BENGAL: DIDI MEANS BUSINESS
It took more than a decade and three back-to-back assembly wins for the Mamata Banerjee government to roll out the red carpet again for the Tatas. Mamata came to power on the back of a farmers’ movement in Nandigram-Singur against the land acquisition for the Tata Nano factory (2006-08), and it hasn’t been easy for her government to shed the anti-industry image it acquired in the bargain.
Even after all the talk of Rs 12 lakh crore worth of investment proposals from the five editions of the Bengal Global Business Summit (2015-19), actual investments “were Rs 50,00060,000 crore in the past decade”, says a senior government official on condition of anonymity. “Of this, the Centre’s contribution was around Rs 10,00012,000 crore. As for jobs, around 100,000 were created in big industries and another 300,000 in MSMEs,” adds the official. Ex-industry minister and current finance minister Amit Mitra, however, insists that 40 per cent of said investment proposals are in various stages of implementation.
With a third and decisive election victory under her belt, Mamata Banerjee believes it is time her government made a determined effort to bring industry to the state. A telling declaration of this intent was new industry minister Partha Chatterjee’s statement that the Tatas are among the “most respected business houses in the country and are most welcome to come and invest in Bengal”. A new Tata Centre is coming up at Rajarhat, Kolkata’s IT hub, and the government is tying up with the Tata Memorial Hospital, Mumbai, to upgrade the SSKM Hospital and Medical College.
Mamata knows the 2021 mandate was largely due to her government’s social welfare schemes, but “she also realises that industry needs a big push to create jobs for the youth and stop the drain of human capital from the state”, says the industry minister. To this end, she is expanding the scope of IT and ITES, which, as per government claims, have seen a five-fold increase from 500 to 2,600 units and a doubling of exports (Rs 29,000 crore in 2018-19) and employment generation (from 90,000 to 210,000 jobs) in the past 10 years.
Mamata was hoping to launch the industrialisation drive in her new term with some big-bang investments, but had to settle for the Kolkata-based Dhunseri Group’s Rs 1,250 crore polymer film manufacturing factory at Panagarh in West Burdwan. It will come up on 38 acres carved out of the Panagarh Industrial Park’s 1,458 acre land bank. Land acquisition is still a big hurdle in the state. The TMC government, back in 2015, adopted a policy of direct purchase of land by private players from landowners/ farmers. The state’s hands-off policy has been a dampener of sorts for industrial houses, but the authorities are telling prospective businesses to head to the 12 industrial parks, where an estimated 6,000 acres of land, owned by the West Bengal Industrial Development Corporation, lies unutilised. There’s also a Scheme for Approved
Industrial Park (SAIP) to encourage private investors to set up industrial parks on their own land, in order to qualify for tax exemptions and other incentives such as subsidised electricity. But it may not be enough, says Nilanjan Ghosh, director, Observer Research Foundation (ORF). “Big-ticket investments in manufacturing will not come unless the state agrees to be a facilitator in acquiring land,” says Ghosh. To get around the land availability issue in Kolkata and the suburban districts of North and South 24 Parganas, the state is giving industrial park status to investors setting up units on land parcels as small as 5 acres. That status translates into incentives like full reimbursement of stamp duty on land; loans to build a power substation; a 1.5 km approach road to connect to a major arterial road; and a cashback of Rs 2 crore. With this, cold chains, fish/ poultry farms and warehouses of up to 5 acres will be able to avail themselves of industrial park status and incentives. Chief secretary H.K. Dwivedi says the state plans to set up 100 new industrial parks, which will also inevitably boost the job market. Mamata has formed a 16-member committee, the West Bengal Industrial Promotion Board, to clear all bottlenecks and expedite clearances. And
Bengal is now 9th in the DPIIT ease of doing business index, ahead of even Gujarat
things are beginning to look up. On the Department for Promotion of Industry and Internal Trade’s (DPIIT) ease of doing business index, Bengal is now in ninth position, ahead of Gujarat. Ghosh sees “a lot of potential in the [state’s] service sector” businesses of hospitality, healthcare, transport and tourism.
The services sector already contributes about 55 per cent to the NSDP (net state domestic product). In the past decade, it has grown about 7 per cent, hinting that a shift is happening from manufacturing to services in the state. ITES (or IT-enabled services) have played a big part in this. Of the 200 acres at the Silicon Valley Tech Hub in Rajarhat, 160 acres are now occupied. “The Bengal Silicon Valley in New Town is fast becoming a satellite city,” says Partha Chatterjee. Infosys has started work in its offices here, Wipro is scaling up with a second campus and the two are promising 10,000 jobs. Bengal plans to raise its share in the country’s IT exports to 25 per cent by 2030. Mamata has also launched an industrial township —Jangal Sundari Karmanagari (JSK) in Raghunathpur in Purulia; it will overlap with the freight corridor between Amritsar and Dankuni. JSK will develop 2,483 acres into an integrated manufacturing cluster at Ragunathpur. The government and the National Industrial Corridor Development Corporation (NICDC) will form a 50:50 SPV to access the benefits of the 1,856 km freight corridor connecting Bengal to Punjab. “The industrial corridor will fetch investments worth Rs 72,000 crore and create lakhs of jobs,” Mamata said at the launch in Panagarh on September 1.
The government is also banking on the “largest coal block” in the world—the Deocha Pachami open cast mine, in Muhammadbazar of Birbhum district, with estimated reserves of 2.1 billion tonnes of coal. A Rs 15,000 crore plan is ready to develop the block. Extracting the coal will be a challenge as the deposits lie 200-300 metres beneath a thick crest of basalt rock—also the reason why other states that were offered the block backed out.
Business commentator Pratim Ranjan Bose says the state government’s adversarial relationship with the Centre is a big reason Bengal finds it hard to raise its industry profile. “The state sniggered when the [Union] finance minister announced the Kolkata-Siliguri highway in the 2021-22 budget. This opposition for the sake of opposition is holding up development in north Bengal. So, instead of Siliguri becoming a logistics hub, the focus of the entire Northeast and neighbouring Bangladesh, Nepal and Bhutan is gradually shifting to Guwahati, which is fast developing into a trade and transit hub. Even Tripura is now depending on Guwahati for its supply chain instead of Bengal,” he says. Out of India’s $16 billion (Rs 1.18 lakh crore) exports to Bangladesh, Nepal and Bhutan, West Bengal’s contribution is minuscule (15 per cent in rice and about 10 per cent in steel). Obviously, Bengal still has a long way to go before it becomes an industrial powerhouse in the country.