Singur in Context: Capital flight or Flight of Fancy?


Comrade Budhadeb Bhattacharjee is a man in a hurry – he has to undo the pyrrhic victory of the labor-peasant movement in West Bengal: capital flight. He thought he got it fixed when he had the party and the government machinery close in on Singur, to evict people, erect a barricade and encircle the site. A technique developed in the bygone labor militancy days – gherao (encirclement) came in handy even in distancing oneself from its fruit! Who knew! There was perhaps a fleeting smile on his face, a sigh of relief as now that the site is secured, it is only a political matter of dealing with the Banerjees, Patkars and Roys. But pesky Tapasi Malik came along to ruin it all. The teenage daughter of one of the evicted landless workers strayed into the site at night to relieve herself and ended up as a smoldering corpse in a pit, the stench waking up her folks. Any sensible woman would have known better than to venture into such territory so there must be an explanation – other than the unlikely fact that she was just a teenager who was not very sensible. With 14 per cent of all crime in India being rape or dowry related, Indian policemen do not need any lessons in creative writing. So the wheels of imagination began to spin: Tapasi had slipped out of her home for an illicit rendezvous with a jealous lover and pick your choice: 1) she committed suicide shortly after 2) the jealous lover along with his drunken friends raped and murdered her.

This is not exactly a laughing matter anymore. History and geography are serious business and if we get one wrong we get the other wrong too. So lets get to the bottom of it. According to Comrade Budhadeb Bhattacharjee and his party, and oddly enough according to any number of economists and politicians of all ideological pursuasions, Bengal experienced a flight of capital ever since the Left Front came to power in 1977. The left and the right diverge from that point on: if you are on the left, Bengal survived by enhancing agricultural productivity, taking over sick industries and selling power to neighboring states while Kolkata itself languished in interminable power outages. If you are on the right, then Bengal drove out industries, indoctrinated youth and captured all key institutions. Both agree, with some important differences over specific details, however, that Kolkata must be restored to its past glory as an entrepot to investments and to surplus extraction. It must be the port through which it will all flow in and out as majestically as the Ganges. Implanting the Tata people’s car plant on the Singur farmlands is the latest in that direction. (Did I just say that? You are right. The Ganges only flows out. But of course, this is different. Things will also flow in here and it will be good for the entire Eastern India because we will have downstream vendors, and suppliers. Don’t ask me which way is downstream because it is really hard to tell these days.)

Let us not waste time on the disagreements between the left and the right and instead look at what the left and the right agree on – namely the self evident fact that capital fled Bengal because of labor militancy. The most astounding thing about this ‘fact’ is that it is as if it were happening in outerspace and had nothing at all to do with the politics and economics and history of India. Little seems to be the need to explain what exactly was this labor militancy about. Where did capital fly to? How did it fly? But since such questions require an intimate detailed knowledge of Bengal, let us start the story from some other place to at least locate this outer space object in some relation to other objects in space. The Communist Party of India-Marxist (CPIM) came to power in Bengal at a peculiar moment in India. It was when an all-round anti-Congressism based on an aversion to its flirtation with the authoritarian Brazilian path to development, and a frustration with the singular failure of national coalitions found expression through the rising regional bourgeoisie whatever that word means – mostly rich and middle farmers, government employees, contractors, professionals, small and medium industrialists and so on. The specific configurations of these regional formations varied from state to state depending on local agrarian histories and the implications of caste identities in successive rounds of modernization. If it called itself NT Rama Rao in Andhra Pradesh, it called itself Lalu Prasad Yadav in Bihar, it called itself Bhindranwale in Punjab just as it called itself Sharad Pawar in Maharashtra. This was truly a historic period in the Indian political economy. First and second generation sarkari employees were preparing to retire and look for avenues to invest their savings in the cities. Restless agrarian rich were moving into the cities. Some centrally owned public sector industries were slowly getting into trouble even as others especially in the electronics and communications sector began to thrive and supported a number of ancillaries. It was an economy in which older privately owned industries were getting into trouble because of technological outdatedness and changes in supply chains. In short in certain sectors industrialists were truly looking for labor trouble so they could legitimately pack up. What we know about these developments is mostly locked in the archives of area studies centers all over India with piles of MA, MPhil and PhD dissertations with microlevel local data.

