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A Ballad of Singur: Progress with Human Dignity

The idea behind the car factory in Singur was one of using market principles of growth to transform a predominantly agrarian society. This idea, envisaged by the state government, failed because it did not take into account the important aspect of the value of land to peasants and the dignity it accorded to them. The opposition to the car factory, on the other hand, never had a concrete alternative in mind and did not understand the necessity for peasants to also benefit from individual progress, a process of development that is possible only through industrialisation.

COMMENTARYoctober 25, 2008 EPW Economic & Political Weekly10A Ballad of Singur: Progress with Human DignityRanjit SauThe idea behind the car factory in Singur was one of using market principles of growth to transform a predominantly agrarian society. This idea, envisaged by the state government, failed because it did not take into account the important aspect of the value of land to peasants and the dignity it accorded to them. The opposition to the car factory, on the other hand, never had a concrete alternative in mind and did not understand the necessity for peasants to also benefit from individual progress, a process of development that is possible only through industrialisation.In the village of Singur, 40 kilometres from Kolkata, an integrated small-car project was under construction by a renowned Indian company of the private sector. For its site, farmland of 1,000 acres, owned by 12,000 plot-holders, was acqui-sitioned by the government of West Bengal and leased to the company for 99 years. The procedure of acquisition was subse-quently validated by the High Court of Kolkata. Forty per cent above the market price of the land was fixed as compensa-tion to the landowners. A few of the plot-holders refused to part with their property and did not collect compensation cheques. An opposition party designated them as “unwilling farm-ers” (albeit some of them were absentee landlords or businessmen) and launched a protest movement. Its manifesto was summed up in banners: “No industry on arable land. Return our land”. Support for the movement was voiced from different corners. A few political par-ties, overt or covert, joined the ranks. “Kolkata Intellectuals”, as they are called, held repeated street demonstrations in the city. Groups of distinguished ladies visited the village in sympathy. According to press reports, Gopalkrishna Gandhi, honourable governor of West Bengal, in a programme organised by the Indian Chamber of Commerce in Kolkata on September 24, 2008, said: Land is limited. Land is precious. Land holds a special value to farmers and their families. It’s not an impersonal, dematerialised share certificate that you buy and sell with every swing of the Sensex. Therefore, we have to be sensitive to the responses of those who lose their land and livelihood to projects for industry, housing and infrastructure, know-ing that industry needs space. Insisting that the governor had wanted land-based rehabilitation and not the monetary package on offer for the Singur plot-holders, the most prominent leader of the movement demanded return of 300 acres of land within the project area and an additional 100 acres nearby: 400 acres in all. Addressing a public meeting in Singur three days later, the West Bengal president of the Indian National Congress reiterated the land-for-land formula. “The government has no land bank”, the prime opposition leader had already revealed to the public this understandable kind of land-bankruptcy of the government. Now, wherefrom would the additional land to pay the compensation of acquired land come, no one explained. It is, however, not at all difficult to see that compensation forfarmland in kind would unleash an endless chain-reaction: take land from Amal to compensate Kamal; then from Bimal to pay Amal; from Parimal to pay Bimal; and so on ad infinitum. In response, the government had an-nounced a revised compensation package with, inter alia, an enhanced monetary sum, employment of one member from each family within a year, and 70 acres of land within the project area, as against the opposition demand for a total of 400 acres. West Bengal government’s official slogan is: “Agriculture is our base; industry the future”. Yet the movement insisted on not-less-than 300 acres inside the project area. This is surprising. Foundation of the site has been strengthened with powerful ma-terials for the science mandated stability. As an unintended consequence, the land has ceased to be arable for the foreseeable future. The movement leaders are vocal about their compassion for farmers; but what would the “unwilling farmers” do with such barren land located in the midst of a mother-plant of small car and its ancillaries? Old BattleThe Singur story so far looks like a repeat of the old battle between two ideas, namely, physiocracy, and capitalism. To the physiocrats, flourishing in mid-18th century France, only land was genuinely productive, while other works in the economy such as industry andcommerce were mere manipulation with already existing stuff. Only in agriculture does the Ranjit Sau ( taught Economics at the Indian Institute of Management, Calcutta.
