

factories but also infrastructure. If basic infrastructure is not available then no investor would

come to set up factories. But the question is from where this huge amount of land would come?

Now in west Bengal 63% of the total land is being cultivated and therefore it became quite clear

that land for industry would include agricultural land. Therefore the debate or the controversy

regarding acquisition of arable lands for industry not only deprive people from their livelihood

but also in future create serious threat to food security. Alongside the issues of arable lands being

used for agriculture and food security questions also being raised about the kind of industries

govt is considering and whether they are going to lead to environmental degradation or not? Now

apart from these issues another point that has been raised that who will acquire the land? Well

there are two ways of acquiring a land- first the investor can go to the market and can directly

negotiate with the farmer for the required land and secondly government can acquire the land

from the owner and then give it to the investor with a pre negotiated price. Now in an ideal

situation it might seem that a direct negotiation between the buyer and seller is required and then

why govt should intervene in between? The same question arises for west Bengal also. Now for

west Bengal one thing has to be remembered that due to land reforms and pressure of population

upon land holding is very much fragmented than any other state and this makes the direct

purchase of the land from the owner by the investor quite undesirable because multiple

ownership of a land makes it difficult for the investor to bargain and it actually becomes more

costly for the investor. So in a case where land holding is thinly spread out among the large

number of farmers then in that scenario the government intervention looks desirable. However

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the question still remains that what happens when the govt acquires the land where the farmers

are not ready to give up their lands? Then acquisition of land by using force which leads to

confrontation with the people how far is it justified? Still now the govt has actually proceeded to

acquire land in places like Singur and Nandigram by invoking the 1894 act the arbitrariness of

which is already being discussed. Now when the left came in power in 2006 with the huge

mandate one of their main pre election campaign was the industrialization. So it was of no

surprise that as soon as they came into power they started the process of industrialization. The

problem started when immediately after the election the govt wanted to acquire 1000 acres of

land in Singur for the small car project of TATA motors. On 25th may 2006 the industry minister

of the state Nirupam Sen announced that the state govt would acquire 32000 acres of lands

surrounding the area of Kolkata as a primary step to set up industries. On that same date when

the officials of TATA Motors along with the officials of west Bengal industrial development

corporation visited Singur the local peasant immediately gathered there to block the teams visit

and registered their protest. The farmers in Singur immediately after that form the “save

agricultural land committee” and started with a demonstration in front of the BDO Office on

June 1st 2006.What is interesting to note here that these farmers or these rural population actually

forms the main support base of the Left in Bengal. . Another interesting phenomenon that is

noticeable here is the presence of women in the agitation. In terms of its historical relevance

Singur was one of the epicenter of the Tebhaga movement in late 1940s led by the undivided

CPI. There is a famous story by Manik Bandyopadhay on that episode called “CHHOTTO

BAKUL PURER YATRI”. However if Singur became a burning issue of taking industrial land

for agricultural purposes then the controversy became fourfold with the incidences of

Nandigram. Nandigram actually took this controversy of acquiring agricultural land for industry

to a new level altogether. Not only was the resistance much steeper this time (for which Singur

pave the way) but also the events of 14th march put up a big question on the left politics in the

state. 14 people lost their life in police firing and the CPI (M) led left govt came under severe

criticisms. Prof. Amit Bhaduri has called this “developmental terrorism”. Prof.Prabhat Patnaik

has commented that the “appalling tragedy of Nandigram will haunt the left for a long time to

come.”9 However he has made a larger point about the root cause of a tragedy like Nandigram

lying in the larger neoliberal policies being imposed upon the country after 1990. He points out 9 Prabaht Patnaik. “In the aftermath of Nandigram”, EPW, may 26th,2007

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to the fact that the kind of industry that is possible under the neoliberal policy regime is the

corporate industrialization and this type of industry by its basic nature is anti people. It creates

very little room for direct employment. Prof .Tanika and Sumit Sarker have termed the incidents

of Nandigram as “the story of how neoliberalism gets to be installed.” Therefore they have raised

the issue of why the traditional support base of the left has actually gone against its policies?

The west Bengal govt wanted to build a chemical hub by the Indonesian business

group called Salim group at Nandigram and the peasants were clearly not ready to give away

their lands. They have risen in protest and the sword of eviction from their land has actually

overnight created the anti eviction committees like BUPC ( Bhumi Uchhed Pratirod

Committee).These committees are spearheading struggles by organizing resistance, recruiting

volunteers, at some places they are arming themselves. The area of Nandigram saw wave of

violence not just once but twice in march and in November. Apart from the oppositions parties

like Congress, TMC, SUCI , the CPI(M) was also criticized by its front partners like

FB,RSP,CPI etc. Not just condemnation they actually suffered a huge set back in May 2008

panchyat elections when it was virtually wiped out from Singur and lost three district councils in