Within this socio political dynamism in the state, the fight in Bengal as everywhere else was for regional autonomy, a freedom from the center – a process that Achin Vanaik described in a quaintly Newtonian metaphor: centrifugal and centripetal forces. What makes this a uniquely leftist endeavor is not clear but it is quite charming how many leftists would be offended if you were to suggest to them that this anti-center, anti-Congress trait was nothing peculiar to the Left. But perhaps we can press the comparison a little further to the actual strategies of the regional leaders. Most of the regional leaders faced a twin challenge: to wrest some degree of political autonomy from the center and curb threats posed by various Marxist-Leninist (ML) groups’ militant rural mobilizations. To this end, all of them experimented with political institutions, administrative structures and police strategies. The large section of rural voters who were restless under the Congress networks of feudal power and yet were urbane enough not to be attracted to the ML was the main target for the emerging regional leadership. In incorporating these sections into their politics, all the regional leaders followed similar patterns: tinker with panchayati and district political institutions to create appropriate avenues that would be accessible to these sections and not to the Congress, rustle up policy and administrative recipes to create stakes for these voters in the productivity of land – through sharecropper registrations, power subsidies, borewell subsidies and so on. Sharecropper registration data from Bengal villages overlaid with voting patterns over two or three successive elections in Bengal should reveal a pretty clear picture. But even without all that gimmickry, Pranab Bardhan and his colleagues demonstrate how sharecropper registration in Bengal was most intensive in villages where the left and right held equal power. Villages which were left strongholds reveal a pretty low level of sharecropper registration. Given their shared project of wresting autonomy from the center the regional leaders made common cause against the Congress, and came to each other’s rescue in national politics – Indira Gandhi’s nasty habit of using gubernatorial services to dismiss troublesome chief ministers was one issue that rallied together the left and the right in a remarkable way. Yet faced first with a crafty statesman in Indira Gandhi, and then her charismatic son, they also made pragmatic compromises with the center on an individual basis. Among other things, the Sarkaria Commission on center state relations was one of the major accomplishments of the solidarity among these regional leaders. So if this is at least in part the history of Bengal CPIM, why does it all sound so garbled? It is because the Bengal CPIM faces a challenge that no other regional leader faces: it has to tell a story of regional success, but it has to also tell it in national terms. That is the origin of the story of labor militancy. To acknowledge that Bengal CPIM is simply a cadre based regional operation to undermine the Congress party would make it sound parochial – something that does not suit the refined culture of its leadership. Hence it has to be packaged as a universal struggle against capital rather than a parochial fight against the Congress. This is why the CPIM’s cadre operations, capture of institutions, its day to day struggles and its police operations against Naxalites all these have to be packaged as labor militancy. Ordinary stories of mill closures because of ordinary reasons and ordinary collusions between union leaders and mill managements, and mundane stories of government will simply not do. It has to be the universal labor militancy. That is how Bengal’s elite distinguishes itself from the other regional elite.

After the launch of the economic reforms, the need for a united struggle against the center was largely gone. During the first five years itself, they started using their respective capacities to send MPs to the center to negotiate concessions to their own regions but in the second round of reforms this became an established practice in Indian politics. In fact, the political power of the regions was so striking that even the World Bank could not resist using it effectively. One powerful chief minister who commands sufficient MPs to threaten the central government is worth a dozen zealous bureaucrats at the center… so long as that chief minister is plied with enough funds to restructure the state’s economy, the central government will stay steady on reforms course. Bengal was not above this new dynamic of interregional competition for investments.

Against this backdrop, let us look at the actual history of Bengal’s industrial decline. Regardless of Comrade Budhadeb Bhattacharjee’s penchant to blame it on labor militancy, industrial decline of Bengal started soon after independence, as most of the investors in Bengal were foreigners. As these industries slowly packed up, the commanding heights economy centered in Delhi’s bureaucratic control, industrial finance clusters being located in Bombay proved disadvantageous to Bengal. The most pernicious of the policy interventions from Delhi was the freight equalization policy which effectively meant that eastern mining areas – Bengal, Bihar, Orissa all began losing to the southern states. Ever since the Left Front came to power in 1977, it largely blamed its industrial decline on discrimination by the center. While there is no clear evidence to establish this, substantial amounts of research based on time series data shows that mandays lost due to lockouts in Bengal is a significant proportion of the total mandays lost due to labor unrest.

A quick search indicates very little about how and where and when capital actually fled from Bengal because of labor militancy although everyone repeats it these days and it has actually begun to sound quite nice. “We are the guys who threw out capital and now we can do business as equals.” Regardless, it is possible to discern some patterns in inflows and growth elsewhere. During the 1980s in other states some of the public sector undertakings nurtured a fair amount of experimentation and growth especially in new industries like electronics, pharmaceuticals and so on. In the 1990s many of these came apart with workers being sent home with retrenchment packages, and senior level scientists and engineers walking away with technical knowhow. Using the social capital gained via their careers in these companies some of them sourced work, supply chains and work orders from abroad from Europe and the US – while some of them remained kitchen top pharmaceuticals and guest room data processing outfits, a few of them managed to grow into large corporations. To what extent this happened in Bengal is not clear. Available evidence suggests that the state did pretty well in attracting FDI in the post reforms period. It did alright in attracting the medium industry. It didn’t do too well with the sunrise industries and didn’t do too well with national big capital. Labor militancy cannot explain all this variation. As we have already seen, if some of it had to do with the ability of the regional leaders to negotiate with the center, some had to do with geohistoric inequities of the commanding heights economy, and some had to do with the social policies of the state government such as training the right kind of manpower, some had to do with corporate strategies and yet some of it was just contingent factors. If it is such a complex story even without any intimate knowledge of Bengal, why does everyone so glibly agree that labor militancy resulted in capital flight in Bengal? Why do statements ‘we must industrialize or we will perish’ sound right even when their blindness is so obvious? What kind of industry? What kind of labor? What kind of militancy and what kind of flight? Where to?

Part of the explanation could lie in CPIM’s need to distinguish itself from the run of the mill regional leaders. Part of it in Bengal’s nostalgia for its colonial industrial past. If that were all, there would be no reason to complain. Who could grudge the old comrade a touch of fancy? The trouble really is the consequence of that claim to inheritance of labor militancy gives the CPIM, the moral authority that is denied all other regional leaders to discipline workers and peasants now. It can conveniently wrap up a range of projects from real estate and retail to water privatization all in the industrialization blanket along with rising aspirations of the new middle class, the rent seeking behavior of politicians and bureaucrats and the recommendations of its international consultants. Bengal needs industrialization because for 25 years we have experienced capital flight due to labor militancy. If Kolkata develops East India develops. It is in that flight of fancy – rather than in the flight of capital that Tapasi’s death seems like a complicated case which needs creative scripting to suit the occasion. Why? Ask her mother. Tapasi died because she did not know that for Eastern India to develop she had to control her bladder!


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