Mamata is laying out the red carpet for industry and trying hard to bury the ghosts of Singur and Nandigram. Progress is slow, and she still has some way to go before she can put industry at ease
Mamata Banerjee lays out the red carpet for industry in the state. But will the ghosts of nadigram and Singur follow her into the second term?
It has been nearly two months since Mamata Banerjee took over as the chief minister of West Bengal for the second time, and she is letting everyone know that she means business. A US delegation led by the Under Secretary of State for Political Affairs Thomas A. Shannon met her in the first week of July. Among other things, say sources in the chief minister’s office, they discussed investment in the state.
If Mamata made history last term by overturning 34 years of Left rule in West Bengal, she also undid a lot of that good with her intransigence on Nandigram and Singur, failing to deliver the poriborton she had assured her electorate. West Bengal failed to shake off the image of being a graveyard of
industry under her.
Didi is determined to change things this term and the audience at her felicitation ceremony in June, by the nine chambers of commerce and industry in Kolkata, got the first taste of it. “Is the market in an economic slowdown or are we making it slow by just chanting Hare Rama, Hare Krishna,” an admonitory Mamata thundered.
She is certainly laying the foundation for industry to invest. A 2015 World Bank ease of doing business survey ranked the state 11th in the country. Last year, she introduced single-window clearance for 38 industries, a process that can be initiated online. She has also been giving infrastructure a big push, the 2015-16 budget setting aside $8.2 billion. Of this, $99.7 million was allocated to the construction of Asia Highway 2, connecting the Nepal border (Kakarbhitta) to the Bangladesh border (Banglabandha). A number of road development projects have been taken up under publicprivate partnerships, including the Barasat-Krishnanagar section and the Palsit-Dankuni and PanagarhPalsit projects. In 2014-15, the state government commissioned a 250 MW thermal power unit in Durgapur and renovated a 210 MW unit of the Bandel thermal power station.
Land acquisition has been famously hard in the state, a problem made worse for industry by the fragmented nature of holdings. And Mamata herself won’t be seen as the one responsible for evicting farmers. The state is instead offering 6,000 acres of contiguous land in industrial parks. “Industrial parks all over the state have readily available land,” says land and land reforms department secretary Manoj Pant. “The government has special incentive packages for parks in Purulia, West Midnapore and Bankura.” The CM reiterated this at her felicitation ceremony. “Land is not a problem. Give us proposals and we will consider them.”
“This kind of push will have a big impact on industry,” says Abhirup Sarkar, chairman of the West Bengal Infrastructure Development Finance Corporation. “She might have political compulsions in not acquiring land directly, but she’s amenable otherwise. She’s giving land ceiling clearances and asking industrialists to form consortiums to steer clear of ceiling constraints.” In the state’s rural areas, holding land in excess of 24.8 acres requires clearance under Section 14Y of the West Bengal Land and Land Reforms Act, 1955.
Keeping within the constraints of her land policy, Mamata is also concentrating on expanding sectors where the land required is less but the potential to generate jobs and bolster the rural economy is rich. Her thrust, therefore, is on sectors such as food processing, animal husbandry, fisheries and textiles. The state is also proposing to set up three biotechnology hubs in Bardhaman, Kalimpong and Medinipur districts.
She has also been wooing industry assiduously at various forums. Thanks to her efforts, the 2016 Bengal Global Summit garnered investment proposals worth Rs 2.5 lakh crore, while the 2015 edition netted Rs 2.43 lakh crore. (These are government claims.) The state has also organised three business conclaves—Bengal Leads—in 2012, 2013 and 2014, and held roadshows in Delhi, Mumbai, Bengaluru and Hyderabad.
“One very visible change we see in her is a clarity on the industrial roadmap, strong focus on implementation of projects and realisation that industry plays an important role in generating employment and tax revenue,” says Indian Chamber of Commerce president Rajeev Singh.
The growth has started reflecting in the state’s numbers, though Mamata’s detractors attribute any improvement to the low economic base. With ministry of statistics and programme implementation recording a gross state domestic product of over Rs 8 lakh crore in 2014-15, West Bengal stood fifth in the country. In terms of gross value added, its growth rate of 10.48 per cent in 201415 was impressive in comparison with the national average of 7.5 per cent. Per capita income growth in the state was also significant at 12.8 per cent, an improvement on its own 9.5 per cent in 2012-13 and comparing favourably with the national average of 6.1 per cent.
