Industries are taking a fresh look at West Bengal for investment
THE mood at the well-appointed West Bengal Industrial Development Corporation (WBIDC) office in Calcutta is upbeat. Naturally so, for the business fortunes of this industrially ailing state seem to be looking up once again with a spate of domestic and foreign investments. And optimists predict an industrial rennaissance in the offing.
Says Somnath Chatterjee, the feisty WBIDC chairman and CPI(M) MP: "The total investment for 26 major projects in the near future is around Rs 11,791 crore. Sanctions are pending at the IDBI for projects involving investment of around Rs 2,045 crore, including steel, paper, alcohol-based units, air service...this is for the future. For the present, commercial production will begin in 30 small and medium projects, with the outlay totalling Rs 623 crore, by December this year. And up to May, 22 projects with an investment of Rs 261 crore have gone on stream. The question of receiving sanctions and clearances from central agencies and financial institutions is important, for it took us 12 years to get permission for the Haldia petrochemical project, whereas Guj-arat got it in minutes, so to speak."
The latest feather in the state's cap is the Osaka Chamber of Commerce's declaration that West Bengal has been earmarked as a "developing area". A Japanese delegation's visit is on the cards—this is bound to boost Japanese business interests in the region. Already, there is a large Japanese presence—Itochu has helped salvage the Bakreswar power project with a Rs 1,700-crore package. This was followed by a financial tie-up between Sumitomo Corporation and the West Bengal-based Usha Martin group to undertake leasing operations in the region.
Swapan Chakravarty, WBIDC managing director, points out that the hard work of the last few years—persuading major industries to take a fresh look at West Bengal—is beginning to pay off. He rattles off a list of incoming projects: "J.K. Saraf Breweries of Andhra Pradesh is setting up a Rs 35-crore unit at Bankura. Madhusudan Synthetics, the Maharashtra-based concern, is setting up a Rs 20-crore unit, while India Foils has decided to carry out an expansion project worth Rs 130 crore at Panihati rather than in Gujarat as planned earlier. For the first time, again, we are doing relatively well in securing major public sector investments, with Indian Oil planning to invest Rs 1,000 crore to expand its facilities at Haldia. The Videsh Sanchar Nigam is undertaking a major project involving the uplinking of communication facilities at a cost of Rs 100 crore. These are only a few of the projects. Pertech Computers has recently shifted its headquarters from Delhi to Calcutta, while the Kirloskars are opening a new office. Philips and Siemens have also strengthened operations in West Bengal."
And there's more. Says S.B. Ganguly of Exide Industries: "We will invest around Rs 30 crore to upgrade our plants at Haldia and Shyamnagar. The situation has certainly improved in the state in the last few years. The wages are lower than elsewhere. There has been no labour militancy and the people have really changed their attitude."
Not all signals, however, are positive, even as the state attempts to put itself on the fast track to economic recovery. Chatt-erjee is candid enough to admit: "If I had more powers, I would try to make things move faster, legally and humanely." Being only too aware of the inordinate delays that plague the transformation of MOUs into concrete projects, he says: "We follow a distinctly different approach even while seeking investments. We do not debunk other states like Maharashtra or Gujarat. We want India as a whole to develop. Until recently, the authorities at the Centre, not to mention other competing states, virtually ran a campaign against us and the entire eastern region. They fear our potential for development and highlight the negatives only. True, our infrastructure needs improvement and we are working on it. But in terms of political stability, law and order, power availability, the productivity of a skilled and disciplined workforce, an expanding market, the proximity of ports and airports, our advantages are considerable."
But even neutral observers would agree that lethargic decision-making and implementation of decisions remain the bane of West Bengal's work culture. To cite only one instance, an international bank offered to spend Rs 20 lakh to spruce up Old Court House Street, the historical thoroughfare in Calcutta's commercial hub where the WBIDC has its headquarters, almost a year ago. State government authorities have still not made up their minds as to which agency should undertake the work—the Calcutta Municipal Corporation or others. The money remains unspent and the bank itself has all but lost interest. The road, meanwhile, gets more pockmarked by the day.
Remarks B.P. Agarwal of ABC Consultants: "I hear much talk of fresh industrial investments but my findings suggest otherwise. The power situation is excellent, the government is more helpful but the infrastructure is awful." And it's not as if local authorities are unaware of the infrastructure deficiencies in the state. Outgoing US Consul Robert Boggs, who took a keen interest in the economic revival of Bengal, told state government officials of the absence of even minimum social facilities in the sprawling city. The top level international executive, he said, would hardly find suitable accommodation, clubs, nightclubs, swimming pools, tennis or golf facilities for recreation. What he left unsaid was that visitors are bound to be put off also by the city's hawkers who threaten to take over every major thoroughfare, the bad roads, the madding crowds which cause long traffic jams, the encroachment by the urban poor on pavements and the uncleared garbage. The state government has turned a blind eye to the economic future by ignoring these problems which have affected Calcutta's image as a functioning metropolis—nationally and internationally.
CRITICS feel that the perceptible flow of investment is too little too late. Says Congress MLA and INTUC leader Saugata Roy: "Other states have performed much better in securing investments since liberalisation, here there has been too much talk and little work."
Former minister and CITU leader Chittabrata Majumdar begs to differ: "West Bengal trailed other states not because of any intrinsic demerits, but because of the Centre's freight equalisation and discriminatory licensing policies that changed only with liberalisation." His colleague and MP Dipankar Mukherjee points out that while Bengal sold its power surplus to Delhi, Andhra Pradesh, Orissa, Assam and Bihar, Gujarat faces power cuts which, last November, led to the loss of Rs 1,300 crore in only three weeks. In fact, he claims, Central agencies have already taken note of the power deficit in Maharashtra, Andhra Pradesh and Karnataka.
West Bengal-based industrialists are hopeful but do not want to sound too optimistic. Says Abhijit Sen on behalf of the Indo-American Chamber of Commerce: "Though the power situation has improved considerably, the message has not been sufficiently communicated to potential investors. But the picture is not all bleak. When I joined the board of NICCO two decades ago, its turnover was only Rs 7 crore per annum. Last year it was Rs 550 crore, with practically all the growth coming from operations in West Bengal."
Vikram Somany, president, Bengal Chamber of Commerce, refers to the joint study into West Bengal's industrial prospects by ICICI and Arthur D. Little, Boston-based consultants, which pinpointed the state as "India's most favourable environment for domestic and foreign industrial investment" and Calcutta as the leading industrial and trade centre.
Both Sen and Somany unanimously reject a recent survey conducted by a leading business magazine which accorded a very low position to West Bengal as a centre for investments. CITU leaders endorse their views: "While 64 Bombay-based people and 52 from Delhi were interviewed for this so-called survey, only two were sounded out for Calcutta! It is difficult to treat a survey, which lists Calcutta as an airport in Uttar Pradesh and puts Tripura, Sikkim and Nagaland above West Bengal in terms of investment opportunities, seriously."
Chatterjee is more surprised than shocked: "I do not know the basis of this so-called survey, because no one contacted the WBIDC, the state government or the industries, power or labour departments, nor any local chambers of commerce."
The communists have been ruling the state for 19 years and are now desperate to revive Bengal's past glory—industrially. But first, it has to improve the infrastructure—not an easy task in a city which hasn't been looked after particularly well; and second, it has to do something about the work ethos, which seems to have become only more lackadaisical down the years.