Protests and Blockages - Implosion: India's Tryst with Reality - page 124

of the site. The Delhi-Gurgaon project became unviable because of investor concerns and
potential social unrest, and was shelved in 2012 after Reliance's six-year approval period
had expired. The company said it was facing problems linking up the land areas that it had
been given by the Haryana government and those it had acquired on its own. 8 Haryana then
asked for its 1,383 acres to be returned and farmers demanded the land be given back to
them. They claimed that values had rocketed from the Rs 20 lakh per acre they had been
paid by the Haryana government in 2006 (along with promises of jobs in the SEZ) to Rs 8
to 9 crore per acre. 9
The finance ministry was never happy about Nath's schemes because it saw that excess-
ive tax concessions were being offered for little return. Other critics said there would not be
much additional investment because most companies would build factories already planned
for other areas in order to reap the tax and other benefits. 'Of course, the government says
that only new investment will benefit, but who is to judge what new investment is? The
poorly paid tax inspector?' wrote Raghuram Rajan. 10 'If you create perverse economic in-
centives and then rely on bureaucrats to stand in the way of businesses exploiting them, the
outcome will be little more investment than would otherwise have happened and a lot less
revenue, but much richer bureaucrats.' He might have added 'richer politicians too', but
that would have been a tad too controversial and anyway did not need to be said.
'In India one has to weave one's way through the procedures. That's not just a legal pro-
cess or a financial process - it's a social process,' Kamal Nath told me in September 2008.
'In a democracy, all the stake-holders have to have a voice - and in India they have a partic-
ularly loud voice.' He was referring to POSCO's problems and what he called its 'learning
curve', but it was a lesson he should have also learned over the SEZ debacle.
Singur and Nandigram
'We have little choice but to move out of Bengal. We cannot run a factory with police
around all the time,' exclaimed Ratan Tata, 11 t hen head of the Tata group and chairman of
Tata Motors, when he announced in October 2008 that he was closing the almost complete
Nano factory at Singur in West Bengal and moving elsewhere. With that memorable exit
line, he marked Tata's departure after two years of often violent and politics-based oppos-
ition over two big industrial projects in the state - his factory, which was almost ready to
start turning out 250,000 cars a year, and a 10,000-acre chemicals SEZ planned by the state
government for Indonesia's Salim group at Nandigram, near the port of Haldia. Both dis-
putes blew up in 2006 over the prospect of agricultural land being compulsorily acquired
for industry, and together demonstrated growing social unrest that lay beneath the country's
economic boom.