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Indian state refuses to back down on Nano project

KOLKATA - The government in India's eastern West Bengal state rejected on Tuesday a demand by farmers to return them disputed land acquired for making what is billed as world's cheapest car.

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Tata Motors, which is setting up the plant to roll out the $2,380 Nano, has faced violent protests and political opposition over the acquisition of farmland in Singur, an hour's drive from Kolkata.

"I just cannot give back the land," West Bengal Chief Minister Buddhadeb Bhattacharjee said at a business session in the state capital Kolkata.

"Giving back 400 acres is dropping the project, I cannot afford to do that," Bhattacharjee said, referring to demands made by farmers and opposition parties to return land.

The trouble began after the government took over 1,000 acres of farmland for the factory. The government offered compensation, but some farmers with smaller land holdings have refused compensation, demanding that land be given back to them.

The protests reflect a larger stand-off between industry in India and farmers unwilling to part with land in a country where two thirds of the billion-plus population depend on agriculture.

Mamata Banerjee, leader of the opposition Trinamool Congress which is spearheading the protests, threatened to stage a statewide campaign.

"We will start a state-wide agitation now against the project, unless the land is returned to the farmers," Banerjee told reporters in Singur.

Last week, Tata Motors chairman Ratan Tata he was prepared to move the plant from Singur despite having invested $350 million in the project.

At the weekend thousands of farmers and opposition activists protested outside the plant, the latest in demonstrations that have often ended in clashes with police.

Chief Minister Bhattacharjee said he was hopeful he could convince Trinamool Congress to end their agitation.

"I am trying my best ... I am an optimist. I still believe I can convince the opposition. I believe we should reach a consensus," he said.