September 3, 2008

Hopes Rise for the Nano As Indian Protesters Agree to Talk Tata’s Low-Cost Car Held Up Over Land Seizure By Government

Protesters holding up work at an Indian factory that is building the Nano, a car made by Tata Motors, have agreed to talks on land seizures, a protest leader said on Tuesday, raising hope that the world's cheapest car will roll out on time.

The offer to talk is seen as a marginal softening in the stand of Trinamool Congress, the main opposition party in West Bengal State, which is spearheading the protests. It had said that parts of the factory had to relocate from land that farmers did not wish to give up.

The protests slowed work at the factory for months, threatening to derail plans to launch the $2,300 car in October to coincide with the Indian festival season.

Such has been the acrimony that the chairman of Tata Motors, Ratan Tata, said he was prepared to move the plant from Singur despite having invested $350 million in the project.

The Trinamool has also come under pressure to find a way out of the stand-off after industry lobbyists and analysts warned that the protests could scare away investors.

"Doors are now open for talks. Things are getting eased," Partha Chattopadhayay, a top Trinamool Congress leader, said while thousands of Nano workers stayed away from work for the fifth day on Tuesday in the face of protests.

The protests in Singur reflect a larger standoff between industry in India and farmers unwilling to part with land in a country where most of the population depends on agriculture to make a living.

The trouble began after the government took over 1,000 acres, or 400 hectares, of farmland for the factory. The government offered compensation, but some farmers with smaller land holdings said it was inadequate and demanded that their land be given back to them. The disputed land measures about 400 acres.

"We agreed for talks only after assurances that the demand of returning 400 acres would be discussed," Chattopadhayay said.

The opposition wants the West Bengal governor, Gopalkrishna Gandhi, to play peacemaker.

Work at the Tata factory in Singur, an hour's drive from the West Bengal capital, Calcutta, was suspended last week after threats from protesters.

The government, eager to resolve an issue threatening its industry-friendly image, said it was willing to discuss fresh compensation offers. Analysts agree that is the best way forward.

"The compensation paid for the land is measly," said Abhirup Sarkar, an economist and social commentator based in Calcutta. "It should be three to four times higher than what was paid."

The controversy has seen other Indian states offering to take the Nano factory. Shares in Tata Motors, the top vehicle maker in India, have not been significantly affected by the dispute.

Originally published by Reuters.

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