On September 02, a two judge bench of the Supreme Court delivered a much awaited judgment on the Singur land acquisition case. Calling the then Left led state government’s acquisition of 900 acres of land for Tata’s Nano plant a “colorable exercise of power and a fraud on the people”, the judges have ordered that all the land be returned to the owners within 12 weeks.
Here is a comprehensive timeline of events beginning from Ratan Tata’s announcement of the small car project in May 2006 followed by protests and resistance by farmers who alleged forcible acquisition in December of the same year when Trinamool Congress leader Mamata Banerjee went on an indefinite hunger strike in support of their struggle.
It has been a decade since images of the violence in Singur, and later Nandigram, haunted us but for many of those affected, most of them small farmers and agricultural workers, the verdict is a victory.
The judgment has been scathing in its vindication of the CPM led Left government pointing to lapses in several procedures that ought to have been undertaken as per the Land Acquisition Act.
This report in quotes the relevant part of the judgment – State government is required to apply mind to the report of the collector and take the final decision on the objections filed by the landowners and other interested persons. Then and then only, a declaration can be made under Section 6(1) of the Land Acquisition Act, 1894 (L.A. Act).
In this case there seems to be no application of mind either at the stage of issuance of the notification under Section 4 of the L.A. Act, or the report of collector under Section 5-A (2) of the L.A. Act or the issuance of the final notification under Section 6 of the L.A. Act. While Section 4 of the Act required a notice to be published in the gazette that land is to be acquired, Section 5-A (2) allows those interested in the land to give objections in writing to the collector and requires the government to take note of the same.
Quoting from the petitions of the Association for Protection of Democratic Rights and others who opposed the land acquisition, this report in the First Post says elaborates on the contentions of the farmers and those who lost their lands – Acquisition of the Singur land for public purpose and then handing it over to Tata Motors for its Nano project was illegal and in breach of land acquisition law. The association had told the court that there was a separate procedure under the land acquisition law for acquiring land for a project of a private company, and that the land acquired by the government for public purposes could be given to a private company only for constructing dwelling units of the workers employed with it and no other purpose.
However, this report by Krishnadas Rajagopal points out that the two judges differed on whether the land acquired could qualify as public purpose. While Justice Gowda felt that the acquisition “For and at the instance of the company was sought to be disguised as acquisition of land for ‘public purpose’ in order to circumvent compliance with the mandatory provisions of the Land Acquisition Act’, Justice Mishra differed.
Small car industry would have “ultimately benefited” the people and the very purpose of industrialization. The factory would have opened up job opportunities in the State and attracted investment. Regarding procedural issues too, the bench was divided. While Justice Gowda said that individual notices ought to have been issued, Justice Mishra felt that a common gazette notification sufficed.
Despite these differences, the judgment has sent out a strong message about (communist scheme) development at the cost of the poor – In this day and age of fast paced development, it is completely understandable for the state government to want to acquire lands to set up industrial units.
What, however, cannot be lost sight of is the fact that when the brunt of this ‘development’ is borne by the weakest sections of the society, more so, poor agricultural laborers who have no means of raising a voice against the action of the mighty state government.
Rise of Mamata Banerjee
For too long the Congress party that had lost power to communists decades ago tried to wrestle it back but failed. Now a former Congress leader and central minister Mamata Banerjee with her own Congress faction called Trinamool Party has come p to power replacing a formidable Left dispensation as Bengalese rejected Communist opportunism and betrayal. In a way, the foolish communist leaders in the state promoted him imminent arrival of Mamata Banerjee as a historic phenomenon. .
Chief Minister of West Bengal, Mamata Banerjee’s ascent to power in the state, after ousting the Left, had much to do with the struggle in Singur. Banerjee relentlessly protested the “communist” acquisition of the land while firmly asserting that her party was not anti-industry and the 400 acres of land belonging to the ‘unwilling farmers’ should be returned to them. Her “Save Farmland” movement was supported by various environmental activists and intellectuals.
The ruling Trinamool Congress is celebrating and understandably so, because the court has also ruled that the farmers who have received compensation need not return it as they have been deprived of their livelihood for the last decade. In fact, soon after the TMC came to power, Singur Land and Rehabilitation Bill was enacted.
A case testing the constitutional validity of this law, while still pending before the Supreme Court is likely to become “fructuous” given the present judgment. The Tatas, who shifted shop to Gujarat in 2008, cited this reason to remain mute on the subject.