Slowly but surely, Mamata’s industry is bearing fruit. A Thailand-based special purpose vehicle company, CPS Indian, is investing Rs 550 core on aqua and prawn feeds. The Emami group will set up a 2 MTPA (million tonnes per annum) cement grinding unit at a cost of Rs 500 crore. Sajjan Jindal’s JSW is planning a 4.8 MT cement plant and a 1,320 MW power plant in Salboni at an outlay of Rs 10,000 crore. ITC will invest nearly Rs 3,000 crore in two integrated consumer goods manufacturing facilities in Uluberia and Panchla and an information technology facility in Rajarhat.
Having driven Tata away unceremoniously in 2008, in a blaze of bad publicity, Mamata is now keen to have an automobile industry footprint in the state. She plans to visit the Turin unit of Fiat in Italy when she goes to Rome for the canonisation ceremony of Mother Teresa in the first week of September. Fiat, ironically, has a manufacturing tie-up with Tata in India.
She has roped in Mahindra and Mahindra to set up an auto ancillary
unit in the 13 acre Raghunathpur industrial park in Purulia. The Rs 150 crore endeavour will be the largest such project in eastern India, claims an official in the state industries department. Karnataka and Tamil Nadu too were vying for this project, says a senior officer of the West Bengal Industrial Development Corporation (WBIDC), but West Bengal got lucky. “The main reason is that contiguous land was readily available with the industries department,” says WBIDC executive director R. Kamala Kanth.
Another area that ranks high in Mamata’s priorities is the maritime sector. She is looking to build inland waterways to connect with the national waterways network. Large freighters with full capacity cargo cannot dock at the Kolkata and Hooghly ports. A minor sea port on the Shankarpur-Tajpur coast in East Midnapore with a draft facility of 15 metres is being planned as a gateway to eastern Asia. “A 36 month project, it will be fully operational by 2019,” says a senior bureaucrat in the state industries department. “It’s going to steal Dhamra port’s thunder.”
Further, with the central government prioritising the defence sector and easing FDI norms, West Bengal is hoping to bag a few manufacturing contracts. “The competition will be cut-throat,” says the bureaucrat, “but everything will depend on the relationship the state has with the Centre.”
Mamata made a conciliatory start by inviting the entire Modi cabinet at her swearing-in. She has also been batting for the Goods and Services Tax (GST), indicating clearly that the 12 TMC members in the Rajya Sabha will ensure its smooth passage. Hailing GST as ‘positive’, ‘pro-people’ and ‘pro-industry’, she says, “I may be opposing the Centre politically, but I’ll support them on ‘positive subjects’.”
“This is a practical, pragmatic Mamata,” says Kallol Dutta, a member of Mamata’s core committee on industry. “She has realised that by rolling out GST, she can reduce the state’s debt burden by earning an additional Rs 5,000 crore in revenue.” West Bengal had a debt burden of Rs 2.7 lakh crore in 2015. Finance minister Amit Mitra in the vote-onaccount budget session in the assembly said debt repayment would rise to Rs 9,781 crore in 2016-17. At 35.5 per cent, the state’s debt to GSDP ratio is the highest in the country.
How, then, does Mamata plan to service the sundry populist measures she has announced? These include food security for 80 per cent of the population, free treatment and free blood in government hospitals, 4 million cycles, Rs 80 lakh for school shoes, scholarships and stipends for higher education of 3.3 million girl children, and doles for the unemployed. “These will cost the state only Rs 10,000 crore,” claims a senior government officer. Tax revenue has gone up— from Rs 72.9 lakh crore in 2013-14 to Rs 11.3 lakh crore in 2015-16, according to RBI figures—but the state’s tax revenue to GSDP ratio, at 5.7 per cent in 2014-15, was the lowest among non-special category states.
There are other negatives too. Mamata’s policy on SEZs remains fuzzy. She has, for instance, been reluctant to extend the SEZ tag to the Infosys project in Rajarhat, which has been on the back-burner for seven years. “The SEZ policy is going to lapse in 2017, and if Infosys fails to start their SEZ by next year, they will lose the chance forever,” says Swarup Ray, a senior executive in the state IT department. “Now the concept of SEZ has changed. A small tract of five acres or even 10,000 sq ft area can be declared an SEZ. But since Mamata Banerjee agitated against the proposed SEZ at Nandigram, for which the erstwhile Left Front government was going in for massive land acquisition, she has to stick to her guns.” Wipro, which was planning a second unit in Kolkata, also said that minus the SEZ status, it might have to shelve its expansion plan.
MAMATA WITH FM AMIT MITRA AT HER FELICITATION CEREMONY BY CHAMBERS OF COMMERCE & INDUSTRY