Ben­gal Shin­ing?

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

India Today - - INSIDE - WEST BEN­GAL

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.



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