Deception and lose of brains
There is a possibility that Tata Motors could sue the state government for breach of contract. The company issued a statement to that effect. “Political parties may change but the government is a continuity. The company willingly gambled and took lease of the illegal land in good faith. But it now is clear that they were given a bad land title. The company may seek compensation on that ground that the company had valued its loss at Rs.1400 crores (their petition to the Calcutta High Court in 2011).
India Inc however has been more cautious in their reactions. The Singur verdict will not impact the potential of the State in attracting investment. This is, of course, the official statement. Privately, a prominent industrialist pointed out that the Tata Nano episode already served a major blow to the investment potential and there is nothing more to lose.
The relocation took place at a time when Bengal was in the spotlight of investors in India and abroad, seeking investments in the state with lucrative promises to willing investors. . . It also pressed the pause button on Bengal’s dream to emerge as an auto hub. The same article also asserts that the biggest loser, politically, is the CPM. CPI (M)’s vote and seat share is declining at an alarming rate since the 2009 general election.
Efforts to revive the industrialization agenda in the 2016 Assembly election failed miserably. What’s more, post-election they are losing elected representatives to Trinamool.
The CPI(M)’s reaction to the verdict is simple as it is not opposed to the decision of returning land to farmers but had contested her (Mamata’s) 2011 move on some technical loopholes. “Today’s verdict has not answered questions on the legality of the Singur legislation her government had brought, which is what we were opposed to.”
The BJP which lost its chances once for all in the state with Mamata’s arrival, was quick to point out the Left’s double speak. Siddharth Nath Singh, BJP leader in the state, has been quoted saying – The Left opposed our central government’s land acquisition Bill. It said land should be acquired only for public purpose, but in Singur its government had acquired it for a private purpose to promote Tata Company. So, the Left must explain”.
JD United leader Shyam Rajak said that the judgment sends a strong message to the Centre which has been enacting anti people policies. “We welcome the decision of the Supreme Court. This was a fight for the rights of the poor. This decision will ensure that the farmers retain their livelihood. I hope the verdict will send out a positive signal. There are lots of cases – be it Narmada Andolan, or be it about Tehri dam issue which has been fighting for the cause of the poor. The SC should also review these cases as well”.
Not only the left parties but also the Congress and BJP that get plenty of lose findings form corporate lords are worried that their multinational corporate beneficiaries are not happy.
Honoring concerns of common folk
Ever since independence in 1947, Indian rulers, Congress, BJP, others have been relentlessly pampering corporate lords and rich classes to get bribes from them. This has badly affected the fortunes of common people, Muslims suffering the worst. .
Left government West Bengal just took people for granted and launched grand capitalist agenda by looting the agricultural lands for the purposes of increasing surplus values of corporate lords against basics communist pimples. That cost very dearly for the communist parties in the state as they lost the general polls, both parliament and state assembly- to a new Trinamool party of dynamic Mamata Banerjee.
People of India, through the people of Singur have won a great battle against illegal transaction over farmers’ lands and subsequent forceful occupation and exposed communist movement in the country as a false and pretentious one to exploit the weak sections of the nation in their favor.
Supreme Court order, a huge though belated victory and vindication for the courageous peasants of Singur against corporate land grab, should serve as final warning to leftist parties in India to pursue only people’s concerns and not to help promote capitalist agenda primarily because left parties are supposed to be anti-capitalism and fight for the common people and their genuine requirements. They should if required read Marx who wrote in volumes about surplus values.
Nano judgment against government’s immoral dead with capitalists is yet another feather in the Apex Court’s jurisprudence and will go a long in strengthening the power of common people in Indian political arrangement.
Bangladesh’s Graduation: A Ray of Hope for India’s Garment Industry?
Authors: Ms. Prerana Manral and Mr. Shreyansh Singh*
A report was released by the World Trade Organization (WTO) on May 8th highlighting the implications of graduation of Least Developed Countries (LDCs) on their trade participation. By virtue of their status as LDCs, these countries enjoy access to international support measures such as development financing, preferential market access, technical assistance etc. WTO also obliges LDCs with certain carve outs such as Special and Differential Treatment (S&DT) to increase their participation in global trade. The LDCs are graduated to developing country status if they meet the threshold levels for at least two of the three indicators i.e. Gross National Income (GNI), Human Assets Index (HAI) and Economic Vulnerability Index (EVI) for two consecutive triennial reviews. Interestingly, in 2018 Bangladesh became the first country to meet the thresholds for all the three indicators and if it meets these thresholds again for the second triennial review in 2021, it will be eligible for graduation in 2024.