COMMENTARYEconomic & Political Weekly EPW october 25, 200811real production happens: from tiny seeds do plants grow so much and bounties of crops sprout; whereas primitiveaccumu-lation by capitalism devoursfarmlands and fills the skylines with factories belching smoke and dust.Is the factory of a luxury commodity like a car, on farmland, justified in as poor a country as India? Well, first of all, scarce resources like land and capital are to be allocated between competing sectors in accordance with their relative productivity. It is in the next step that preferred goods for consumption or other use are pur-chased from cheaper markets elsewhere. Production and consumption are two distinct activities, better kept in separate categories and addressed with separate rules. That is the logic of economics. But what about food security and people’s livelihood in the first place? In India, new industry would require a small fraction, possibly much less than 1 per cent, of the country’s cultivated area. With appropriate water management alone, agriculture can grow faster, i e, evidently above 4 per cent a year, which would well redeem the farmland transfer to industry. The potential of value added and jobs, direct or downstream, in the wake of the Singur car plant is far ahead of what farm-ing could do on that field.The ongoing controversy is reminiscent of discussion and debates of the 1950s on India’s development planning. Prasanta Mahalanobis formulated a strategy; Vakil and Brahmananda of Bombay University suggested an alternative model. Likewise, we now have the official strategy of devel-opment using the global marketplace, contested as usual by several suggested alternative approaches. To begin with, we shall analyse two rival schemes for Singur, namely, the offi-cial one proposed by the West Bengal government, and the other declared by the opposition. We shall proceed to the broader issue of the country’s overall development, which would offer an essen-tial perspective in which the particular position of Singur has to be assessed.Freedom of PeasantryDemocracy has three parameters, of which the premier one is liberty, i e, indi-vidual freedom, followed by equality, and fraternity. When would a peasant be considered free? What constitutes his free-dom? European literature has laid down three conditions. The peasant is free, (a) if no outside interest – seigneurial, urban or capitalist – comes between him and his land; (b) if he is subject to no bond-service; and (c) if his work is productive enough to feed him and leave a surplus to purchase at the very least what he needs. In India, the third condition, namely (c), cited above, remains most starkly unsatisfied. On this count, if nothing else, India’s peas-antry is not free. One thousand acres of project land in Singur had more than 12,000 plot-holders; that is, the average holding per peasant was as tiny as one-twelfth of one acre. There could hardly be a grimmer indicator of the peasant’s initial predicament. Another part of his existence is no less atrocious. Bound by the social order, farm-ing is an unshakable obligation inherited by the peasant. He is historically a descendant of those tribesmen whom Chandragupta Maurya herded into labour-camps of crown villages, in 321 BC, and the Gupta emperor fettered them with social chains, five centuries later. Since then, all his ancestors had trodden the same path. That archaic arrangement persists still today. The governor, Gopalkrishna Gandhi is right to observe: “Land is limited. Land is precious. Land has a special value to farmers and their families.” Indeed, land is so scarce that Singur peasants surviv-ing at the edge, as they are with so little farmland as one-twelfth of one acre on average (1,000/12,000), can never retain freedom, by the criterion of condition (c). For freedom, they need more productive employment. It may be too late for the senior farmers currently at work. But time for their children has not run out yet. Should they be given full material and moral support for education and training as far as they can go in school, college, university, they would emerge in due course as a doctor, engineer,pilot, poet, accountant, philosopher, musician, cricket celebrity, professor, and the like. That denouement would be their libera-tion in social and economic domains. They would no longer be virtually bonded labour to push plough. The issue today is notmerely to make a peasant a better peasant with liberty, but also to give the unwilling farmers an opportunity to escape from their socio-economic bondage. Millions of those unfortunate farmers tread the countryside. Frustrated, a few had taken the extreme plunge in despair. Land is precious, indeed; and it is an asset which knows no depreciation or carrying costs. Its price never falls, rather all the time goes up. The land market is asymmetric. The rich never sell land, they only buy or grab. The poor surrender it under the duress of emergency – debt burden, starvation, infirmity, daughter’s marriage. The market price is a gross under-estimate of the value of land to a peasant.Land holds a special value to farmers and their families. A peasant family re-ceives, not one, but as many as four kinds of benefits from its strip of land, namely, (a) employment of family members; (b) income from crops by way of accrued rent and profit, over and above the virtual wages; (c) a sense of family security; and (d) social esteem accorded to a landowner, however minuscule, as opposed to the derision thrown at a landless labourer. The market price cannot reflect the full range of all these. Of the four, the last two, i e, sense of security and social esteem, are incommensurable with standard pecuniary measurement; money cannot procure them. A substitute job for an unskilled farmer as compensation for land would only perpetuate his family’s agony across generations to come; that low-paid job is hardly better than a bit of opium to soothe the pain of penury.What is the objective of the opposition? From the displayed banners it seems twofold: “No industry on arable land”; and “Return our land” – the former looks like a basic doctrine; the latter a tactical move in the given contingency. They expose an absolute devotion to arable land, coupled with disinterest in industry. But, why is the movement so vehement on having 300 acres, not anywhere else, but at the heart of a car facility whose soil has been incidentally cleansed of agricultural fertility?It is land which is the fundamental con-cern of the opposition, not the human beings. Paddy-fields display an idyllic beauty of nature, no doubt; but it does not