Nandigram. Not just the support bases among the rural poor the ruling CPIM has also lost its

intellectual support from many corners. The Tata group ultimately had to withdraw from Singur

and the govt had to shift the site of the proposed chemical hub into Nayachar. But what these

kind of resistance actually did is that it opened up a whole lot of new sets of questions about not

just how to go about a developmental project and what should be the way of industrialization

because nobody is denying the fact that the state need more industries but the question is what

kind of industries and how to go about it? At the same it has also gave the lesson of how to

resist land grab? The case of west Bengal has actually became a test case for SEZs in the country

it has among other thing made the legislators cautious that what might happen if forceful land

acquisition is implemented. At the same it has thrown the question of adequate compensation

and rehabilitation? The govt of west Bengal has so far proceeded to acquire land under the Land

Acquisition Act 1894 and here the compensation has to be based upon the current market value

of the similar land used for similar purposes. Apart from the value of land there are other kinds

of damages that have to be paid in terms of compensation because of the associated damages of

land acquisition. Economist Abhirup Sarkar argues that the compensation offered by the west

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Bengal govt is highly inadequate and unless this particular inadequacy is removed the political

unrest and resistance to industrialization cannot be settled.10 Apart from the issue of those who

owns the land and their eviction and the matter of compensation the matter is more worse for

those who are landless tillers those who just till the lands to earn their living what about them?

They are not going to be compensated and they do not possess the necessary skills to be

absorbed as the industrial laborers in the industries that going to set up in the SEZs. And hence

one should also look into the fact of the kind of industry that is coming up in most of these SEZs.

And if land has to be taken for industry then this agricultural laborers should be adequately

compensated as well. Therefore the entire scenario of land acquisition, SEZS are emerging as a

highly complex process where whether it is Orissa’s Kalinganagar, or Maharashtra, Kerala

similar events are keep happening.

One of the main reasons of these events of political unrest and resistance

surely lies with the fact that the states are entering into competition with each other in order to

woo more and more private investments which has become the most important agenda for

development in this era of market economy and it seems it does not matter whether the state is

ruled by left or any other govt. This becomes very much clear if one looks into the deals that are

being offered to the investors specially the amount of concessions. If the primary requirement of

the entire process of industrialization is the land then there are three main parties to the entire

process the landowners, the investors, the govt ( without counting the landless agricultural

laborers) and mostly the last one plays the role of a mediator but the problem arises when the

mediator does the mediation being concerned about the investors and not to the people who

choose to vote for them to keep them in power and forgets the fact that it has to get the mandate

of the same people after every five years. This sort of strategy of development is not only

dangerous leading to all kinds of unrest but also in terms of long term industrial policy is

untenable. And therefore it is high time not just to change the strategy or outlook of the state

govts across the country towards the issue of land acquisition and SEZs but also high time to

change the policies regarding land acquisition and related problems of displacement and

rehabilitation. It is definitely time to come out from the age old colonial act.

10 Abhirup Sarkar. “Development and Displacement”. EPW, April 21.2007.12

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GAUTAM RAY(ED): NANDIGRAM AND BEYOND.

P.ARUNACHALAM(ED): SPECIAL ECONOMIC ZONES IN INDIA: CHINESE

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INDIA INFRASTRUCTURE REPORT 2009: CHAPTERS 5 &6: EVOLUTION OF

THE POLITICAL ECONOMY OF LAND ACQUISITION & EMINENT DOMAIN

POWERS; RATIONALE, ABUSE AND WAY FORWARD.

MOHHAMED ASIF: LAND ACQUISITION ACT: EPW. JUNE19.1999

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PRABHAT PATNAIK: IN THE AFTERMETH OF NANDIGRAM: EPW.MAY

26.2007

AMIT BHADURI: DEVELPOMENT OR DEVELOPMENTAL TERRORISM? EPW.

FEBRUARY 17.2007

ABHIRUP SARKAR: DEVELOPMENT AND DISPLACEMENT:LAND

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7.2007

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NARESH KUMAR SHARMA:SPECIAL ECONOMIC ZONES : SOCIO-ECONOMIC

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PARTHASARATHI BANERJEE: LAND ACQUISITION AND PEASANT

RESISTANCE IN SINGUR: EPW. NOVEMBER 18 .2006

MALINI BHATTACHARYA: NANDIGRAM AND THE QUESTION OF

DEVELOPMENT: EPW. MAY 26.2007

SABESTIAN MORRIS & AJAY PANDEY: TOWARDS REFORM OF LAND

CQUISITION FRAMEWORK IN INDIA: EPW. JUNE 2. 2007

D. BANDYOPADHYAY: SINGUR :WHAT HAPPENED ,WHAT NEXT AND TIME

TO PAY THE COST: EPW: NOVEMBER 29.2008

ARUP KUMAR SEN: NANDIGRAM : A TALE OF DEVELOPMENTAL

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