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However, he took the biggest risk of his political career by embarking upon the industrialization drive to change the face of West Bengal, which had agriculture as primary source of income. He deviated from the standard Marxist doctrine to invite foreign and national capital to set up factories in West Bengal. Notable among them was the world's cheapest car, Tata Nano, from a small hamlet near Kolkata called Singur. There were other proposals too, such as country's largest integrated steel plant in Salboni, West Midanpore district by Jindal group, and a chemical hub at Nayachar after it faced agrarian resistance in Nandigram. However, his plans backfired, and his party, along with its front partners, suffered heavy losses in the 2009 Lok Sabha election. In the 2011 state assembly election he was defeated by the Trinamool congress candidate Manish Gupta by 16,684 votes, and the CPI(M) lost power in the state. He was relieved of his posts on the Politburo and Central Committee at the 21st party congress, organised at Vishakhapatnam in 2015.
In January 2006 the Supreme Court of India issued notices to Left Front Government ministers including Buddhadeb Bhattacharjee and others in relation to land allotments made in the Salt Lake City township in Kolkata.
Buddhadeb Bhattacharjee's Government came under heavy criticism for police action against demonstrators in Nandigram in East Midnapore. He was criticized not only by opposition parties (such as the Trinamool congress, Party of Democratic Socialism, Bharatiya Janata Party, Communist Party of India (Marxist–Leninist) Liberation, Communist Revolutionary League of India and others) and other Left Front coalition allies like Communist Party of India, Revolutionary Socialist Party (India) and Forward Bloc, who threatened to back out from the ministry on this issue, but also by his mentor and the state's former chief minister, Jyoti Basu. On March 15, 2007 Basu criticized Bhattacharjee for failing to restrain the police in Nandigram. Bhattacharjee expressed regret for the shootings, but claimed that he permitted police action because Nandigram was an "area where there had been no rule of law and no presence of an administration for not one, two or 10 days but for two-and-a-half months, and many hundreds of villagers left Nandigram, and took shelter in a state relief camp outside Nandigram." Actually Buddhadeb Bhattacharjee declared that land in Nandigram won't be acquired by ordering the Nandigram notification to be torn apart. Still police were not allowed to enter Nandigram. Roads were dug up, preventing administration from entering the area. The CPI(M) declared that they were totally behind Bhattacharjee and had drawn up "plans" to placate his critics in the Left Front. His government was also criticized by Left supporters for failing to protect the Left party workers (including his own party CPI(M)) who came under assault from political opponents - both right wing and ultra-left wing Maoists during the post-Nandigram turmoil until the end of 7th Left Front Government.
The Padma Bhushan controversy
In January 2022, the Central Government of India bestowed Bhattacharjee with the Padma Bhushan, the third-highest civilian award in India. However, he declined the award and claimed that he had not been informed about the award. He said a call was made to his residence earlier in the day, while adding there is no provision of taking consent for giving Padma awards.
Later, the CPI(M) General Secretary Sitaram Yechury clarified Bhattacharjee's stance in a tweet which said