COMMENTARYEconomic & Political Weekly EPW october 25, 200813newly employed have to contribute suffi-ciently to increasing the general produc-tive capacity of the economy, so as to make this overall matching between demand and supply possible. However, the balance has to be achieved for the economy as a whole, but not for each individual employment project.Investment for employing more people will involve construction activities of various kinds, which in turn would require steel, cement, etc. At the same time, workers would buy mostly food and clothing with the wage they receive. Then, at the next round the employees and employers who supply the steel, the cement, the food, and the clothing would buy, with the profits they make and the wages they earn, more goods and services. This is a process which goes on in many rounds rather quickly dwindling in size at each round. Economists call it the “multiplier mechanism”. The critical link between the present and future in this model resides in this: “The long-term viability of the scheme would require that the additional thousand workers employed in the economy would contribute to producing directly or indirectly output worth [rupees] 1.8 crores per year.” No mechanism has been pro-vided to ensure this to materialise, except invoking direct foreign investment. The model says: direct foreign investments, which are gener-ally intended at increasing the productivity capacity of the economy, tend to be more strongly attracted by the size of the domes-tic market, and the level of infrastructure rather than low wages or tax concessions. …There might even emerge a degree of conver-gence between the strategies of moving to-wards a scheme of full employment financed by government borrowing from the market, and attracting direct foreign investment. …If the full employment scheme succeeds in expanding them [the market and infrastruc-ture facilities], both domestic and foreign in-vestment would tend to be crowded in rather than crowded out (p 86). That’s all about the long term.In the short run, “The natural first step in the process is to offer wage employment opportunities to all [workers in organised or non-organised sector] at a legally stipu-lated minimum wage” (p 59). This policy would help expand demand for goods and services in the domestic market. What assignment would the minimum-wage earners in public works have? Initially, preference would be given to “quick-yielding projects”, such as “the construc-tion of the building of a local health centre, a primary school, a warehouse, drinking water facility, sanitation, etc”. But, how many workers would be ab-sorbed in such projects, and for how long? Is this scheme capable of laying down a solid foundation for “domestic and foreign investment” to crowd in? For a starving, unemployed person, a job, however low-paid and demeaning, is a boon that helps his feeling of dignity, no doubt. But, humane dignity is worth more than receiving a hand-out. Misreading BhaduriIronically, the opposition intellectuals in Kolkata, at least, have evidently mistaken Bhaduri’s treatise as a declaration in favour of an economy completely insulated from the world market, and dedicated primarily to agriculture at any cost. But, therecourse to the domestic market, to begin with, has only an instrumental value, not a normative imperative, in the bookunder reference. The explanation is elaborately given in terms of the insta-bility in global financial markets. Today, the volume of private trade in foreign exchange markets is a staggering daily volume of some 1.2 trillion (1012) dollars. Less than 2 per cent of this is needed at the most for financing export and import, and even less for financing the current level of direct foreign invest-ment. The daily volume of private trade in foreign exchange can easily over-whelm the foreign exchange reserve of any central bank. The combined reserves of all the central banks of the world put together is less than a couple of days’ total volume of private trade in foreign exchange. Theoretically speaking, the reserves of all the central banks in the world could be wiped out by hostile private trades in a few days. No wonder then that individual governments feel vulnerable. Now, consider the case of India, the book goes on, against this background of global capital markets. With a relatively small capital market or a relatively soft currency by international standard, the Indian rupee and Dalal Street can be set in an uncontrollable downward spiral due to capital flight triggered off by the speculation of a few important private players in foreign ex-change markets (pp 43-44). The “Kolkata intellectuals”failed to recognise, in this context, the immense contribution that the export potential emanating from Singur small-car factory could have made to the nation’s progress.Agriculture and industry are intimately related; one takes inputs from the other, and vice versa. In the contemporary world, a self-reliant economy, as against a closed economy, cannot survive without a strong export capability.In technical language, Bhaduri’s model is built on a comparative-static structure that allows transition from one static equi-librium position to another, initiated by a once-for-all rise in autonomous invest-ment; it has no provision for dynamic growth, in the absence of direct foreign investment. The opposition intellectuals have read too much into it, and misrepre-sented its content.Concluding RemarksFor long, the prowess of politics has been overestimated again and again. The historic Soviet revolution could not last for even a century; the Chinese revolution changed its colour even faster. In both cases, weakness of the economy proved to be the proximate nemesis. India must have a strong economy; or else the country’s future would be at stake.Individual liberty is the first principle of democracy, followed by equality and fraternity. During the Italian Renais-sance, from among the masses in the vil-lage, town, family, clan, or tribe, the in-dividual was discovered and identified as “the point of unity of all that have been thought and done by man” – that was a static conception of his personality. In course of five centuries, the individual came to acquire a dynamic connotation: “man is not a single unchanged entity at all, but a sign of change, the site of a continuous transformation”. Progress of the nation means continuous transforma-tion of the individual to realise his poten-tiality, no stop here. This should be understood by those who speak for the peasant.

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