In such a scenario, Bangladesh will lose some of the benefits provided to LDCs by developing and developed countries like the preferential market access which presently accords Bangladesh a competitive edge over Indian products. One of the key labor-intensive sectors which contributes significantly to the exports of both Bangladesh and India is garments industry. In 2009, both the countries almost had an equivalent share in the world market, however in 2018 India was left far behind Bangladesh. India’s total garment exports stood at 21 billion USD whereas Bangladesh’s exports were at 40 billion USD in 2018.
Bangladesh’s garment sector, due to its LDC status, currently enjoys a duty-free access to markets of Europe and other developed countries. Specifically in EU markets, goods from Bangladesh are covered under “Everything But Arms” (EBA) preferential arrangement which provides zero percent duty on all the products except arms and ammunition. On the other hand, India loses out due to 9% average tariff on garments under the Standard GSP scheme of EU. Further, under the SAFTA and APTA Agreements, India also provides similar duty-free market access to LDCs which along with the removal of quantitative restrictions has exponentially increased Bangladesh’s garments exports to India leading to a tough time for the domestic industry even in the internal market.
The major markets for India and Bangladesh garment exports are the EU, Australia, Canada and Japan. Trade estimates of garment products clearly show that India’s export in terms of value is significantly less than that of Bangladesh. Since 2010, India’s total share of exports grew by 9.4% whereas Bangladesh’s exports skyrocketed by 141% in these markets. The major reasons behind Bangladesh’s exemplary export performance are tariff exemptions and lower wage labor market which provides impetus to narrowly beat its competitors in the international market. The analysis done in the report reveals that 70% of Bangladesh’s overall export is covered under LDC-specific preferences.
At this juncture a possible graduation of Bangladesh will lead to termination of such preferential access granted exclusively to LDCs which may provide an opportunity for Indian exporters to grab a larger share. However, to maximize the gains arising from this development India needs to prepare a robust action-plan. Firstly, low cost inputs such as cheap power, land and raw materials will have far-reaching effects in enhancing the export competitiveness. Secondly, India should focus on mass scale production of garments in order to achieve economies of scale to bring down its cost of production. Presently, the production is limited majorly to small-scale enterprises which lack capital intensive technology. This in turn negatively affects the quality and time of production which are crucial factors in tapping the domestic and international markets. The improvement in these parameters would help Indian exporters to move up the value chain in terms of creating brand value for its superior quality products. Another overdue policy action could be cutting the import duties on high-quality machinery required for better production. In addition to this, a fiscal stimulus is required to boost the ecosystem in wake of Covid-19 pandemic.
Lastly, to offset the preferential access enjoyed by its competitors such as Vietnam, Bangladesh etc. India should identify its partners and strategically negotiate FTAs for lower tariffs and Non-Tariff Measures (NTMs) to obtain better market access for Indian exports. Needless to mention, India will only be able to reap the benefits arising from Bangladesh’s graduation (due in 2024) if it sows the right seeds today. Effectuating such policies especially at a time when corporate taxes are slashed to match that of India’s competitors along will definitely send a positive signal for investment in the sector from the top global garment companies.
*Authors are Research Fellows at Centre for WTO Studies, Indian Institute for Foreign Trade. Views expressed are personal.
Post-Pandemic Economies and Environment
The cleaner air in cities, the burgeoning biodiversity and dramatic shift to less pollution-intensive lifestyle across the globe indicate the scope of the environmental improvement that can be achieved in just days. This is what we need to adhere to navigate the current pandemics:COVID-19 and environmental degradation. The environmental issues as we know do not seem to wait for a more convenient time, we therefore must deal it and Covid-19 pandemic concurrently. It is a very fatal disease and has incited urgent response all over the world. The governments, businesses and industries have been forced to deal with the pandemic in an unprecedented way.
