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RUEHCI/AMCONSUL KOLKATA 2625

UNCLAS SECTION 01 OF 02 KOLKATA 000275 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EINV ELTN EIND IN
SUBJECT: THE POLITICS OF SINGUR 
 
REF: KOLKATA 160 
 
KOLKATA 00000275  001.2 OF 002 
 
 
¶1. (SBU) Summary: The conflict in Singur over land acquisition 
for the new Tata Motors Nano automobile factory has been the 
theater on which the ruling Communist Party of India - Marxist 
(CPM) and West Bengal's primary opposition party Trinamul 
Congress Party (TMC) have staged their latest epic battle. 
Despite historic talks mediated for the first time by a state 
Governor and threats of West Bengal losing the world famous Tata 
Nano plant, the CPM and TMC appear to both be set on being the 
winner of this conflict rather than accepting a political tie. 
With national elections coming in the New Year, Singur-like 
conflicts are likely to continue in West Bengal.  If CPM and TMC 
leaders are not careful, there will be no winner from these 
destructive battles and, the loser will most likely be the West 
Bengal economy.  End summary. 
 
Background on Singur Impasse 
 
¶2. (U) The two and one-half year-old Singur crisis is centered 
on the CPM-led Government of West Bengal's (GOWB) acquisition of 
land for Tata's famous Nano car.  According to post contacts, 
when the GOWB granted land concessions to Tata, it believed it 
was strong enough to offer land and generous incentives to 
corporations without any political opposition.  The GOWB was 
therefore surprised when the speed and lack of transparency in 
the land acquisition process prompted a backlash among farmers 
in the area who were unwilling to sell their land.  The TMC, a 
regional opposition party led by fire-brand Mamata Banerjee, 
took up the cause of the farmers and has led a series of 
protests against the land acquisition, mainly in Nandigram and 
Singur.  As a result of protests in Singur, Tata Motors has 
ceased construction work on its Nano factory until protests over 
land acquisitions are ended. 
 
¶3. (U) After Tata announced the possibility of pulling out of 
Singur and with no prospect of CPM and TMC finding a compromise 
that met Tata's requirements, West Bengal Governor Gopalkrishna 
Gandhi agreed to mediate talks between the two parties.  This is 
the first time in Indian history that a state governor has 
mediated a political conflict of this kind.  The grandson of 
Mahatma Gandhi, Gopalkrishna Gandhi commands considerable 
respect in West Bengal.  Gandhi hosted Chief Minister Buddadeb 
Bhattarchee and Banerjee at the Governors Mansion on September 7 
and they hammered out a vague arrangement known as the "Sunday 
Agreement," which ended TMC's siege of Singur pending a final 
settlement for the farmers. 
 
¶4. (U) Soon after the "Sunday Agreement" was reached, TMC and 
CPM announced conflicting understandings of what had been 
decided.  TMC continued to demand that no less than 300 acres 
inside of the Tata project zone plus an additional 100 acres 
outside of the zone be returned to the farmers.  TMC also 
demanded additional cash compensation for the farmers.  The GOWB 
offered 70 acres within the project zone, unspecified alternate 
land outside of the project zone and a 50 percent cash premium 
over the original acquisition price to all of the affected 
farmers.  The GOWB also offered an additional 10 percent premium 
to farmers if they accepted the deal by September 22.  The GOWB 
guaranteed one job per family if a family member failed to find 
a job with a private sector company associated with the project. 
 With no agreement in site, TMC has called for renewed protests 
on September 25. 
 
Singur vs. Nandigram 
 
¶5. (U) There have been numerous comparisons between the current 
Singur situation with the previous land acquisition furor in 
Nandigram, where an outpouring of violence led to the deaths of 
14 people at the hands of police.  However, there are 
significantly different socio-economic dynamics that play into 
the political calculus.  Nandigram is 60 percent Muslim; 
literacy is very low; it has no industrial base of which to 
speak; and it is a rural area far from large urban centers such 
as Kolkata.  In this social environment, heavy-handed land 
seizure by the GOWB without consulting the local population and 
without transparency was met with severe resentment, ultimately 
enabling TMC to score major gains in local elections. 
 
