DOWN TO BUSINESS
With the Bengal Global Summit bringing investment proposals worth over Rs 2 lakh crore, Mamata Banerjee’s efforts to shed her anti-industry image seem to be paying off at last
With proposals worth over Rs 2 lakh crore at the Bengal Global summit, Mamata is finally shedding her anti-industry image
In the not-so-distant past, West Bengal had acquired the reputation of being a sort of graveyard for industry. After all, Bengal was where the venerable Ambassador wheezed its last, in 2014. True, the closure of Hindustan Motors’ Uttarpara plant had less to do with the state it was in than the more-than-aged veteran that was the Ambassador. But, then again, Bengal is also the state that refused the Tata Group its Nano factory in Singur in 2008. Mamata Banerjee, the architect of the Singur protests, has been chief minister of the state for about seven years now. ‘Pro-people’ is a fairly accurate description of the Trinamool Congress (TMC) chief and her politics, but for many, that is synonymous with ‘anti-industry’.
Other problems bedevil the state too. For instance, between June and September last year, the agitation for a Gorkhaland state by the Gorkha Janmukti Morcha (GJM) paralysed the Darjeeling hills, with business and tourism losses pegged at hundreds of crores. During the 104-day shutdown, 12 people were killed, government buildings were vandalised or set on fire, and the army called in to restore peace. There are other stories about industry suffering in the state. Infosys, which had invested Rs 75 crore during the Left Front’s rule to acquire a 50-acre plot on the outskirts of Kolkata to build a development centre, found itself in a spot in 2011 when the Mamata government refused to approve the project as an SEZ (Special Economic Zone).
But, if the Bengal government—and some of India’s richest industrialists—are to be believed, those days are long past. In January this year, Mamata hosted the fourth Bengal Global Summit at a brand new convention centre in Newtown, Kolkata. It was well attended— Lakshmi Mittal was there, as were Mukesh Ambani, Niranjan Hiranandani, Uday Kotak and Pranav Adani, among others. The industrialists lavished praise on the chief minister. Ambani went as far as to say, “Didi, under your leadership, West Bengal is becoming best Bengal,” while Hiranandani called her “super ke upar (better than super)”. Kotak said he was convinced the country’s future lay in the east. Much was promised during the summit, with MoUs and proposals announced totalling over Rs 2 lakh crore.
There is even more for West Bengal to crow about. Speaking after the summit, state finance minister Amit Mitra noted that Bengal topped the country in ‘ease of doing business’ rankings—which even Ambani had highlighted. Mitra said the state’s Gross Domestic Product (GDP) had grown from just under Rs 500 billion in 2010-11, when the TMC government came to power, to over Rs 10,000 billion in 2015-16. Ascribing this growth to a vast increase in government investment—from Rs 22.3 billion to Rs 152.2 billion over the period—Mitra claimed the efforts were yielding results.
“After we came to office, four cement plants have come to Bengal,” he was reported as saying. “We have Dalmia, Emami, our own industrial park, and JSW Cement, which the chief minister recently inaugurated. Shree Cement is starting to build its factory, with an investment of Rs 10 billion. We are probably becoming a major cement hub of the country.”
But how much of all this is optics and how much is true? Though promises made at business summits are often just that, some proposals for West Bengal deserve a second look at least. Like Sajjan Jindal’s investment of Rs 10,000 crore over the next three years to expand his JSW Group’s
presence in the state or Ambani’s pledge to invest Rs 5,000 crore over the same period. Ambani noted that his initial investment, as Jio’s foray into the state, had made a 300 per cent return. In the case of Jindal’s group, the story involves the TMC government ‘arm-twisting’ the conglomerate into making good on its promise to set up industry on land acquired under the Left Front rule or face Singur-like consequences. (The JSW Group’s initial plans of steel production had been scuppered by changing business environments.)