According to the experts, this pandemic has provided us with the opportunities to deal with other crises also. We can take a transnational leap towards a sustainable society that produce minimum wastes and emissions. How we deal with current pandemic will also set our environmental trajectory for the centuries to come. The changes in our behaviour that we are experiencing nowadays and some of which may instilus permanently have a far-reaching impact on the environment. Our consumption and travel patron are more responsible: driving less car, attending online meetings rather than taking flights. Equally, it indicates that considerable dent on emissions and wastes products can be made without disturbing too much economic growth.
However, according to International Renewable News Agency (IRENA), for the long-run substantial reduction in the emissions of the toxins, huge and lasting changes are needed in the way how energy is produced and consumed. Though China and India two major growing economies, observed 25% and 30% reduction respectively during the months of lockdown. However, a shift towards low-emission society cannot be accomplished only via individual choices instead it involves reimagining the ways our urbane centres are built and organised, how roads are laid out so that moving without cars become easier, how provisions for walking, cycling and public transport is mad. There is a need for complete overhauling theway we grow, manufacture, trade, consumes and the way we travel.
Cities of Western Europe have been leading this transition by introducing innovative infrastructure projects: Milan has allocated 35 Km street for pedestrians and cyclists; Brussels has created 40km of a new path for cyclists and France has subsided cycling. Also, the Mayor of London started taking measures to build a car and buses free streets and bridges. Similarly, many cities are working on the circular economy where wastes are minimized through reuse and recycling. Following the footsteps of these cities, Pakistan also needs to devise pro-environmental urbane policies and mobility models.
Many studies such asYaron Ogen, 220 and Dario Caro, 220 indicate a strong link between COVID-19 death rate and an increase in emissions. Especially in North Italy and Spain, the high death rate from COVID-19 is seen to be associated with high air pollution in cities. Curtailing the pollution, therefore, would reduce general health burden and prevent any future pandemic may not prove to be so lethal. It has been learnt from the pandemic that early actions to contain the virus were more effective than trying to deter when the virus has spread. The same is also true for the environmental issues as Prof. Stern of Brentford claimed in 2006 that “countries needed to spend 1% of their GDP to stop greenhouse gases rising to dangerous levels. Failure to do this would lead to damage costing much more, the report warned – at least 5% and perhaps more than 20% of global GDP”.
Eventually, it is time for governments to forge with the private sectors to produce a sustainable economy. After this pandemic is over, the businesses, the industry, and individuals would plead to governments for state support. The governments should have an agenda of a sustainable economy while pouring money into the economy as aid packages. Governments should use this opportunity and must take a long view to utilize the stimulus packages. To an extent, the impact of COVID-19 on the environment is the functions of a kind of fiscal stimulus will be adopted in post-pandemic. Ideally, we should avoid a post-2008-09 financial crisis when fiscal measures of China government boosted the emissions by 6% (World Bank,2020). Rather, a more successful model of South Korea should be borrowed where stimulus package of 2008 included investment in natural conversation, energy efficiency, renewable energies, and sustainable transportations.
The COVID-19 virus is a global issue that requires a global response asall states are sharing data, experiences, equipment, and resources to deal with this pandemic. This same spirit of international collaboration is needed to produce the viable solution of the environmental issues. An inclusive global programme collaborated by rich and poor nations that ensures sustainable production can ensure low-emissions economies across the globe. The post-pandemic economies should be navigated in a way that protects people and planet and avoids any ecological destruction that leads to viral diseases. This pandemic can be taken as a mandate to build a new world from its broken parts.
Long lockdowns and the status of Indian MSMEs
Recently, when the Government of India decided to classify institutions as Micro, Small, and Medium Enterprises (MSMEs) they were trying to set up an incentive structure to usher a new era of growth. The incentives announced are in the form of attractive cheap loans, fewer compliance standards, tax benefits, and host of other freebies. The intended scheme wanted to keep growing — from Micro to Small and Small to Medium, and the support system and put the nation on a path of self-sufficiency .
Change of classification criteria
In fact, the businesses are classified as Micro, Small, or Medium depending on the kind of investments they were making in plant and machinery and if we made investments of up to 5 Crore, then we are as a Small enterprise. But what happens when business is booming and there’s an incentive for us to invest and expand. Well, without government intervention, we’d have lapped up this opportunity no questions asked. But now, we have to consider the downside. Because, as our transition from being Small to Medium, we’ll forego a few benefits. Benefits that might not want to cede. Here likes the dilemma because when we try and deceive the government into thinking we are a Small enterprise when in fact we are not and we will have to do is to keep making the investments we need, but figure out ways to hide the investments on our accounting books. That means the government will now have to spend additional resources in physically verifying your claims. In effect, the incentives that were designed to help MSMEs grow and become self-sufficient have now turned “perverse”. A move that was meant to promote investment and foster growth is now yielding terrible unintended consequences stifling all progress.