¶6. (U) Conversely, Singur is geographically much closer to 
Kolkata; it has an industrial history (Hindustan Motors 
manufactures the Ambassador automobile in nearby Hooghly 
district); the Muslim population is significantly lower (25 
percent); literacy rates are higher; and the local population is 
much more receptive to industrial development.  As a result, 80 
percent of the roughly 10,000 landowners willingly accepted the 
GOWB's initial offer in Singur, despite the speed and lack of 
transparency of the transaction.  In contrast to Nandigram, the 
GOWB has not used force to remove protestors despite the closer 
 
KOLKATA 00000275  002.2 OF 002 
 
 
of a national highway and the inability of Tata workers to the 
worksite. 
 
TMC: A Formidable Challenger 
 
¶7. (SBU) Through the force of Mamata Banerjee's personality, TMC 
has become the principal opposition party in West Bengal, 
winning a significant number of seats in the local panchayat 
elections in May 2008 (see reftel).  Political analysts describe 
Banerjee as autocratic, eccentric, mercurial, and not 
particularly well suited for coalition politics.  While Banerjee 
claims she has no political goals beyond her current seat in 
Parliament, a senior TMC member confirmed to CG what is widely 
believed -- that Banerjee wants to be Chief Minister of West 
Bengal. 
 
¶8. (SBU) TMC has a long way to go, however, before it can topple 
CPM's decade's long hold on power in West Bengal.  In the last 
state assembly elections in 2006, TMC garnered roughly 21 
percent of the vote compared with the CPM's 51 percent.  The 
remaining votes were split as follows: Congress 15 percent; BJP 
8 percent; and all others 5 percent.  Officially, the TMC is 
part of the National Democratic Alliance (NDA) which is led by 
BJP.  Unofficially, the TMC has been operating alone and has 
made no public appearances with BJP in several years.  According 
to post contacts, Banerjee has avoided allying herself with BJP 
for fear of losing the Muslim vote, particularly since 
Banerjee's constituency was recently redrawn to include an 
additional 30,000 Muslims.  While TMC is closer ideologically to 
the Congress Party, it had not joined the United Progressive 
Alliance (UPA) because the CPM had been a UPA ally.  Even though 
CPM has now left the UPA, contacts tell post that Banerjee is 
hesitant to partner with the Congress Party because of tensions 
created by Banerjee's split from Congress in 1998 and the fact 
that both parties target essentially the same voter groups. 
 
¶9.  (SBU) In the Singur standoff, Banerjee has proven to be a 
shrewd politician.  She entered into talks with the CPM only 
after public opinion shifted against TMC after Tata's 
announcement that it might abandon its Nano factory in Singur. 
According to post contacts, Banerjee sensed that the TMC would 
be blamed if Tata leaves West Bengal and quickly made 
pro-industry and pro-development comments in an appeal to both 
rural and urban constituencies.  This shift in approach appears 
to have worked, with Banerjee once again being portrayed as a 
champion of the people. 
 
CPM: Confused by Strong Opposition 
 
¶10. (SBU) According to post contacts, the CPM is finding it 
difficult to respond to TMC's challenge of CPM's decades-long 
hold on power in West Bengal.  Land acquisition has become the 
field in which this struggle for power is playing out. 
Initially, Nirupam Sen represented the CPM in talks with TMC. 
Sen, an ally of Prakash Karat (the General Secretary and head of 
the national CPM), took a hard line stance against all TMC 
demands.  However, after the "Sunday Agreement," Sen disappeared 
from the negotiations and was replaced by Minister of Housing 
Gautam Deb, a former aide of 94-year old former Chief Minister 
Jyoti Basu.  (Note: Basu still wields substantial political 
influence within the CPM and is Buddadeb Bhattarchee's mentor. 
End note.)  In his capacity as Housing Minister, Deb has 
extensive experience in structuring land acquisitions and is 
believed to be the chief architect of the CPM's latest offer to 
TMC. 
 
Comment 
 
¶11. (SBU) TMC is clearly gaining support in the battle over 
Singur; but if the conflict is not settled soon and Tata pulls 
its Nano plant out of West Bengal, Banerjee will most likely 
find her hard earned successes slip away.  If she is able to win 
concessions from the GOWB for local farmers, Banerjee will 
solidify her image as the defender of West Bengal's politically 
influential small farmers, for whom land ownership has been a 
cultural symbol of social and economic status.  Still, TMC will 
need to ally with other opposition parties to topple CPM's hold 
on power and Banerjee's track record for coalition building is 
weak.  TMC will also have to overcome doubts about its readiness 
to govern, given that it has no economic plan of its own and no 
organizational infrastructure. 
PAYNE