That said, some industrialisation attributable to the TMC government is visible. The Panagarh Industrial Park— a state-run factory cocoon of sorts, equipped with water, electricity, roads and sewage infrastructure, that industries have been demanding for years—is home to an Emami Cement grinding plant, which began operations in February 2017. Dalmia Cement set up shop in Bengal in 2014, and is reportedly considering opening another unit. The case of Shree Cements is less cheerful. Though the project was announced as early as December 2016, managing director H.M. Bangur was quoted as saying in January this year that their Rs 5 billion expansion in Purulia was held up because 5 per cent of the requisite land was yet to be acquired.
Speaking of land acquisition, Mamata’s party had stormed to power in 2011 with a hawkish stance against industry—its election manifesto explicitly opposed to the acquisition of farmlands to create SEZs. The historic victory, which ended 34 years of Left Front rule, was seen as a vindication of the Singur agitation against the Left Front’s forcible acquisition of agricultural land for the Nano factory. So much so that some industry titans had wondered in 2011 if Bengal would be out of bounds for business under the TMC’s rule.
Take Infosys’s case again. In 2008, Infosys began to invest in developing a 50-acre SEZ in Rajarhat. By 2011, the company had reported an investment of about Rs 75 crore, but the project suffered a crippling blow when the Mamata government refused to authorise any more SEZs. Six years passed. It was only in early September last year that the government and Infosys reached an agreement—the IT major would go ahead with its project without SEZ status but, as part of the deal, get freehold rights over 51 per cent of the land acquired and could use it for any purpose it considered fit.
In her second innings in power, Mamata appears to be assiduously cultivating a pro-industry image. For instance, one reason why Mittal attended the 2018 Bengal Summit was that Mamata had taken it upon herself to deliver the invitation, while on a trip to London. Aside from the praise the billionaire heaped on her and West Bengal at the summit, Mittal reportedly returned the courtesy call by visiting the chief minister at her home the previous month.
At the summit, Mamata left no stone unturned in trying to convince the industry captains that Bengal was open for business. “Think of Bengal as your sweet home, and us as your family members,” she said. “You are our assets, our strength, our inspiration. We are nothing without you—we can’t perform, function and survive without you. Here, bureaucrats work like one big family, and are always ready to help you. There is no pressure or intimidation—only love and attraction.” Hyperbole accounted for, that is still a warm welcome in no uncertain terms.
However, whether Mamata’s industrialisation push will have realworld effect is yet to be seen. Between now and the end of her government’s term, a great deal of land will have to
be acquired for industry. The TMC government’s method appears to be to purchase with government assistance/ oversight, and so far, doesn’t seem to have invited much complaint from sellers. There is also some evidence that the government’s policies are creating jobs—the Brookings Institution’s Global Metro Monitor estimates that in 2013-14, Kolkata’s job growth was at 2.5 per cent, ahead of every Indian metro except Delhi (3.3 per cent). It ranked 32 in the index that year again, second only to Delhi (18) nationally.
Yet, despite all of Mamata’s earnestness in lifting Bengal’s business fortunes, the spectre of unrest can be a huge dampener—as last year’s violence in Darjeeling proved. Even Ambani referred to it indirectly in his speech at the business summit: “An industrial miracle has happened [in West Bengal] because there is peace and pace.”
Perhaps to make sure that her own message of rules-based development is taking hold, Mamata held yet another business summit a fortnight ago, this one in the Darjeeling hills. She announced a government investment of Rs 100 crore for the region to boost tourism. The private sector evinced a much more modest interest—proposals worth Rs 1,500 crore—against the several lakh crore received at the Bengal Global Summit. But the event served another purpose. With newly installed GJM chief Binoy Tamang seated beside her on the podium—and a publicly extracted a pledge from him that the days of strikes and instability in the Darjeeling hills are over, in exchange for a promise of investment and development—Mamata made one thing rather clear. In Bengal, at the very least, she knows what makes business sense.