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October, Singur Crisis & West Bengal: Political Cartwheel That Ailed the Economy

#Opinion: Capitalists and entrepreneurs don’t seem interested in the state despite it making efforts, outwardly.

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(This is part one of a four-part 'October' series that revisits significant historical events or policies and how the lessons learned from them continue to be of relevance in present-day politics and society.)

In June 2023, India witnessed one of the worst train accidents when a Bengaluru-Howrah Shalimar Express and a Howrah-Chennai Coromandel Express derailed and crashed near Balasore in Odisha. Of the 290 that were killed in the tragedy, about 105 were from West Bengal, poor migrants earning meagre livelihoods in Southern states as West Bengal offers no worthwhile opportunities whatsoever.

The media coverage of the horrible tragedy also revolved around how people from Bengal were increasingly being forced to migrate as they had no future. Poor folks from Bihar, Jharkhand, and Odisha migrating for jobs were not new. But this tragedy perhaps, for the time, triggered some debate in national media about the state of West Bengal's economy.

The authors talked about this at length and some more research by the CVoter Foundation revealed that West Bengal was indeed, regressing, relative to other Indian states when it comes to industrialisation and GDP growth.
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Singur Crisis: A Watershed Moment in West Bengal Politics

It is while discussing this distressing trend of a state that was once the most industrialised state of India that the co-author remembered an open letter that Ratan Tata had written to the people of West Bengal in October 2008 after the Tatas formally announced that they were withdrawing the Nano car project from Singur a cluster of villages about 40 kilometres away from the state capital Kolkata.

In hindsight, the contents of the letter appear frighteningly prescient: “Would they like to support the present government of Buddhadeb Bhattacharjee to build a prosperous state with the rule of law, modern infrastructure, and industrial growth, or would they like to see the state consumed by a destructive political environment of confrontation, agitation, violence, and lawlessness?"

In many ways, the Singur fiasco marked two seminal moments in the political and economic history of West Bengal. Politically, the swaggering dominance that the Left had over electoral politics was shattered.
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About seven months after Ratan Tata announced the death of the Nano project in West Bengal, the results of the Lok Sabha elections in 2009, heralded the imminent demise of the Left. The Trinamool Congress led by firebrand Mamata Banerjee soared from one to 18 seats while the CPI(M) led by Buddhadeb Bhattacharya crashed from 26 to 9 seats.

Of course, in the 2011 Assembly Elections, the last rites of the Left were performed. The CPI(M) tally came down from 176 in 2006 to 40; the TMC tally went up from 30 to 184. The sitting Chief Minister Bhattacharya himself lost the Jadavpur Assembly seat.

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An Ideological Shift Post Left Government

By the turn of this century, the per capita income of West Bengal was three times that of Odisha. In 2022-23, the per capita income of Odisha (Rs 150,776) had surpassed that of West Bengal (Rs 141,373). Just in case, you wanted to know, West Bengal is ranked 21 among Indian states in per capita income.

Bengal and the contemporary history of the state before and after Singur is a fascinating study in political economy. Even before the Left romped to power in 1977, the state had been marred by strikes, violent assaults on entrepreneurs and managers, and a complete disdain for capital.

Once the most industrialised state, Bengal had already started witnessing the flight of capital in the 1970s. That process gathered momentum in the 1980s and 1990s even as the Left exercised a complete stranglehold over all institutions of the state. But after Jyoti Basu made way for Buddhadeb Bhattacharya as chief minister in 2000, there was a churn in the ideologically rigid Left. “Intellectuals” started openly saying that West Bengal badly needed investments, entrepreneurs, factories, and jobs.

In what was considered a daring move back then, the government invited the Salim Group of Indonesia to set up a chemical hub-based Special Economic Zone of the kinds set up in Maharashtra & Gujarat in a place called Nandigram. The TMC, in particular Mamata Banerjee and her then-trusted colleague Suvendu Adhikari led a prolonged protest against land acquisition.

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In March 2007, violence led to police firing in which 14 people were killed. The SEZ plan was abandoned. Determined to attract fresh investments, Team Buddhadeb had persuaded the Tatas to set up their ambitious 'Nano small car project' at Singur.

The project held out the tantalising promise of tens of thousands of jobs as other investments would follow. But Mamata Banerjee led such a fierce agitation against land acquisition for the Nano project that violent protests became the norm.
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Tata Project in Bengal: An Opportunity Lost

On 3 October 2008, as Kolkata was gearing up to celebrate Durga Puja, a Tata Motors team led by Ratan Tata held a long meeting with Buddhadeb and his senior officials. Soon after the meeting, Tata called a press conference where he announced that Tata Motors was withdrawing the Nano project from the state and would relocate to a more investment-friendly destination.

Tata told the assembled media persons: “This is a decision we have taken with a great deal of sadness…You cannot run a plant when bombs are being thrown at the site. You cannot run a plant when workers are being intimidated and threatened…I had then hoped for understanding from Mamata Banerjee and had hoped that the agitations would stop. But they only increased. And we are very sorry for taking this decision, but we were left with no choice."

The then chief minister of Gujarat Narendra Modi pounced on the opportunity and invited Tata Motors to set up its greenfield factory at Sanand in Gujarat on very generous terms. Back then, there was not a single small or large automobile factory or anything in Sanand.

Today, the region around Sanand is a major auto hub in India that reports revenues in excess of USD 4 billion, exports of more than 800,000 cars, a thriving auto-ancillary industry and more than 50,000 jobs. Many migrant workers from West Bengal are earning a livelihood at Sanand.
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What Led West Bengal's Economy To A Downward Slope?

The authors always rely on data rather than speculation, “expert” analysis, or rhetoric while making a point. The accompanying chart explains everything that has gone wrong with West Bengal with simple and brutal clarity.

The chart shows the average annual growth rate of GDP of 10 major randomly selected states between 2011-12 & 2021-22. Not surprisingly, Gujarat and Karnataka had the highest growth rates consistently over a decade.

Surprisingly, Madhya Pradesh is at number three in this 10-state list. Equally surprising is Odisha matching the growth rate of Telangana. But West Bengal cuts a sorry figure with an average annual growth rate of just 4%. That’s the key reason why the per capita income of Odisha is now higher than that of West Bengal. Why has this happened?

Quite simply, capitalists and entrepreneurs don’t seem interested in the state. It is not as if the state has not made any effort, at least outwardly and visibly.
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Just recently, Chief Minister Mamata Banerjee has come back from a tour of UAE and Spain to project West Bengal as an attractive destination for investments. The former finance minister of the state Amit Mitra used to be the Secretary General of FICCI and made many efforts to persuade India Inc to bet on West Bengal. Alas, it doesn’t seem to be working.

The Reserve Bank of India recently released a report that provides a state-wise breakdown of actual bank credit-backed committed investments going to states in 2022. West Bengal received Rs 3,500 crores. Odisha received Rs 35,000 crores. That just about sums it up.

Has the “political” success of Singur come at a very heavy “economic” price for the people of West Bengal? Political and economic analysts more knowledgeable than the authors can answer that question. More importantly, it is time for thought leaders, “bhadralok”, the political class and ordinary people of the state to introspect.

(Yashwant Deshmukh & Sutanu Guru work with CVoter Foundation. This is an opinion piece and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)

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