Scheme of the Government
So they began working on a proposal to change the classification criteria. They figured that total revenues would be a good metric since claims regarding revenue can easily be verified with the GST Sales data filed at the Goods and Service Tax portal. More importantly, entrepreneurs won’t have to worry about making new investments since the benefits are no longer tied to this metric. But the industry body representing MSEMs is not happy with this development. They lobbied and urged the government to keep the classification criteria intact but when the government finally charged ahead and introduced turnover as an additional criterion. They even expanded the investment limit to ensure MSMEs don’t graduate out of benefits too soon. However, MSMEs in the service sector (IT and stuff) will also be classified along the same lines as their manufacturing counterparts. So no step-motherly treatment for the people in the service industry either. Besides the classification, the government also wants to get the big guns interested in the space. They want Venture Capitalists to walk in and buy ownership in promising upstarts. The plan is simple. Put together a mother fund with 10,000 crores from the government. And then disburse the funds from the mother entity to smaller daughter funds in a piecemeal fashion and try and get other investors on-board these smaller funds. If all goes well, the 10,000 crores from the government should attract an additional 40,000 crores from outside investors (PE/VCs) and this should give MSMEs some much-needed funding support. They are calling it the Fund of Funds.
However, in the present status of pandemic banks don’t want to offer another lifeline by extending new loans considering their own precarious situation. And they most certainly cannot contain the problem; since we are likely to see a spike in defaults owing to the fact that most MSMEs have shut shop completely since the lockdown. And if MSMEs can’t restart operations and fail en masse, we will have a systemic problem on our hands. So a government intervention was inevitable. And the finance minister finally announced 3 lakh crore worth of collateral—free loans for businesses, including MSMEs in a bid to plug the funding gap. If we are in a business with a loan burden on your hands, banks will now extend new loans of up to 20% of the total loan outstanding so that we can restart operations. Now, we’ll have 4 years to repay this loan. Repayment obligations won’t kick in until the end of the first year. The government will stand as our guarantor in case we default and they will compensate the banks in full interest and principal. So technically, banks should be more willing to lend to these institutions now.
Growing importance of agriculture
Around 51 lakh people migrated to agriculture last year and this should be seen positively. In fact, we should actively pursue this endeavour and focus on making farming economically viable. Indian Agriculture, on an aggregate level, has been unprofitable for a good while now. Monsoons are erratic. Irrigation infrastructure still needs work. Warehousing and storage problems still persist. The middlemen skim most of the profit and many farmers work with land parcels so tiny that they can almost never leverage benefits of scale. Meaning we have a small proportion of landowners who run an extremely profitable enterprise while a good chunk of the agrarian population still live below the poverty line. The point is — there’s been very little incentive for people to continue and work the farmland. And as a consequence, many people migrated from rural hinterlands to urban centres en masse.
But now in the pandemic and long lockdown the migration patterns have reversed. There’s now more incentive for India’s labour population to return to agriculture. It’s become prosperous again. First, it is likely that employment did not actually increase in agriculture, but the sector merely absorbed the excess labour as it had no other place to go to. Farmers did not actually call out for more labour. But, family labour landed up in farms when they had no other place to go to. The real estate and construction sector, which is usually a provider of employment to low-skilled farm labourers who try to move out of the labour surplus farmlands, shed 4.6 million jobs between January-April 2018 and January-April 2019. This failure of the construction industry to absorb farm surplus labour is, possibly, the biggest reason why there is an increase in employment under agriculture. A family farm always has scope to absorb some unpaid labour although such additions may not increase any production or profit. There is always an extra patch of the farms to tend to or the need to take the cattle to graze a little farther. Farm work can be spread thinly over available labour and keep everyone “employed” when there is no alternate work available to them.And right now, with the lockdown in place, we are seeing it happen again. People are moving back to agriculture en masse because they have nowhere else to go. The only difference—it’s happening at a scale that almost seems unreal. This migration also has some very real policy implications.
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