‘’Tata Motors has been constrained to suspend construction and commissioning work at the Nano plant in Singur in view of the continued confrontation and agitation at the site,'’ the statement said. ‘’This decision was taken in order to ensure the safety of its employees and contract labour, who have continued to be violently obstructed from reporting to work,'’ it said. While the Rs 1 lakh car may yet survive this upheaval, the Tata pullout could signal the end of the road for West Bengal chief minister Buddhadeb Bhattacharjee’s ambitious industrial revival plan. Bhattacharjee had hoped that saving the Rs 1,500-crore Nano project might alter his state’s image of being hostile to industry.

The Tata statement said, ‘’In view of the current situation, the company is evaluating alternate options for manufacturing the Nano car at other company facilities and a detailed plan to relocate the plant and machinery to an alternate site is under preparation.'’ Last month, Ratan Tata had said he would rather pull out of Singur than expose his staff and machinery to attacks.

State land ceiling laws typically allow a single corporate entity to acquire at the most 25 acres, although some states have set a cap as low as 5 acres. So, in the case of a state with a 25-acre cap, a company developing an SEZ of 10,000 acre would need to form at least 400 subsidiaries. Consultants advising developers note that this is commonplace with most SEZs. Although some states like Maharashtra adopt a more liberal policy, providing land ceiling exemptions based on the Centre’s in-principle approval to an SEZ project, others like Karnataka, Haryana and Uttar Pradesh insist on formal consent from the board of approvals for SEZs at the Centre.

But formal approval is granted only after an SEZ developer manages to buy the entire land for the project without any legal encumbrances. This, in effect, means the developer has no option but to buy the land first, subject to state ceilings. This could be one of the reasons behind Karnataka being home to smaller SEZs in comparison with Maharashtra. The biggest in Karnataka so far is the 259-hectare engineering SEZ of Suzlon Infrastructure Ltd. In Maharashtra, the largest is the 1,224-hectare multi-product SEZ of Mukesh Ambani’s Navi Mumbai SEZ Pvt Ltd. Overall, Maharashtra has 95 formally approved SEZs while Karnataka has 48.

Some states like Punjab and Tamil Nadu have a single-window clearance system, by which a developer can sign an MoU with the state and obtain exemption from the land ceiling. Gujarat and Andhra Pradesh, on the other hand, exempt developers from such state land acquisition caps altogether. Gujarat has 45 formal approvals for SEZs, while Andhra has 94. Not surprisingly, the distribution of large SEZs reflects the relative stringency on land acquisition.

Mr. T V Mohandas Pai, Infosys HR Director stated that their campus at Sitapura near Jaipur has been operable since August 2006 and seen an investment of around Rs 22.77 crore with a capacity of 890 staff. The Sitapura BPO made revenue of USD 15 million, Pai said. He also said that there was a requirement for thousands of more IT grads in Rajasthan for BPO and other IT segment jobs in SEZ and the state got a smaller amount of engineering colleges as compared to South India.

In West Bengal, the Tata project became a victim of a tussle between the CPI (M) leadership and the Trinamool Congress. For state chief minister and CPI(M), the Nano project could be a symbol of the new-found spirit of industrialisation in the state, which has over the years lost out to the new hubs of corporate excellence such as Bangalore and Hyderabad. While it could be an icon for industrialisation for Mr Bhattacharjee, for Trinamool’s Mamata Banerjee, it has been a do-or-die battle for getting goodwill of the farmers who were given a raw deal while taking away their farm land. The situation may improve now, if the state government comes out with a better compensation package for the displaced farmers.

Whereas an Act on resettlement and rehabilitation (R&R), which is to be tabled during the coming session of Parliament, will settle many issues on land acquisition, the government, in fact, has done a fairly good job in facilitating India Inc to set up over 500 SEZs (Special Economic Zone) in the country for which large-scale land acquisition was a must. The man behind the process, commerce secretary G K Pillai says it was made very clear in case of SEZs that there will be no compulsory land acquisition. “If one farmer in the middle of the acquired land objects to the acquisition process, we won’t notify that SEZ. There is no land dispute in any of 513 SEZs which have been formally approved. For the last one year or so, there has been no problem regarding land acquisition in SEZs,” he claims.

However, Singur project has been iconic in nature, and that’s why corporate bigwigs ranging from Reliance Industries chairman Mukesh Ambani to Bharti chief Sunil Bharti Mittal have extended support to Ratan Tata. Says a Tata Motor spokesperson, “We really welcome the support that industrialists across the country have shown for us. It just goes on to show that an investment of this nature is of paramount importance since it generates tremendous direct and indirect employment. On the ground, we are still hopeful about Singur and trying our best to solve the problem.”

The location of the SEZ is ideal for Metal Industries as it as close proximity to the Iron ore belt of Goa. There are many foundries close to the SEZ location. Looking at the project as a huge opportunity for growth, they are willing to set up their units at the SEZ location as Export Oriented Units.

In the last three months more than Rs 16,000 crore of investments in SEZs has been announced by various firms. Ansal Properties & Infrastructure Ltd is investing about Rs 3,600 crore for IT SEZs across three states. Infrastructure Leasing & Financial Services has tied up with Maharashtra Industrial Development Corp (MIDC), to invest up to Rs 8,000 crore in SEZs in the state. The state-run trading firm, MMTC Ltd, has invited bids to set up SEZs in various sectors. Tata Realty & Infrastructure, in a joint venture with the Tamil Nadu government, has committed to investing more than Rs 3,000 crore to build an IT SEZ. “The benefits and revenues far outweigh the issues involved,” said Mr Rajiv Jalota, chief executive officer, MIDC, which is developing 22 SEZs in Maharashtra. The body has faced opposition to land acquisition in the state and has now set up a dedicated cell to compensate and rehabilitate displaced landowners.

In January, the tourist state of Goa dropped plans to build SEZs after protests from political and environmental groups, and in 2007, forced farmland acquisition in Nandigram provoked violent protests leading to deaths in West Bengal. Since then, forcible land acquisitions have been barred. “The ministry of commerce is very clear. No land can be forcibly acquired for SEZs,” said Mr Pillai.

When asked to comment on the amount of pressure, the growing number of SEZs will put on the limited agricultural land, Mr Raheja asserted that it is not SEZs, but low productivity of agricultural produce, that is an obstacle in the country’s pursuit of producing sufficient food grains. This project is expected to create job opportunities for around 50,000 people.

Meanwhile, MIDC has launched its plan to acquire as many as 1 lakh acres of land across the state. Of the one lakh acres, 70,000 acres will be for the industrial purpose while the balance 30,000 acres for SEZs. Deshmukh also mentioned about the opposition from various quarters for the land acquisition for SEZ projects and thus reiterated that the land acquisition will be carried out through mutual understanding and negotiations. He informed that the Centre has approved 131 SEZs so far in the state and of which 35 are already notified. State-run Maharashtra Industrial Development Corporation (MIDC) is developing nearly 21 SEZs while the rest is developed either by private sector or in joint venture.

“The state SEZ Law provides slew of incentives to the project developers, which includes exemption in stamp duty, VAT and electricity duty. The developers will be provided a deemed license status for the electricity distribution. He however, advised the SEZ project developers to carve out a comprehensive rehabilitation package for the farmers and landowners. Infact, he also asked the developers to replicate the rehabilitation package prepared by MIDC.