Chasing large greenfield investments in manufacturing is unlikely to yield significant gains during these Corona times.
Having decisively won the mandate for a consecutive third term in power, it would be good if the Mamata Banerjee-led government in West Bengal could, this time around, accord top priority to the development of a vibrant start-up ecosystem in the state.
The process should be kick-started through an early announcement of an updated Start-Up Policy (the state’s existing policy for start-ups expires this year) that contains more ambitious goals and defined timelines for achieving these targets, and, also, places the Chief Minister at the helm of the institutional mechanism that would govern the implementation of the new policy.
With abundant availability of quality human talent, good telecommunications and internet connectivity, and an increasingly aspiring population willing to try out new things and spend more to improve their quality of life, Bengal already possesses many of the pre-requisites for becoming a favoured destination of start-ups, be they e-commerce outfits or entities engaged in health-tech, fin-tech, or ed-tech. The Chief Minister leading the mission to make Bengal a premier location for promising start-ups could further increase the state’s appeal in the eyes of Private Equity (PE) firms/venture capital funds/angel investors that typically fund start-ups, and, consequently, have a big say in the site being chosen by a start-up as its base.
Well-planned efforts directed at making Bengal a hub for unicorns (privately held start-ups valued at over $1 billion) could help the state re-emerge as an economic giant within India, and, also, prevent a large-scale exodus of its young people to other parts of the country in search of well-paying jobs. Start-ups, wherever they have flourished, have had an immense multiplier effect on the local economy and created an enormous number of direct and indirect employment opportunities. It may be relevant to mention at this point that although their pace of job creation has slowed since the outbreak of Covid-19, start-ups continue to be one of the biggest job generators nationwide.
Expending a significant chunk of the government’s energies chasing greenfield investments by the private sector in the manufacturing domain is unlikely to yield any concrete results now due to the continuing uncertainty caused by the Covid crisis when belt-tightening and conservation of resources have become the mantra at most corporate groups.
Moreover, there is no guarantee that a substantial proportion of Bengal’s rural population who are now batting for industrialization would not be singing a completely different tune if some among them were later to be asked to give up their farmlands for factories that would generate the jobs which they seek. Land acquisition for industrial use has always been a prickly issue in many parts of the country, and more so in Bengal, and this situation is unlikely to change in a hurry.
For far too long, Bengal has been considered the graveyard of entrepreneurship. By championing the cause of start-ups helmed by young, bright entrepreneurs, Mamata Banerjee has before her a golden opportunity to change this perception once and for all and take Bengal to new heights of economic growth and development. One would hope, for the sake of the state, that she would not give this chance a pass.
[The author is Advisor at the Gurgaon-based advisory on communications and stakeholder advocacy R M Consulting. Twitter: @sumalimoitra. Views expressed are personal, and do not necessarily reflect those of Outlook Magazine.]