Floats Of Fancy

In January 2016, the most ‘poriborton’-friendly gentry of West Bengal huddled together under their ecc­entric but benevolent chief minister, Mamata Banerjee. They held the second Bengal Global Business Summit, with political bigwigs imp­orted from Delhi—finance minister Arun Jaitley, railways minister Suresh Prabhu, power minister Piyush Goyal and roads minister Nitin Gadkari—joining an A-list of corporate honchos to tempt the elusive unicorn of private investment into the state.

After two days came the state government’s expected grand declaration: “Bus­iness announcements and document exc­hanges, expression of interest and inv­estment proposals” worth Rs 2.5 lakh crore had been signed. It will be a while before anybody knows how many proposals fructify but the show was, at least, well-timed to grab maximum attention.

Undoubtedly, the backdrop against which Bengal’s elections are being fought is ‘development’. When a Tata firm shut shop in Calcutta last week, letting go or relocating to Jamshedpur some 300 employees, commentators made dire predictions for Bengal’s economic prospects. Without a clear uptick in the economy, Mamata’s Trinamool Congress (TMC) would find it harder to seek the voter’s mandate to carry on for another five years in a jobs-, cash-, ind­ustry- and investment-starved state.

But, as any economist watching West Bengal knows, hype aside, manufacturing is shrinking. Worse, there is little change in this metric since 2006-07 when the CPI(M) led by Buddhadeb Bhattacharya was in power. Manufacturing grew 8.71 per cent that year and 8.74 per cent in 2013-14—that was two years into TMC’s rule, whose first year (2011-12) saw growth in the sector fall by 2.18 per cent. Bengal’s GDP grew 7.15 per cent last year, but that was also below the high in 2010-11, of over nine per cent.

This stagnancy has added fuel to an alre­ady bitter battle for survival and supremacy in the state, where the ifs and whens of exi­ting the doldrums have been ever-looming questions for the economy. “The people of West Bengal don’t need statistics to know what they can see with their own eyes,” says Dr Amit Mitra, state finance minister and former FICCI chief. “The people know we increased capital expenditure six-fold, from 2010-11 when it was negative, at minus 26 per cent.”

That could well be just the fond hope of the party in power. Like the expectation of every state government that investments would spring from networking lunches and special addresses­—even help the state break free from the blue funk of India’s inves­tment economy as a whole. Surajit Mazumdar, professor of economics at JNU, however, points out that states do not really enjoy that kind of independence from countrywide economic trends. “Many states use summits as an instrument to bring in investment,” he says. “But current policies of the central and state government don’t hold out much hope for the industrialisation of Bengal.”

No wonder there is disquiet in industry, but it is tempered with expectations that the groundwork is under way for opening Bengal to business. “Much work has been done in the past two years on ‘ease of business’ in particular,” says Harsha­vardhan Neotia, vice-chairman, Ambuja Neotia Group. “We are seeing an uptick in activity and things are falling in place. Of course, there will always be a lot more that needs to be done.”

Among the ‘positives’ in Bengal that ind­ustrialists list are simplified processes, esp­ecially for registering property, faster clearances for construction, and a leg up for those keen on building new townships. Bengal was recently able to improve its tax collections, by taking the system online. Ajitava Raycha­udhuri, who teaches economics at Jadavpur University, agrees that going online boosted efficiency, though it still falls short. “The unorganised sector is huge (and the government will have to grab the bigger players there to really improve tax collections,” he says. While around 45 per cent of Bengal’s industrial output is said to come from the unorganised sector and “the wealth of the big players has grown, they don’t get themselves registered, unfortunately,” he says.

That caveat apart, the government’s focus on rural infrastructure such as roads and revival of defunct water sources, besides flyovers in the cities and the metro in the capital, is largely ackno­wledged in the state. Coupled with efforts to encourage start-ups and small industry, they are expected to boost the TMC’s prospects, by appealing to a wide cross-section of society. “The increase of electricity tariff in a power-­surplus state is slightly surprising, especially when the government’s focus is on enco­uraging entrepreneurship,” says Assocham presi­dent Sunil Kanoria. “There is a lot to be done on infrastructure, though I hear the government is doing a commendable job in terms of sprucing it up in certain rural pockets.”

The top ‘negative’, it turns out, is the manner in which the Trinamool’s ‘syndicate’—a kind of local mafia—has taken over from where the Left’s ‘local committee’ (LC) left off. Without the LC’s approval, not a house could be built or business set up in the state, it used to be said. “Now, the syndicate rules the roost,” says a Calcutta businessman who did not wish to be named.

“New industrialists are reluctant to invest in West Bengal not because of the ‘Left legacy’, by which they mean trade union pressures, strikes, etc, but due to other factors, first of which is threats and harassment by TMC goons,” says economic and political commentator Sumanta Banerjee. “They extort money from industrialists at every step.” From buying land to giving contracts for constructing the factory and hiring workers, almost everything needs their approval or is done at their behest.

In this way, for all its talk about ‘poriborton’, the farther Bengal gets from its past, the more it is confined by it. This is most apparent on the issue of land. The government claims to be holding one lakh acres in a ‘land bank’, which industrialists can bid for and dev­elop piecemeal. Nobody knows how well connected this land bank is in terms of labour, resources or transportation.

Bengal has the highest proportion of hou­se­holds that own plots smaller than one-tenth of an acre. It also has the smallest pro­portion of holdings that are larger than one acre. With holdings so fragmented (the­refore, more people to deal with per acre of land), it won’t be easy to take away land from the poorest of the landowners.

In its heyday, the Left milked ‘Operation Barga’—a campaign in which names of sharecroppers were recorded to help protect them from eviction by landowners—to build its support base in the villages, but that effort petered out after the templ­ate-altering 1980s. No wonder land looms large on the agenda of Bengal’s parties, and more so as agricultural growth yo-yos between low and negative. “On land issues,” says Left Front chairman Biman Basu, “we have already declared that we are very sensitive. We are to be very cautious in future on this issue and look at it in a self-critical way.”

It is in this fractured terrain that industry expects land for factories, offices and residential towers. Mamata’s regime is haunted by the anti-displacement struggles of Sin­gur and Nandigram—the factor behind TMC’s 2011 win and the Left’s loss. “The land bank is just a political slogan,” says Abhijit Guha, who teaches anthropology at Vidyasagar University and assisted the UPA in framing the land acquisition law. “If it exists, why will the government give land only to industry and not those who lose land to industry? Implausible idea, nobody has seen anything kept in this bank.”

The state has made initial gains in IT and IT services, but there is confusion on crucial matters, with flip-flops in policy and practice. This became apparent when IT bellwether Infosys demanded SEZ status for its proposed Rs 75 crore project in 2015. The CM is opposed to SEZs as a policy, but she offered SEZ-like benefits to Infosys. This, though IT and big industry are seen as inadequate to tackle joblessness in Bengal. The unemployment rate in 2014 was 3.2 compared to 2.3 for India (NSSO).

“Mamata and her advisors have no clue on the state’s economy. Bombast can’t be a substitute for a hard look at reality,” says Sum­anta Banerjee, echoing what’s inc­reasingly being said about the state of business in West Bengal. And it isn’t just the economy. The Trinamool has also drawn flak for bringing in an ordinance stopping government offic­ials from forming unions. “Whatever the TMC said while in opposition, it has been doing the opposite since it took power,” says rights activ­IST Sujato Bhadra. “There would be no development without res­pect for demo­cratic rig­hts.” In Bengal, ‘poriborton’ could turn out to be a case of thi­ngs staying quite the same.