Some of the development practitioners seemed to be unhappy about the exit of TATA from the much-hyped "nano" project from West Bengal. They have a point as apparently, this means that the state lost some employment opportunities. This may also deter other industrialists to invest in projects which require large-scale land acquisition. Having said this, I want to draw attention to some pertinent issues with regard to the "industrialisation" model adopted by the governments of various states in India.
Everybody understands that "development" means the process of transition from "agrarian state" to "industrial" economy. But the debate continues throughout the world about the strategies to be adopted for this transition. Of late, there is a growing consensus, even among the "free-trade" economists that industrialisation can not be carried out at the loss of total societal human welfare. We can not allow the entrepreneurs to set up big industries without any prior scientific assessment of the implications of the proposed industry on the society and people at large. For example, there is a need to carry-out a cost-benefit analysis before setting up an industry which displaces thousands of people, acquires multi-cropping land and thereby threatens the livelihood of lacs of people living in the region (it is to be noted that no such study was conducted in case of the proposed "nano" plant in Singur). Apart from this direct costs, evidence from many studies point to the severe negative impacts of the invisible "indirect costs" associated with this kind of projects. Since these costs are invisible, they go unnoticed and the media, state machineries, especially the judiciary make sure that the exact nature of these costs remain under the carpet so that the industrial houses and their puppet government can remain secure from the people's ire. Some development "champions" are panicked because they see the capital is flocking out from West Bengal to Gujarat and media is quick to label "West Bengal" as loser and "Gujarat" as gainer. However, they don't see (or don't want to see) that this is West Bengal's victory as the farmers could foil another attempt of state and industrial houses' to rob the state exchequer and the poor people's money.
Unfortunately, there is a race to the bottom among the states and industrialists like TATA, Ambani, Bajaj, Mittal and numerous foreign MNCs are leaving no stone unturned to cash in this opportunity. No body wants to be left behind. The governments are thronging to TATA and others with sops that would be unmatched with the offers made by other competing parties though there is grwoing body of evidence that this downward harmonization (reduction of regulation, welfare, taxes and trade barriers) increase poverty. At one point of time, it was almost a stampede like situation as the various state governments were fighting to get the entry of "nano" into their respective states. Our Cambridge educated economist prime minister is so obsessed with the neo-liberal model of development that he promised to make an act regarding SEZ so that the industrialist don't face these unnecessary hassles in future in acquiring land for "development". I have no doubts in his words. He is very competent and would keep his promise before he leaves the office. If he can not do it, his bete-noir, respected Advaniji would definitely give this gift to the nation. After all, the "face of development", the strong-man of Gujarat has done it!
I think we have to assess the situation very objectively. We definitely need industrialisation but the appropriate model needs to be "fair", and "just" for all and which maximises the total welfare of the society. Time has come to think of alternative models of development.
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